UAE-based independent hotel management company Aleph Hospitality has identified five key trends expected to impact the development and performance of the Middle East and African hospitality industry in 2020 and beyond.
According to the company’s founder and managing director, Bani Haddad, the trends to watch include: the impact of new tourist visas on travel to Saudi Arabia; interest in alternative management models from hotel owners prioritising profitability; a much-needed focus on the implementation of smart technology in the guest experience; a move towards less wastage; and investment opportunity in Africa.
Haddad explains each trend in detail here:
1.Saudi Arabia to be the ‘star’ of 2020
“The positive impact of the new visa regulations in Saudi Arabia, which now allow for tourist visas online or on arrival, will continue in 2020. The opening up of access to the Kingdom has stimulated interest in visiting the country from leisure travellers both in the GCC and beyond; it’s the place everyone wants to explore. For the hospitality industry, this will give a boost to investors eyeing the market as well as cause hotel operators to reconsider their business models for the Kingdom, perhaps diversifying their product to attract the new tourist demographic.”
2. Focus on profitability
“We will continue to see more stress on expenses as hotel owners demand higher profitability from their assets. Driving revenue is not enough; operators will need to demonstrate clear control over costs and a strategy that focuses on protecting the bottom line. Investors are increasingly looking for better returns and as such, they will become more open to looking at alternative management models, from white-label to franchising. I expect we will see more franchise agreements in 2020 and in that regard, the Gulf hotel market is maturing. With four hotels operating under independent management contracts and six more openings next year, we are looking forward to sharing our proof of concept with investors.”
3. Smart solutions
“Keeping up to date with technology remains a major challenge for the hospitality industry. Use of digital technology is now part and parcel of a seamless guest experience, but hoteliers are not moving fast enough to ensure the journey is as smooth and personalised as it could be. Typically, hotels follow the travel industry when it comes to the adoption of new technology. With regional airports and airlines now trialling the use of facial recognition technology to enable passport-less travel and biometric boarding, I think we will start to see some changes in 2020 when it comes to the process for hotel reservations, check-in and check-out. For travellers and hotel guests, convenience is key and ultimately, we are moving towards being able to access our hotel rooms without requiring any human contact.”
4. Waste not, want not
“The need to reduce the impact of the hospitality industry on the environment is another huge issue on boardroom agendas. Hotels in this region have a long journey ahead of them when it comes to sustainability, but I am confident we will start to see some taboos being broken. Several major chains including Marriott, Jumeirah and Hilton have announced plastic-free initiatives this year and I think this trend will snowball in 2020. It’s an area in which hotels can make a significant impact and I think we will see a dramatic reduction in the supply of single-use plastic water bottles and small amenities in luxury and budget hotels alike.”
5. Eyes on Africa
“When it comes to future growth for the hospitality and tourism industry, Africa is a continent abundant with opportunity and as a result, there is a lot of interest from GCC investors. Ethiopia is a fantastic example; its travel and tourism economy grew by 48.6% in 2018, the largest of any country in the world, and it now represents 9.4% of Ethiopia’s total economy, according to the WTTC. This is primarily driven by leisure travel and heavily weighted towards international travel, so the growth is expected to continue. The hospitality industry is a key player for communities, driving a flourishing job market and social enhancement, and we are looking forward to developing our role in this in 2020.”