How has the global economic downturn impacted the hospitality industry? What industry segments have remained the most resilient? What is the breakdown between corporate the corporate and leisure traveller?
NOBLET: We are observing a kind of transfer between countries facing turmoil to the UAE, and mainly Dubai. It is a fact that the political stability in Tunisia, Egypt, Libya, Bahrain, and to a certain extent Syria, has a direct and positive impact on hospitality in Dubai. Generally speaking, our hotels have higher occupancy rates due to the fact that there is instability in the region. So in this part of the world we are quite satisfied with occupancy rates. However, we are an international hospitality company and we are affected by what is happening in these countries because we also have properties there. Saudi Arabia has remained stable, but the winner of the game is definitely Dubai. We see a lot of activity in the hotels and the shopping malls and this is very positive for us here.
As many real estate segments have significantly corrected, how have hotel values fared and what is your outlook on investment today?
NOBLET: It is the right time to invest in Dubai as a favourite destination. There are many potential investors that are buying apartments and villas considering the political situation in the Arabic peninsula and Maghreb region. For some people this is the right time to make an investment in Dubai. As we always say, Dubai is the safest place in the world, so why not take the opportunity.
How would you describe the current level of competition among hotels in the UAE? Is the UAE, and Dubai in particular, in a state of over supply of hotel rooms?
NOBLET: It really depends on the way you look at it. Before the crisis, the state of global business was so strong that everyone was happy to have more hotel rooms. Now that things have changed, there are many saying that we have an oversupply. The way I see it is that you can always count on the fascination and the magic of Dubai. This is a top icon city in the world that offers the very best. It is a happening place; there is something new everyday. It is a top place for MICE, banking, real estate, so it is a top destination. I believe this will make Dubai more and more successful. I am glad to see the diversification we have now in terms of hotel categories. Before we only saw the deluxe five-star segment in the market. Today we have a mid-market coming and a budget segment coming, so it makes the destination even more appealing and affordable. Low cost airline companies are flying everywhere in the Gulf. In the UAE we have a good deal of low cost connectivity and we are happy to see this. At the end of the day, the market is not only rich people, the market is global. I think the offerings here are excellent. Personally, I do not consider the new hotels as a threat. All hotels contribute to the success of the destination. All hotels have the need to promote the destination in addition to themselves, so this is an opportunity.
What are your occupancy rates at present across the different properties in the UAE? How does this compare to the industry?
NOBLET: I do not know about the performance of the competition. As far as we are concerned, we have 5 hotels in Dubai and they are full. Occupancy rates range between 92% and 97% for our properties here. Considering the market, my observation is that our competitors are doing well too.
How has the economic downturn impacted pricing for room nights? Has this expanded the target market for visitors? What has happened to your ADR (Average Daily Rate) over the last 2 years?
NOBLET: Some hotels are seeing increased ADR by 10% other hotels are seeing an increase of 20% to 30%.
Before the crisis, the state of global business was so strong that everyone was happy to have more hotel rooms. Now that things have changed, there are many saying that we have an oversupply. The way I see it is that you can always count on the fascination and the magic of Dubai. This is a top icon city in the world that offers the very best.
In what ways are you working with travel agents and tourism companies? Has there been an effort among private sector player to come together and promote Dubai as a destination? Has this effort been successful?
NOBLET: ITB Berlin was very successful as a trade show. However, the booths for the Arab countries were empty. On the other hand, looking at the IT and online booking areas, they were packed. Of course, this is a snapshot indicating to us that the future is definitely related to technology. Everything now is happening online. If I take into account my organization, as we speak today, some of our hotels make 20% of their bookings, while others hit 65% of their booking online. Combined, we book a total of 35% to 40% of our rooms online. Last year, only 25% to 30% of our bookings were made online. There is definitely a boom in that respect. Therefore, we see that the travel agency golden years have come to an end. People today have the luxury of the internet and according to budget they can find the destination and where they want to stay. In other worlds, the hospitality industry is a victim of technology because the client can fix his own price to pay. However, if we are talking about MICE or any corporate business, they still have to go through dedicated organizations that understand the job and the market.