Industry Update
Opinion Article28 September 2020

The Hospitality Industry’s Perspective on the New Normal

By Omar Issa, Director of Strategy at Dur Hospitality

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Mr. Omar Issa will be speaking on this topic on day two of the 16th edition of the Arabian Hotel Investment Conference (AHIC), taking place in a brand new format with live onsite and virtual sessions over three days from 29 September – 1 October. The session will look at how owners are coping with the current reality, how they prepare for the future, and how they plan to navigate the new levels of ADR and RevPAR. Panelists will also discuss how do they see their relationship with operators evolving and how owners are structuring their businesses to cope with the current environment.

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Disruption has been a substantial theme of 2020 as COVID-19 imposed itself on businesses, operations, and lifestyles everywhere across the globe. It is not an exaggeration to state that the novel coronavirus has created a novel reality where entities and individuals must swiftly adapt in order to survive and thrive.

The hospitality industry in particular was faced with its worst recession in decades. Hotels and lodging facilities remained empty or operated at minimum capacity for months during the global lockdown. However, the Kingdom of Saudi Arabia was quick to react in supporting affected sectors through strong investments and incentives, in addition to launching the $4 billion USD Tourism Development Fund under the umbrella of the Ministry of Tourism, that aims to support and facilitate investment activities in the sector to establish targeted destinations within KSA, as part of the ambition of becoming a top global tourism destination by 2030. The Kingdom’s government also sought opportunities in the local tourism realm and organized innovative schemes such as the “Saudi Summer” initiative which generated $1.6 billion USD in its first seven weeks, an increase of 26% in tourism spending compared to the same period for last year.

Moreover, COVID-19 did not slow down the planned progress outlined in Vision 2030, as the Kingdom continued construction on mega projects including the 75-billion Diriyah Gate which will encompass 30 hotels, and the Red Sea Project and its 14 luxury hotels. Global hotel chains are eyeing this progress, and are keen on investing in them to reap their massive potential set to materialize over the next chapter.

The Kingdom’s astute leadership remains diligently committed to Vision 2030, with expectations for substantial growth in both regional and domestic corporate demand as Saudi Arabia leads recovery in the region through meticulous efforts to revive tourism and its supporting sectors. Hotel markets in key cities including Riyadh and Jeddah are forecasted to stabilize in 2024 at slightly higher levels than those achieved in 2019. Additionally, religious tourism markets unique to Saudi Arabia will act as key drivers in boosting the Saudi hospitality sector as early as the last quarter of 2020.

Fueled by a deep faith in our leadership and a commitment to support the quest towards Vision 2030, Dur Hospitality embraced an optimistic attitude from the onset of the pandemic, briskly designing a renewed business model and strategy, and utilizing the down time to upgrade offerings, in particular hygiene and sanitation strategies in cooperation with leading specialized global consultancies. Through the innovative ‘Safe Stay’ program, Dur strived to incorporate best international hygiene practices that augment its overall service standards, and trained its teams to follow rigorous safety and hygiene practices throughout various operational and service functions.

We are fortunate to be operating in one the world’s most ambitious nations and the stronghold of economic development in MENA. As we delve into a future of recovery and growth, we embrace a renewed mindset and a determination to transform tomorrow. As the saying goes, what doesn’t kill you makes you stronger, and we are emerging from this crisis stronger and more persevered.

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AHIC 2020

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Broadcasting live from pop-up studios across hotels in Dubai — Dubai, United Arab Emirates
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Omar Issa

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