UAE Travel Sector Forecast 2014

Andrew Robinson
Resident partner, transportation and leisure - KPMG Lower Gulf

How do you expect EXPO 2020 will contribute to enhancing Dubai’s leisure and MICE offering?
There will be a clear short term benefit during the six months of the Expo 2020; however we consider that the estimated AED 25 billion investments in infrastructure capacity will also lead to a sustained long term growth in the number of leisure and MICE visitors. With this increased capacity, Dubai will achieve its ambition of 20 million visitors by 2020.

How do you expect technology will play a key role in the travel sector in the year ahead?
Technology will continue to have a significant impact on the travel sector in the year ahead. For example in the hotel sector:
• Online bookings will continue to increase with providers enriching their websites to offer guests more facilities. Some analysts predict online hotel bookings will grow from 40% in 2012 to almost 50% by 2016.
• ‘Front of House’ operations are expected to witness an increased usage of laptops in rooms and smart phone applications enabling you to check in online and control everything from in-room facilities to the ordering of your breakfast in bed.
• In the ‘back office’, the improved use of technology in food and beverage management (planning, ordering and delivery) is making that side of the business more efficient. Data analytics is a key tool used by the industry to monitor guest preferences and model the delivery of their services accordingly.
The hotel sector needs to introduce these technological developments in a measured way since one of the key selling points in this region is the quality of service, which many residents will attribute to human interface, rather than technological prowess. For example, I would not expect the Middle East region to be a pilot for the use of in room “robots” in the near future.

What are your predictions for the hospitality sector in the UAE?
The hospitality sector in the UAE will continue to outpace the GCC and will yield double digit growth. This is consistent with Alpen Capital’s October 2012 GCC Hospitality Industry Report which predicted that the UAE’s hospitality market is likely to grow by 67% during the 5 years to 2016 when it may reach US$7.5 billion.
My rationale is that one third of the world’s population lives within three to five hours of Dubai and the Emirate continues to enjoy the reputation for being one of the safest places to live/visit. Also, as a thriving regional business hub, it sustains a constant growth of business travelers. The investment in infrastructure around the Expo 2020 site will boost Dubai’s capacity to host MICE events. In fact, we predict a growth in the MICE events before 2020 as a result of the recent news that the DWTC is investing in exhibition expansion.
On the leisure side, we are blessed with lovely sea, sun, sand and we have built shopping malls, sporting venues, golf courses and water parks. Tourists need more of these however, so it is great to see the Theme Park projects in Dubai Land taking shape and new parks signing up such as Six Flags to bring their attractions here. Continuous investment into these facilities for tourists is required to sustain a growing, but competitive tourism market into the future.

The top 3 trends that the UAE travel sector needs to look out for in 2014.
The shift in focus from business to leisure travelers will have the following three major impacts:
• More attention to the location and the requirement to have hotel facilities close to beaches, malls and sporting venues.
• Growth in the range of hotel and apartment facilities. We will see more 2, 3 and 4 star properties to cater to families and budget leisure travelers. Hotel operators will be considering introducing other brands to operate these properties to differentiate them from their high end brands.
• This will also be reflected in the expansion of budget and charter package holidays to Dubai.

Asian travelers are predicted to grow at a faster rate than European travelers to the UAE and will require facilities to be tailored to their requirements accordingly.
The new internet savvy travelers are demanding facilities to match their lifestyle with trendy/artistic facilities, built in applications and technology in their rooms, with minimum fuss.