growing 74. 8% year over year and reaching $26. 3 billion in revenue
DUBAI: Alpen Capital’s most recent hotel sector report for GCC projects indicates that the industry will return to pre-pandemic levels in 2022, recording a year-on-year expansion of 74. 8% and achieving a profit of $26. 3 billion. It adds that the industry is expected to grow with a compound annual expansion rate (CAGR) of 6. 6% through 2026.
UAE-based investment banking consultancy Alpen Capital presented its latest GCC Hotel Industry Report on Wednesday, August 3, presenting detailed studies and forecasts on the hotel sector, analyzing trends, expansion drivers and demanding situations facing this dynamic segment. It also describes some of the renowned hotel companies in the region.
The report was presented at a webinar followed by a panel discussion with Sanjay Bhatia, CEO of Alpen Capital; Hala Matar Choufany, President – Middle East, Africa and South Asia, HVS Yahia Idris, Director, Nova International. Sameena Ahmad, CEO of Alpen Capital, moderated the discussion.
Factors such as increased tourist arrivals, mega-occasions such as EXPO 2020 Dubai and the upcoming FIFA World Cup 2022 and the relaxation of visa regulations will lead to the expansion of the industry. Regional governments will actively support the progress of shopping, recreational and entertainment centers. Through significant investments, the GCC is a hub of action with a long list of events in the works.
The pandemic has accelerated the adoption of generation and digitalization for operators looking to optimize procedures and the overall point of the visitor experience. Demand for mid-range hotels, serviced apartments and Airbnb is also on the rise as it provides flexibility and affordability. “said Sameena Ahmad, Managing Director of Alpen Capital (ME) Limited.
“The recovery of business activity with the reopening of economies after the pandemic has led to new M&A activities in the region. GCC has witnessed several cross-border transactions as corporations focus on strengthening their geographic presence while expanding and diversifying their service offerings. Going forward, consolidation in the hospitality sector is expected to intensify as pressure mounts on corporations to generate profits and gain market share in the face of festival expansion and the developing risk of online portals and accommodation service providers of choice. “says Sanjay Bhatia, Managing Director, Alpen Capital (ME) Ltd.
According to Alpen Capital, GCC hotel industry revenues are expected to grow at a rate of 6. 6% CAGR between 2022 and 2026 to reach USD 34 billion. The methods followed by regional governments, economic recovery, the accumulation of tourist arrivals as well as the cutting-edge responses proposed by operators are the main drivers of the expansion of the industry.
Revenue expansion in the hotel sector in the GCC countries is expected to range from a CAGR of 2. 9% to 8. 0% between 2022 and 2026. The GCC’s largest markets, Saudi Arabia and the United Arab Emirates, are expected to delight in CAGRA of 8. 0%. and 5. 5 per cent, respectively. Kuwait, Oman and Bahrain are expected to grow as much as 7. 1 percent, 6. 3 percent and 2. 9 percent, respectively. While expansion in Qatar is expected to normalize after the completion of the 2022 FIFA World Cup with a CAGR of 4. 3%. between 2023 and 2026.
After steady significant construction this year, the constant parameters of the hotel industry are expected to grow in the future. The average daily rate is expected to rise from $145 this year to $151 in 2026, while earnings consistent with available space are expected to increase from $83 to $93, representing an annualized expansion rate of 1. 1% and 2. 9%, respectively.
Business confidence in the region is recovering faster as borders reopen and travel restrictions ease. GCC is becoming a global medium for business, entertainment and sporting events, and is expected to host major events such as the 2022 FIFA World Cup, Formula 1 Grand Prix, World Swimming ChampionshipsArray Geneva International Motor Show, Qatar, Asian Games, etc. Array improvement in line with the source of per capita income will increase demand from internal customers, which will continue to stimulate the tourism sector. GCC countries are also modernizing their shipping ecosystem, from expanding airport capacity to adopting Hyconsistent withloop-based shipping and a new rail corridor. They actively invest in the progression of tourism-related infrastructure while selling recreational destinations. Saudi Arabia, in particular, has undertaken several socio-economic reforms to make the Kingdom more modern, liberal and friendly to business and tourism to increase its attractiveness to foreign tourists.
However, the report also notes that global inflation, sharp changes in oil costs and profits pose threats to the industry. The peak inflation rate is very likely to have an effect on consumers’ purchasing power, while travel can also be affected by asymmetric vaccination. rates and new strains of COVID-19.
The Covid-19 outbreak has forced the region’s hotel sector to diversify its offering to remain competitive and applicable to attract visitors, and the industry has responded with innovation and dynamic new business styles. Notable trends come with the arrival of medium-sized brands. and serviced apartments, with digitalization helping operators optimize workflows, reduce prices and visitor experience. Airbnb’s style has also begun to gain traction in the GCC, according to Alpen’s report. Religious tourism continues to play a vital role and the expansion in the number of pilgrims has forced Saudi Arabia to provide a wide diversity of hospitality services. Other states are adopting different styles of engagement between heritage and devout spheres to attract tourism. In the future, the GCC hotel industry is expected to emerge stronger from the crisis, ahead of its peers.
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About Alpen Capital:
Alpen Capital (ME) Limited is incorporated as a limited liability company in the Dubai International Financial Centre, Dubai, United Arab Emirates and is licensed through the Dubai Financial Services Authority. Alpen Capital offers a full range of investment banking advisory in the M&A, debt, equity and capital markets spaces to some of the largest advertising conglomerates and monetary establishments in the GCC and South Asia. In addition to the United Arab Emirates, it has offices in Qatar, Oman and India.
About Alpen Asset Advisors:
Alpen Asset Advisors Limited, is an independent wealth control firm that provides personal banking and asset control services. It provides a comprehensive feature that covers all asset classes, investment topics and styles, and sectors. Through our open architecture platform, we identify investment opportunities and design an investment. program for the creation of wealth within the given threat appetite.
For media inquiries, please contact: Sameena Ahmad, Corporate Affairs Email: sameena. ahmad@alpencapital. com Alpen Capital (ME) Ltd www. alpencapital. com Rasheed Palliyalil Watermelon Communications Dubai, United Arab Emirates rasheed@watermelonme. com
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