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45980 24 Nov 2022

Hospitality Experts on Hospitality Development and Revenue Outlook 2023 Focusing on Sustainability and Human Capital

Hospitality leaders in Dubai come together for Hozpitality Group’s 13th Annual CEO / GM conference at Sheraton Jumeirah Beach Resort.

On November 23, 2022, Hozpitality Group held its 13th Annual CEO/GM/HR/Revenue conference supported by Sheraton Jumeirah Beach Resort, Mollyplex, HAMA, and UAERG with over 100 influential hospitality leaders in attendance. The objective was to create a unified platform for the hospitality sector. This event was a component of Hozpitality Group's regional initiatives, which are dedicated efforts to give back to the community. The audience gathered some excellent insights from key personnel of renowned international hotel companies. 

Raj Bhatt, Founder, and CEO of Hozpitality Group started the event with some welcoming remarks. Raj has dedicated his life to uniting the hospitality community, even during the toughest days for the sector. 

The insightful presentation, Hospitality Business Outlook 2023, focused on the development and new projects in the area post-Covid, was witnessed by a packed house of attendees. The CEO panel included Sandeep Walia, COO ME at Marriott International, Patrick Antaki, COO, Hospitality Management Holdings HMH, Olivier Harnisch, Senior Strategy Advisor, Ministry of Tourism of Saudi Arabia, Christopher Hewett, Sr. VP. & Head of Hospitality, Al Hamra, Ras Al Khaimah, and was moderated by Naim Maadad, Founder & CEO, Gates Hospitality. 

Globally, hospitality has been majorly impacted by the Pandemic leading to the economic crisis and political unrest. The companies are doing their best to manoeuvre and surmount these challenges. In light of the high cost of air travel, one of the significant changes in consumer behaviour is lengthier stays in opulent settings on a single trip compared to the number of journeys made in the past, which is now driving up the Average Daily Rate of hotels. 

People prefer to spend more money to enjoy a quality of life. Hence staycation visits to the resorts have increased. Many ended their long-term leases and adapted to luxury service apartments with amenities for a better lifestyle. 

Sandeep Walia, COO of Marriott International, mentioned, "Marriott portfolio in the Middle East is growing exponentially, and we're optimistic about the future in the region." Marriott currently has over 100 hotels in the pipeline in the Middle East. The Middle East region has seen immense development and incredible growth in the hospitality sector compared to the world post-Covid. 

The operators are encouraging and promoting developments/projects to potential investors after the past two years of crisis with the big picture as the hospitality industry is forward-looking and adaptive to market trends. An investment in the hospitality industry is a long-term investment receptive to changing economic trends. Even during the biggest challenge the world recently faced, the hotels immediately pivoted and changed their models, leveraging the development and attractions in the country. 

Christopher Hewett, Sr. VP. & Head of Hospitality, Al Hamra, Ras Al Khaimah, stated, "We're focusing on experiential tourism and working with the Tourism Board to create recession-proof sustainable developments in Ras Al Khaimah."

The organizations and tourism boards are working together to restore traveler confidence and trust in the face of global supply chain challenges and labor shortages post-pandemic. Companies are focusing on the right talent and being flexible in hiring freelance, part-time workers. 

With inflation impacting the sector's development, organizations are agile in their approach by reducing their carbon footprints and food waste management and cutting down on single-use plastics.  

The HR panel, which included Robert Mikaelian, VP, HR - JA Resorts & Hotels, Gurleen Bhalla, Multi Property DHR, Marriott Hotels, Philip Jones, VP- Ops, Gulf (Premium Brands), Accor ME, Ahmed Lasheen, Regional Director of HR, Hilton, Stefan Geyser, Group Director- People & Culture, Minor Hotels- MEA was moderated by Jeff Strachan, Director, Dubai College of Tourism. The top discussion featured the work models reset post-Pandemic. The profile of the typical hotel workforce now versus 2019 considering permanent, contract labor, limited-hour contracts, interns, freelancers (bar staff), wedding staff (buyout labor), and outsourced services (valet parking). 

The leaders in the HR panel highlighted the importance of digitalization in the training and recruitment process to accommodate changes to the workforce. Compared to the past, most training is now conducted digitally. Even the hiring process entails distinct tiers of digital screening to determine the experience and abilities of candidates. The HR leaders claim the procedure has facilitated organizations in acquiring the top talent on the market. 

However, despite the industry's clamor for workers, many recruitment processes appear to be intended to turn away applicants.

With covid, when the experienced staff has moved to other industries in quest of a better career, it takes time to find and retain the right talent. However, HR officials in the UAE claim that they can easily fill positions. However, the sector needs more trained professionals prepared to accept the salary.

Gen X and the new millennials should be encouraged to see what it's like to work in the hospitality sector. Nonetheless, they ought to be mindful that every senior executive, including the general manager, starts at the bottom and climbs the ladder by accumulating years of expertise and hard labor in the field. 

Hotels are also attempting to outsource some of their departments to reduce costs. HR is inter-training staff for some plug-and-play.

The hospitality companies in the UAE are also considering hiring temporary interns, hourly workers, and freelancers. 

The Revenue panel discussed the Revenue and distribution outlook in 2023. The panel included, Karim Abdelhamid, VP-Ops, The First Group, Mohamed Al Sayaad, Regional Director of Revenue at Rixos Hotels, Daniele Carrai, VP, Total Revenue Management at Atlantis Resorts, Shwetank Singh, GM, Golden Sands Co. LLC, Bassem Salam, Group Director of Revenue Management & Distribution, JA Resorts & Hotels and was moderated by Alexander Suski, CEO, Terra Sol Hospitality Services. 

The major question was if the companies should be careful about oversupply. While the supply in the country is increasing significantly, the recent events forced better rates, and hotels were able to position themselves gradually in a mature market. 

The location, the United Arab Emirates, has a lot to offer, beaches, luxury, culture, etc. Following the Pandemic, guest behavior has changed. Today's visitors want to participate in the hotel's efforts to lower its energy and carbon footprints. 

The F&B revenue has increased exponentially compared to 2019, adding a massive amount to the hotel revenues. With events like the World Expo and FIFA, restaurants are doing really well. Most of the hotels have their own F&B establishments or have franchises. However, the Rooms revenue has surpassed the F&B in 2022 vs. 2018/2019. 

The owners and operators are sticking with the STATIC model instead of going DYNAMIC in 2022 for the leisure/ wholesale business mix market. 

The static model gives hotels the power to adjust the rates according to the shifting marketing trends resulting in more profits. However, the hybrid version is possible in the future. 

China, one of the system's largest markets, withdrew during COVID but is anticipated to re-enter the UAE market in 2023. While no major events are scheduled for the UAE in 2023, hotels anticipate a return of business travel at a similar pre-covid pace. The hotels can also expect leisure travelers and large groups to return because Etihad just announced cutting the prices of their flights to specific locations. The hospitality industry in the UAE is prepared to handle any situation. 

*Prepared by Vandana Raj, MD, Hozpitality Group