Faithful+Gould invited a number of key industry speakers from a variety of organisations in the hospitality sector, to discuss the emerging trends, opportunities and challenges facing the market in the Middle East.
Panellists included Mark Shea - Faithful+Gould director and head of hospitality, Filippo Sona - Colliers International director and head of hotels, John Podaras - Hotel Development Resources partner and Bassem Salah – ISG general manager, hotels and hospitality.
Optimism was rife in the discussions and there was agreement that there are real opportunities for growth in this sector. Shea said: “The biggest drivers now are the mega events: Expo 2020 in the UAE and the World Cup 2022 in Qatar. In terms of opportunities, the three and four star market is really going to take off.”
Podaras agreed and pointed out that government spending was also a driving factor for growth in this industry. He said: "The opportunities are real. I see them more in the willingness of governments to commit to spending: particularly in the areas of job creation. We’ve seen tremendous growth in Saudi Arabia, mostly as a result of this spending.”
Sona sees this increased government spending extend to Egypt, he pointed to the country as a rapidly growing market with great opportunity in the hospitality sector: “Egypt is growing rapidly and the potential for return on investment is great. Residential prices are more than doubling: from [US] $11,000 to $23,000 in six months.”
The discussion moved onto the design and construction of hotels, what the new trends are and how costs are being kept to a minimum despite the rise in material prices. Sallah pointed out the rise in boutique style hotels, saying that consumers are looking for more interesting and unique hotels. Sona added: “We are seeing a trend for smaller bedrooms – land is becoming more expensive so hotels are scaling down to smaller, more commercially viable solutions."
“The biggest drivers now are the mega events: Expo 2020 in the UAE and the World Cup 2022 in Qatar"
Mark Shea, Faithful+Gould Head of Hospitality - Middle East
Salah talked about how modular designs are being used as a cost saver. “Modular design is commonly used in construction now and works particularly well in the mid-market range where costs need to be kept to a minimum.” Outsourcing was another tactic that was discussed.
Sona stressed costs can also be kept to a minimum if the right project managers are engaged from the beginning. All panellists were in agreement that planning is fundamental to designing, building and operating a successful hotel. Shea added “for the mid-market range it is about having realistic expectations from the outset and considering the full project lifecycle when making cost decisions.”
Other areas of discussion were the impacts of religious tourism, the need for refurbishment (10,000 rooms in the UAE alone by 2020) and how the reputation of the brand must be maintained during that refurbishment period.
Mark Shea will be speaking further on the mid-market opportunities at the Arabian Hotel Investment Conference (AHIC) on 6th May.