The hospitality sector in GCC countries is poised for a healthy growth owing to favourable economic conditions and infrastructure development, according to a report released by an investment bank advisor.
Alpen Capital estimates that the GCC hospitality market is anticipated to grow at an annual rate of 8.1 per cent to $28.3 billion by 2016 compared to $19.2 billion in 2011. "The GCC hospitality sector is poised for a healthy growth owing to factors such as favourable economic conditions combined with infrastructure development, increased bids to host high profile global events and government support to the private sector,- said Sameena Ahmad, managing director at Alpen Capital.
Alpen Capital report focuses on the key performance indicators of the GCC region's hospitality industry, such as number of hotel rooms, its trends, challenges and the industry's outlook over the next five years. The GCC hospitality industry has been high on the investment radar of businesses given the macroeconomic trends and the rise in business/leisure visitors to the region. The industry has strong fundamentals and is beginning to realise its potential. "Accordingly, we believe that the industry presents itself as an excellent opportunity for all stakeholders,- added Sanjay Bhatia, managing director at Alpen Capital.
Occupancy rates are expected to average around 67-“73 per cent between 2012 and 2016. As business and leisure tourism continues to grow and the up-scale hotel segment account for most of the demand for hotels, ADR is likely to average around $212-“$247 between 2012 and 2016.
"Saudi Arabia is expected to remain the largest GCC market in terms of revenues, followed by the UAE. Qatar is expected to be one of the fastest growing markets, driven by rising business tourism and leisure tourism as the country prepares itself for the FIFA World Cup 2022, and in order to achieve its 2030 national vision,- noted the report.
Key growth drivers
Driven by its macro-economic fundamentals, the GCC region performed relatively better in the current economic crisis.
Government support helped tackle the economic turbulence, and public sector spending on infrastructure has driven the region's economic growth.
In conclusion, the outlook for the hospitality sector is promising, and GCC governments and private stakeholders are committed to undertake various measures to address the current challenges.
Times of Oman