Hotel Travel Market Report Middle East 2016

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Milo Silvester Long
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1 Hotel Travel Market Report Middle East 2016

Introduction The Middle East is experiencing strong growth for both inbound and outbound travel, together with a rise in a population who are more wealthy, and educated group of professionals that

2 Introduction The Middle East is experiencing strong growth for both inbound and outbound travel, together with a rise in a population who are more wealthy, and educated group of professionals that are travelling more widely both internally and external to the market. These economic, social and political changes to a region that is developing fast with large investment in infrastructure, has significant business challenges to get and remain ahead. Travel and hotel companies have an opportunity to take advantage of the market by understanding the customer buyer profile, the purchase cycle and optimising the distribution of its product.

3 The Positive Investment in tourist resorts, new hotels and architectural triumphs is attracting travellers, especially Europeans: Middle East market showed the strongest growth with a 9% increase in the first 8 months of 2015 (figures for January August 2015)* The number of outbound trips made by Europeans increased by about 4.5% but with demand for different destinations fluctuating strongly... with some countries in southern Europe, North Africa and the Middle East suffering in particular Ongoing growth in the European market provides an ongoing base focus for growth for travel companies; the bread and butter of its business. How to Manage your hotel s distribution channels?

Youth Market With a booming youth generation, as a result of relocation and development of an international community living and working in the region, data shows that there is a significant

4 Youth Market With a booming youth generation, as a result of relocation and development of an international community living and working in the region, data shows that there is a significant proportion of the population under 25: Youth make up 60% of the population, particularly in the GCC (Gulf) countries; the main travel markets. Of these, over 50% are below the age of 25; young people who are very familiar with new technology*** Middle East outbound potential market population growth, expected to grow to 335 million in 2025 and 418 million by 2050***

Muslim market The Middle East and Turkey has also benefited from Muslim travel spend; Global Muslim spending on outbound travel reached $142 billion in 2014, excluding the hajj and umrah.

5 Muslim market The Middle East and Turkey has also benefited from Muslim travel spend; Global Muslim spending on outbound travel reached $142 billion in 2014, excluding the hajj and umrah. This represents a 6.3% increase from the previous year and 11% of the global expenditure. Muslim outbound tourism expenditure is expected to grow to $233 billion by Turkey currently ranks 7th out of 73 select countries in the Thomson Reuters report for the best-developed Islamic economy for Muslim travel^. Data from the Turkish market alone show that the numbers of tourists represent a mere 3% of the global Muslim population, but could currently represent, as much as 37% of total Muslim travel spending^^, therefore Turkey has the opportunity to be the prime destination for a long time to come.

According UNWTO figures, "international tourist arrivals grew by an estimated 4% in the first eight months of this year, consolidating the recovery that started in 2014 when numbers increased by 6%

6 According UNWTO figures, "international tourist arrivals grew by an estimated 4% in the first eight months of this year, consolidating the recovery that started in 2014 when numbers increased by 6% to 52 million. The decline in the rouble has had a major impact on spending by Russian tourists, which dropped by 52% in Q1 2015, taking Russia out of the top five spenders list for the first time in recent history. Hotels under contract in the Middle East subcontinent represents a 30.1% increase in rooms under contract compared with November 2014 and a 57% year-over-year increase in rooms under construction.

Managing the challenges Economic woes in its main source of travellers have hit the market hard and forced travel businesses to quickly find new avenues of revenue and develop new and wider market

7 Managing the challenges Economic woes in its main source of travellers have hit the market hard and forced travel businesses to quickly find new avenues of revenue and develop new and wider market bases These challenges do present the opportunity for travel businesses to think more holistically about the travel market, consider their market audience more carefully, and identify new ways to sell their products. There is a worry that accommodation supply will significantly outstrip demand, the number of rooms is growing at an exponential rate not unconnected to the number of travellers. Therefore hotels need to outsmart their competitors that will continue to bring strong profit from defined markets, while optimising the performance and efficiency of its systems.

Opportunity According to the World Travel and Tourism Council, the Economic Impact 2015 for the United Arab Emirates is showing travel and tourism growth of contribution to GDP.

8 Opportunity According to the World Travel and Tourism Council, the Economic Impact 2015 for the United Arab Emirates is showing travel and tourism growth of contribution to GDP. Travel and Tourism's Direct Contribution to GDP - Middle East overall average = $5.7 billion (2014) or 2.7% // UAE= $16.8 billion or 4.1%. GDP growth expected to be around 4.9% to direct contribution to GDP Abu Dhabi was named Destination of the Year at World Travel Market Local airports are expected to be able to handle as many as 250 million passengers by 2020, according to STR. Hilton Hotels doubled the size of its portfolio in the region between Q and Q Hotels under contract in the Middle East subcontinent represents a 30.1% increase in rooms under contract compared

9 The growing youth market, the demand from European travellers, plus affluent and professional tourists means a necessity to focus on delivering the product to the audiences touch and purchase-points. Studies are overwhelmingly showing that the mobile is beginning to take over and therefore hotels that do not have the sales and booking capabilities across multiple technologies, including mobile and across different channels will begin to suffer, and struggle to build revenue.

Reaching your market The Amadeus report on Middle East Booking shows 67 per cent of the survey respondents plan and book their travel using a mix of online travel agents or direct travel providers,

10 Reaching your market The Amadeus report on Middle East Booking shows 67 per cent of the survey respondents plan and book their travel using a mix of online travel agents or direct travel providers, via phone or the Internet (Exhibit 5). Of those booking online, more than two-thirds (69 per cent) prefer to directly use the website of the travel service providers*** Currently, most of the outbound business trips are wellplanned, with over 60 per cent making their booking more than a month prior to their travel dates. The average spend in the GCC countries for inter-regional travel is as high as USD 4,980 and for international travel, it is USD 9,920. Google study, almost 50 per cent of users in the Middle East use smartphones for travel booking purposes. Saudi Arabia tops in mobile usage for travel with 50 per cent of travellers accessing the internet via smartphones, while 35 per cent are doing so in the UAE.***

BookLogic view point Hoteliers in the Middle East have many opportunities from continued travel market growth in the region, however the rapidly growing supply of accommodation on the market could

11 BookLogic view point Hoteliers in the Middle East have many opportunities from continued travel market growth in the region, however the rapidly growing supply of accommodation on the market could cause revenue headaches. Online and digital bookings, as well as channel management flexibility needs to be Hoteliers need to move away from traditional Property Management Systems (PMS) that are purely connected to the Global Distribution System (GDS), this approach is stifling their ability to bring in real revenue. The industry needs to incorporate online distribution channels and the array of Online Travel Agents (OTAs), even the luxury and five-star market book direct, and provide a platform on their website whereby the traveller can easily confirm a reservation with a Booking Engine. We have seen some of out customers make significant gains in just a few months by implementing these simple technologies; where we can also help them save significant time.

For more information, please contact Germany Office Address : Harpener Hellweg 89, 44805 Bochum Office Phone # +49 234 95 319 319 Turkey Office Address : Turkey: Fulya mah, Mehmetcik cad.

12 For more information, please contact Germany Office Address : Harpener Hellweg 89, Bochum Office Phone # Turkey Office Address : Turkey: Fulya mah, Mehmetcik cad. No: BookLogic Plaza Mecidiyeköy İstanbul Turkey Office Phone # Dubai Office Address : 1st Floor,Jewellery and Gemplex Bldg. No. 3 Garn Al Sabkha Street, Jebel Ali 1, Dubai, United Arab Emirates. Contact #:

OIC/COMCEC-FC/33-17/D(16) TOURISM CCO BRIEF ON

OIC/COMCEC-FC/33-17/D(16) TOURISM CCO BRIEF ON TOURISM OIC/COMCEC CCO BRIEF ON TOURISM COMCEC COORDINATION OFFICE 0 May 2017 CCO BRIEF ON TOURISM Tourism industry is an important socio-economic tool for both developed and developing countries. It has