Hospitality sector pins hope on the "moment of recovery"
With tourism opening up in Dubai, hotel operators are observing an increased pick-up in the last quarter bookings and reservations from overseas guests. While the focus so far has been on the local market, this is being seen as a “moment of recovery” for the hospitality industry. Ranjit Phillipose, Area Director, Middle East and General Manager, Taj Dubai and Taj JLT, says, “So far we have seen an increased demand for staycations from across the emirates and expect this to continue through the summer. We feel the local domestic market will take precedent and shape our immediate recovery with overseas bookings adding to this, later on in the year.”
The high supply of hotels in the region does not come across as a threat to Phillipose. He says, “Each property must offer their own unique guest experience to differentiate themselves.The new normal has resulted in a lot of emphasis on innovation and hygiene as guests’ priorities have changed, so the industry will have to find a balance between creating this safe environment and distanced experience while still maintaining the high levels of standards our guests are accustomed to.”
So is innovation the way forward for the hospitality industry? Phillipose says the Taj has redefined the brand to ensure guests feel safe while still experiencing the same level of luxury. “We have implemented stringent health, safety and hygiene measures, using the latest technology across both properties. The idea is to provide a seamless guest experience grounded in warm Indian hospitality.”
Covid-19 impact on stakeholders
Ali Manzoor, Partner, Head of Hospitality and Leisure, Knight Frank Middle East explains that the COVID-19 pandemic has impacted stakeholders in the region’s hospitality sector in different ways. “Hotel developers, operators and owners have been affected. Operationally, the impact has been relatively severe. At the property level, there have been layoffs, salary reductions, reduced work weeks and other such similar measures that have left many with an uncertain future. While this has resulted in savings for hotel owners – some of which have been able to reduce payroll-related costs by over 50 per cent, this has been offset by both a steep decline in room-night demand and increased operational costs linked to heightened health and safety measures,” explains Manzoor.
From the owners’ perspective the situation is no better, he adds. “It’s not unusual to see asset values falling by 10 to 20 per cent. In turn, lenders might have been willing to be more flexible with repayments terms on existing assets, but they are hesitant to fund new hotel projects – particularly for first time developers.” The common problem now lies in securing finance, especially for first-time developers. “It is first time developers without a proven track record who are having to cancel development projects due to an inability to secure financing,” explains Manzoor.
Role of local tourism authorities
Local tourism authorities, such as the Ras Al Khaimah Tourism Development Authority, have come forward to lend guidance and a helping hand to hospitality providers in the emirate. Under the ‘Stay Safe’ Hotels Certification programme RAKDA has given hospitality providers access to global best practices, and operational guidelines.
“The current domestic focus will soon expand to include the wider GCC, Middle Eastern and international markets as travel picks up on a global scale. We are working closely with our international travel partners, to determine how best to drive international footfall to the emirate in the future, while adhering to all necessary precautionary measures. Planning of co-marketing campaigns and leisure and MICE roadshows is also underway,” says Raki Phillips, CEO of RAKTDA.
And untill the time international travel fully opens up, special offers in the domestic market will keep the demand going, feel operators. RAK is currently running its Shortcation campaign, where guests staying three nights at Ras Al Khaimah hotels, can avail two complimentary passes to attractions including those on the Jais Adventure Peak and the Suwaidi Pearl Farm.
Phillipose also says they have worked on innovative experiences such as the #TajLovesDXB package to offer guests a refreshed destination experience in the heart of Dubai pr even the Eloquent Elephant Friday Brunch. “We have also evolved our home delivery system to bring the flavours of Taj to our guests’ homes through contactless delivery as well as offering nearby residents, in Business Bay and Downtown Dubai, laundry services.”