URC HOSPITALITY NEWS November 15 TO December 15, 2013 PREPARED BY The Research Department
KUWAITIS URGED TO TAKE HOSPITALITY JOBS Kuwaitis shy away from taking hospitality jobs because many have negative impressions about them. But according to Ramy Haykal, General Manager Crowne Plaza Kuwait, it's about time for Kuwaitis to accept such jobs and present their country to the world. "Hotels are the first stop of a foreigner when visiting a country. So the face of Kuwait is already interpreted as they check in in the hotels," Haikal pointed out. "It's always a pleasure to see locals at the front desk or serving their visitors. But in Kuwait, there are no Kuwaiti job-takers. They don't want to work in hotels, but if they did, it will help promote the country and will generate more people- to-people contacts," Haykal said during the launch of ' IHG Careers Job Fair 2013' organized by International Hotels Group ( IHG ) at Crowne Plaza Hotel yesterday. IHG is the largest hotel company in the world and also the largest hotel operator in Kuwait with four properties, Haykal said at a press conference yesterday. Kuwaitis do not want to work in the service sectors such as hotels and restaurants not because they don't like the job or there are no vacancies, but because they are seen by some as low-income jobs, he said. "They should see this job as a service to the country; it's not just about serving coffee - it's more than that. The challenge is in education - we need to change the impression about these jobs. There is nothing wrong about hotel jobs - they are very important and respectable jobs. KUWAIT DOMESTIC TOURISM 'ONLY WAY OUT' Domestic tourism is becoming fruitful in many countries worldwide, especially in time of distress", said the general manager of Leaders Group Company for Consultancy and Development, Nabila Al- Anjeri, pointing out that many regional countries had started adapting such policies, especially in view of the political crises in many of their nationals' touristic destinations. "They tend to hold more domestic recreational activities and festivities to make up for the losses in foreign tourism", she added. In the company's monthly report, Al- Anjeri added that Kuwait attracts no foreign tourists, the concerned authorities should give more care to activating domestic tourism and follow Saudi Arabia's footsteps, for instance. "In view of the political situations in both Syria and Egypt, this can be the best option", she stressed noting that instead of spending millions abroad, citizens should be encouraged to do this at home especially when knowing that travel costs for a five-day journey are over KD 100 million of which 55 per cent are spent in the form of airfare and hotel charges. The report also showed that according to official records, 292,000 passengers left Kuwait during Eid Al-Adha vacation including 121,000 travelling by planes. The report also reminisced the 1970s when the information ministry's undersecretary for tourism, Saleh Shehab organized special recreational programs for both citizens and expatriates, an effort that formed the base of domestic tourism when so many international band and artists were invited to perform in Kuwait. "That was followed by founding the Touristic Enterprises Co. that has over 17 facilities all over Kuwait", she added. "Unfortunately, the most recent TEC facility, Khairan Resort, was launched in 1987. 2
DUBAI HOTELS SHRUG OFF OCCUPANCY DIP TO HOLD GROWTH PATH Dubai hotels posted a 2 per cent decline in occupancy to 83.4 per cent in October, according to a HotStats survey by TRI Hospitality Consulting Middle East. However, occupancy for the month exceeded the rate posted last October by 3.5 per cent, the survey showed. Meanwhile, average room rates (ARR) a benchmark for performance for the same period were up 9.4 per cent to $396.87 (Dh1,457), increasing revenue per available room (RevPAR) by 6.8 per cent to $330.80. In addition, gross operating profit per available room (GOPPAR) rose 7.6 per cent to $280.70 the highest of the five markets surveyed in the Middle East and North Africa (Mena). OMAN TOURISM EARNS $1BN A recent report issued by the United Nations World Tourism Organisation (UNWTO) has shown that the Sultanate's revenues from international tourism exceeded $1 billion during the year 2012 for the first time in its history which indicates that the efforts to promote tourism has been successful. The report which was launched during the 34th World Travel Market which concluded in London recently also showed that at a time when the Middle East tourism powerhouses suffered a setback due to political turmoil the Sultanate recorded RO 1.09 billion earnings from tourism becoming the 4th largest tourism market in the GCC accounting for 2.3 per cent of international tourism in the Middle East. SYRIA WAR TAKING TOLL ON LEBANON HOTEL INDUSTRY situation in Syria remains the same, the hotel industry will be in real danger because many hotels witnessed a sharp drop in -owner of the Phoenicia Intercontinental Hotel Marwan Salha told The Daily Star in an interview. Beirut was 52 percent in the first nine months of 2013, down from 58 percent in the same period last year, far below a rate of 62.5 percent in 16 Arab markets. The occupancy rate at Beirut hotels was the third lowest in the region in the covered period, and the fifth lowest in the first nine months of 2012. Tourism, mainly catering to visitors from the Gulf, has also been hit as travel warnings over abduction threats and a wave of demonstrations kept Arab tourists away last year. The United Arab Emirates and Kuwait issued similar advice again this year. 3
JORDAN'S TOURISM REVENUE TO DOUBLE THIS YEAR EXPERT Tourism expert has predicted that Jordan's revenue from the tourism sector in 2013 will more than double, compared to the previous year. President of the Jordan Hotel Association (JHA) Michel Nazzal said that global tourism growth had impacted Jordan with the number of foreign tourists soaring from 469 million in 2012 to 494 million this year. He said in a lecture at the University of Jordan's Faculty of Business that the Jordanian economy's future would depend on the tourism sector due to the downward trend in the industrial sector as a result of soaring energy and electricity costs and the agricultural sector retreating due to water shortage. Nazzal said Jordan is home to 28 historic sites with a diverse tourism product in a small area, noting that the Kingdom had registered four sites as UNESCO world heritage sites: Petra, Wadi Rum, Umm al Rassas and Amra Palace. He said the tourism sector employed an estimated direct workforce of 42,000 besides an indirect 120,000 job opportunities while income from tourism accounted for almost 17 per cent of the balance of payments current account. JORDAN TOURISM SECTOR TO GENERATE 30,000 JOBS OVER NEXT TWO YEARS The tourism sector is expected to generate 30,000 direct and indirect job opportunities over the next two years, according to an industry insider. Hotelier Michael Nazzal said the tourism sector currently provides around 42,000 direct and 120,000 indirect jobs. "The sector also contributes to the Central Bank of Jordan's foreign exchange reserves," the former senator added, noting that Jordanians account for 97 per cent of the workforce. In a discussion session on "Tourism in Jordan -- between prosperity and lost opportunities" at the University of Jordan, Nazzal said high accommodation costs in the Kingdom's hotels are due to high operational costs. The electricity bill for one room at a Dead Sea hotel, whether empty or occupied, stands at JD40 per night, according to the hotelier, who encouraged students to use social media to promote the Kingdom's archaeological sites among their non-jordanian friends. "The Kingdom has around 28,000 archaeological sites documented on megajordan.org," he noted, adding that the number of visitors to the country decreased by 2 million between 2010 and 2012. TOURISM SECTOR IN OMAN POISED TO GROW BY 8% The Sultanate's tourism industry is poised for an annual growth rate of 6 to 8 per cent until 2017, according to experts who gathered at the regional briefing on Oman, organised by the Arabian Hotel Investment Conference. Filippo Sona, director and head of Hotels in Mena for Colliers International, citing a study published by his company titled 'Oman, Muscat: Economy Hotel - Market Gap', says Oman continues to develop as a tourist destination by investing in large scale projects -- primarily in Muscat -- which contribute to building the 'Oman Brand'. "The majority of economy hotels in Oman are either locally branded or unbranded, many of which are not purpose built and of a limited size. Due to the fragmented nature of the market, hotel apartments and guest houses tend to compete with the economy hotel market, as there is a lack of differentiation between the two products from a consumer standpoint," Sona said. However, the announced forthcoming supply of hotels across Oman only consist of 4-star and 5-star properties which, according to Sona, will only serve to further widen the existing gap in the market for branded economy hotels. Based on the Colliers Econometric Model for the period 2013-2017, the Muscat market could potentially absorb an additional 985 economy hotel rooms over and above forthcoming supply. 4
SAUDI ARABIA TO SPEND $9BN DEVELOPING BEACH FOR TOURISTS Saudi Arabia will spend SR34bn ($9bn) developing a beach on its east coast into a tourism destination, the Saudi Commission for Tourism and Antiquities (SCTA) has said. SCTA vice president Hamad Alsimaeel said the Al Uqair Development Company had attracted SR17bn worth of investments to develop the beach, while general investment in the Al Uqair area was expected to reach SR34bn, Arab News reported. Tourists would begin flocking to the area, near the The project will create 37,700 direct jobs and a further 56,000 indirect and seasonal jobs, Alsimaeel said. CONSTRUCTION PIPELINE MIDDLE EAST AND AFRICA Among the countries in the region, the United Arab Emirates reported the largest number of rooms under construction with 18,057 rooms. STR Global The Middle East/Africa hotel development pipeline comprises 490 hotels totalling 118,820 rooms, according to the November 2013 STR Global Construction Pipeline Report. The total active pipeline data includes projects in the In Construction, Final Planning and Planning stages but does not include projects in the Pre-Planning stage. Among the countries in the region, the United Arab Emirates reported the largest number of rooms under construction with 18,057 rooms. Six other countries reported more than 2,000 rooms under construction: Saudi Arabia (16,666 rooms); Qatar (4,944 rooms); Egypt (3,144 rooms); Jordan (2,931 rooms); Morocco (2,287 rooms); and Algeria (2,071 rooms). OCCUPANCY IN THE MIDDLE EAST AND AFRICA REGION FALLS 3.4% TO 63.1% OCTOBER 2013 The region reported a 3.5-percent decrease in occupancy to 63.1 percent, a 5.9-percent increase in average daily rate to US$191.44 and a 2.1-percent increase in revenue per available room to US$120.88. STR Global The Middle East/Africa region reported mixed performance results during October 2013 when reported in U.S. dollars, according to data compiled by STR Global. The region reported a 3.5-percent decrease in occupancy to 63.1 percent, a 5.9-percent increase in average daily rate to US$191.44 and a 2.1-percent increase in revenue per available room to US$120.88. Highlights among the region's key markets for October 2013 include (year-over-year comparisons, all currency in U.S. dollars): Beirut, Lebanon, reported the largest occupancy increase, rising 17.6 percent to 45.3 percent. Abu Dhabi, United Arab Emirates, followed with a 15.8-percent increase to 76.7 percent.cairo, Egypt, fell 46.6 percent in occupancy to 28.0 percent, posting the largest decrease in that metric.abu Dhabi rose 10.7 percent in ADR to US$172.77, reporting the largest increase in that metric.cairo (-11.6 percent to US$100.23) ended the month with the largest ADR decrease.three markets achieved RevPAR increases of more than 10 percent: Abu Dhabi (+28.2 percent to US$132.46); Beirut (+17.3 percent to US$72.17); and Muscat, Oman (+11.5 percent to US$173.66).Cairo fell 52.8 percent in RevPAR to US$28.06, posting the largest decrease in that metric. Abu Dhabi Witnesses Strong Hotel Performance Due to High-profile Events Hotels in Abu Dhabi registered substantial growth in revenues and profits during the month of October 2013, according to the latest HotStats survey by TRI Hospitality Consulting Middle East. Abu Dhabi hotels witnessed a boost to key performance metrics in the wake of the Eid Al Adha holidays and the city hosting a number of internationally renowned events. Occupancy levels in Abu Dhabi went up by 8.4 percentage points to 79.6% and Average Room Rate (ARR) increased by 16.8% to US$182.37 during the month, boosting Revenue Per Available Room (RevPAR) by 30.6% to US$145.13. The growth in the top line performance caused a surge in profit levels during the month as the Gross Operating Profit Per Available Room (GOPPAR) reached US$117.43, up by 47.3% compared to the same period in 2012. 5
SOURCES Kuwaitis urged to take hospitality jobs, Kuwait Times, web, December 3, 2013 Kuwait Domestic tourism 'only way out', Kuwait Times, web, December 3, 2013 Dubai hotels shrug off occupancy dip to hold growth path, Gulf News, web, December 3, 2013 Oman Tourism earns $1bn Oman Daily Observer, web, November 29, 2013 Syria war taking toll on Lebanon hotel industry,the Daily Star, web, November 29, 2013 Jordan's tourism revenue to double this year expert, Jordan News Agency Petra, web, November 26, 2013 Jordan Tourism sector to generate 30,000 jobs over next two years, Jordan Times, web, November 27, 2013 Tourism sector in Oman poised to grow by 8%, Times of Oman, web, November 20, 2013 Saudi Arabia to spend $9bn developing beach for tourists, Arabian Business, web, December 9, 2013 Construction Pipeline Middle East And Africa, Hotel News Resource, web, December 13, 2013 Occupancy in the Middle East And Africa Region Falls 3.4% to 63.1% October 2013, Hotel News Resource, web, November 27, 2013 Abu Dhabi Witnesses Strong Hotel Performance Due to High-profile Events, Hotel News Resource, web, December 3, 2013 6
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