Dubai welcomed over five million international visitors in 2020 and 1.26 million visitors in the first quarter of 2021, according to Issam Kazim, CEO of Dubai Tourism. According to preliminary STR data for April, Dubai’s hotel industry reported its highest room rates in three months during the month, with average occupancy at 59.7 per cent, average daily rate (ADR) standing at Dhs576.33 and revenue per available room (RevPAR) reaching Dhs343.94.
“Hotels in the UAE were the world’s second busiest after China in 2020 due to government efforts to contain the spread of the Covid-19 virus and encouraging domestic tourism, with several measures implemented to accelerate the sector’s recovery,” says Hutchinson.
“The UAE is preparing to further drive tourism efforts this year as a result of the safety protocols in place for the arrival of international tourists, alongside major events lined up for 2021. Aside from the initial set back, the tourism sector started opening up by the last quarter of 2020, with proactive measures and protocols in place to tackle the Covid-19 pandemic and ensure business continuity.”
Rotana currently operates 68 hotels in 24 cities across 14 countries, including 10,012 keys across 36 hotels in the UAE. The group’s pipeline consists of 40 upcoming projects including 10 that are slated for delivery in the next three years adding over 3,000 keys to the market. “We will continue to strengthen our footprint in the UAE to meet the predicted growing demand for hotel rooms in the upscale segment in 2021. Our upcoming properties will help meet the pent-up demand anticipated during and beyond Expo 2020 this year and will help ramp up overall room capacity, which is crucial in achieving the city’s ambitious tourism vision,” adds Hutchinson.
CLIMBING NEW PEAKS
One of the major announcements at ATM this year came from the emirate of Ras Al Khaimah, with the Ras Al Khaimah Tourism Development Authority (RAKTDA) revealing ambitious plans to develop over 20 sustainable tourism development initiatives across the emirate with an investment of Dhs500m, in partnership with RAK Hospitality Holding and RAK Chamber of Commerce and Industry.
Adventure tourism is a core segment for the emirate, with some of the new attractions planned set to include a paragliding experience from the top of Jebel Jais, hot air balloon rides, the GCC’s first ‘Highlander’ hiking experience (in November), and a new bicycle pump track. The emirate is also planning to open an eco-based pop-up hotel concept, a mountain lodge,
a mega-beachfront development and a flying arch, among others.
While tourism in Ras Al Khaimah dropped by almost 28 per cent in 2020, the emirate achieved the “highest RevPAR and ADR among all other markets in the UAE”, according to Raki Phillips, CEO of RAKTDA. “Our focus last year was on the domestic market given the restrictions in international travel; however, as borders begin to open up, we look forward to welcoming both domestic and international visitors to our emirate. With new flight routes between Ras Al Khaimah and Russia, Kazakhstan and Czech Republic, we are well positioned to welcome guests from these new destinations, as well as those from other key feeder markets,” he explains.
The emirate aims to attract 2.9 million visitors per year by 2025 and tourism is central to its economic diversification strategy. “While it is still too early to say when we will see pre-pandemic levels of visitation, we remain optimistic towards the tourism industry’s ability to navigate he dynamic situation posed by the pandemic,” he adds.
TAKING TO THE SKIES
Circling back to one of the elements that reminded me of past ATMs, the new premium economy seats at Dubai airline Emirates’ stands had a steady supply of eager guests waiting to try them out. The only difference this time around was that the seats were sanitised after every use and the queue of people maintained their distance.
“With premium economy, the focus was more to do with many passengers on economy who want more legroom but can’t afford business class. It works well for anything beyond six hours until 17 hours – that’s when you get the full comfort and the benefit from the product,” explains Adnan Kazim, chief commercial officer at Emirates. “It gives you the separation, the comfort and the spacing that a passenger requires and [we believe that] demand will be there. We are quite confident that once we launch – hopefully officially next year – things will be in good shape by then.”
According to the most recent report from the International Air Travel Association (IATA), Middle Eastern airlines’ passenger demand fell 81.6 per cent in March compared to March 2019, although it was up over February. Capacity fell 67.2 per cent and load factor declined 32.3 percentage points to 41.3 per cent in March. However, Emirates, which is currently operating to almost 120 destinations, is looking to increase capacity and its network as more countries reopen their borders. “The focus for us will be to bring the network back gradually to the level that we used to do – 143 destinations in the past – and to also bring the capacity back,” says Kazim.
Emirates is currently at roughly 30-35 per cent of capacity mainly since it has stopped operating flights to the Indian subcontinent, South Africa and Nigeria, among others. “Today we are quite limited in capacity deployment, but the capacity ramp-up will happen in phases as we see more opening of borders across the world. As we progress towards summer, we do see that things will shape up gradually with the vaccination drive increasing in many places in the world. We’re seeing a lot of traction happening between the US and UK. Many European destinations are also opening up already and want tourists to come in – like Greece. There is an indication that many other European gateways will open up in the future,” he states.
“With all these things happening, we’re quite optimistic that by summer we should gradually open up. That should ramp up our capacity hopefully to between 40 per cent to 50 per cent by summer and then gradually to 70 per cent by winter. All of this is subject to easing up of the protocols by many countries.”
What all industry insiders agree upon is the need for a universal ‘vaccination passport’ type of document, which will support the industry to reopen in a safer environment and boost confidence among travellers. One example is the IATA Travel Pass, a mobile app to help passengers manage their travel in line with any government requirements for Covid-19 testing or vaccine information. Airlines across the world have joined the initiative, with Emirates, Etihad Airways, Qatar Airways and Gulf Air among the regional carriers participating in the trials currently underway. The trials aim to help enable travellers to manage Covid-19 related documentation digitally and safely throughout the travel experience.
“As countries are opening up their borders for vaccinated travellers, digital passports are the logical next step to reinstate cross-border travels. This travel passport will help to streamline the verification process at the airport or border and allow passengers to verify, store and share with the authorities all test and vaccination certificates,” explains Rotana’s Hutchinson.
“During the pandemic, consumers have moved significantly toward online channels for most of their day-to-day transactions, and digitally-enabled travel is the way forward. These digital adaptations will empower passengers to take control of their journey while simultaneously creating a seamless experience. The future of travel depends on the development of these technologies, which support the response to today’s crisis and lay the foundation for the growing industry of tomorrow.”
Adds RAKTDA’s Phillips: “We fully support the industry in its mission to develop unified solutions to support recovery as we co-create a viable tourism vision for ‘new normal’ and post pandemic travel – especially tools that give both the traveller and destination renewed confidence.”
WELCOMING THE WORLD
The one strong message that ATM echoed is that the travel and tourism industry is now headed towards its recovery phase, with most players optimistic about the year ahead.
“Some have asked how the global tourism industry can appeal to tourists once again. Personally, I think people are so frustrated after the past 12 months that once they get the vaccine, they will want to resume travelling,” states Murtaza Hashwani, deputy chairman and CEO of hospitality provider Hashoo Group. “To assuage any fears, airlines will need to have messaging stating that all staff are vaccinated, while strongly promoting the destinations that are low-risk due to an efficient vaccination programme. As always in a crisis, innovation will be key. And as always, the UAE is ahead of the rest. It does look like things are headed in the right direction.”
One major event that is bolstering confidence in the UAE is the upcoming mega event Expo 2020 Dubai, which opens its doors on October 1, 2021. The six-month long event, being hosted for the first time in the Middle East, Africa and South Asia (MEASA) region, is hoping to welcome millions of visitors during its six-month run.
“With Expo 2020 scheduled for October 2021, and the UAE’s 50th year celebrations, the industry will witness a rebound and hotel performance metrics are expected to return to much healthier levels both in terms of rate and occupancy before the close of the year, which will drive tourism growth in 2022 as well. The upcoming events are expected to boost tourism, which will have a positive impact on other sectors too, including retail and real estate activity. This is possible thanks to the thorough Covid-19 immunisation programme implemented in the UAE, which creates a safe environment for residents and tourists alike,” states Hutchinson.
Looking to the future, the pandemic has also changed traveller behaviour and expectations significantly, which in turn is forcing industry operators to adapt and change.
According to Hashwani, companies need to prepare for future global events – such as another pandemic. “No one was ready for the events that unfolded in March last year – and so I think we have all learned to expect the unexpected. God-willing there isn’t another pandemic any time soon, but businesses need to massively up their crisis preparedness.
“Diversification – branching out into other product categories, industries, or marketplaces – is essential. While this strategy does present some risks for a company, diversification is a safety net against downturns or calamities – like Covid-19 – or a way to grow your business,” he explains.
One of the biggest priorities for the hospitality industry will be to ensure health and safety without compromising the guest experience. For this, technology will be the key factor in making guest experiences more seamless, says Hutchinson.
“The pandemic has fundamentally affected consumer behaviour and the response to these changes and evolving needs is paramount to the ongoing recovery of our industry. New habits and expectations have surfaced, spending patterns have changed and the embracing of digital and technology has accelerated to new heights. In the current situation, customers truly care about innovative features that deliver new types of incentives, such as more personalised, experiential-based loyalty programmes.
“Flexibility is another important aspect. Guests are looking for hotels to be flexible with check-in and check-out times, updated cancellation policies, free cancellations against local and international restrictions, and flexible upgrades that allow guests to have a better room from which to work and to have more space,” he states.
Organisations need to embrace new technology, concurs Hashwani. “The world is changing fast thanks to the rapid advancements in new technology. Companies who signed up early for the next generation of tech – from fintech to e-commerce – have a big advantage when life throws a corporate curveball. Adapt or be irrelevant, it is that simple.”
From the looks of it, the regional travel and tourism industry is adapting, with the doors wide open.