Due to the strong growth in UAE and Qatar, the Gulf Cooperation hospitality market is expected to be worth $36.7bn by 2020, says a new report
According to the GCC Hospitability Industry Report, Alpen Capital predicts that the national market would grow at a compound annual rate of 7.6% from $25.6bn last year.
The bank also predicts that occupancy rates would increase by 3% during the period to 70%. The average daily rate was also predicted to increase by 1.4% annually.
But Qatar and UAE will experience some difficulty in operating metrics within the short period.
Regardless of the minor setbacks, a rapid annual growth is of 10% is expected from both countries during the period, simply due to the 2022 FIFA World Cup and the Expo 2020.
Other GCC member countries including Bahrain are expected to have an annual growth of 6%
Alpen also predicts that the total regional room supply would grow 4% annually despite the 5.7% annual growth in tourist arrivals.
“Dubai is likely to witness an addition of nearly 57,000 rooms in hotel and serviced apartments in the five years to 2020, whereas Saudi Arabia has a pipeline of over 47,000 rooms. Addition of such massive capacity is expected to extensively scale up the region’s hospitality sector,” the bank said.
Apart from mega events like the 2022 FIFA World Cup, the bank said other key growth drivers include meetings, event and conferences market, as well several conference centers undergoing development in the region would catch the attention of international summits.
“The hospitality industry continues to present interesting opportunities to investors,” said Alpen Capital managing director Sanjay Bhatia. “We expect consolidation and M&A activity in the hospitality sector to accelerate given attractive valuations.”