GlobalHotelNetwork.com: Where do you see the best opportunities for hotel investment or development?
Christopher Lund: The GCC markets have seen an increase in development over the past few years due to government mandate for long-term economic diversification which has been the basis for the hotel sector expansion plans. Hotel owners and operators should expect to benefit from various projects in the GCC that the respective governments are backing to attract more travelers.Furthermore, the more relaxed visa access as well as the growth of the religious and leisure market are expected to drive the demand for international travel in the region. KSA in particular has seen a 4% increase in inbound tourism and is expected to experience a further increase of 4% by the end of the year. The steady rate of growth of inbound tourism is projected to continue for the next decade up until 2030.
The hospitality industry in the GCC has seen incremental growth in the past decade. This is projected to continue, which leads to the demand for unique lodging experiences in GCC markets such as Oman and the Kingdom of Saudi Arabia (KSA). Hospitality supplies in KSA and Oman are expected to increase by 42% and 74% respectively. As rapid development in the hospitality markets in the GCC continues,
Colliers International has highlighted three market opportunities for unique development options in cities, coastal and rural areas in the GCC. Colliers International expects there is a market for Lifestyle Hotels in the GCC as it offers a unique experience that is not apparent in the current hospitality supply located in city-centers in the GCC. Lifestyle hotels can be popular in densely populated cities such as Dubai, Riyadh, Muscat, Kuwait and Manama.
As Lifestyle hotels offer a unique opportunity for development in cities, Mid-Market resorts offer a similar opportunity for further developments in coastal locations. The mid-market resort segment is a largely untapped development opportunity in the GCC, as there is limited current and forthcoming supply for mid-market resorts in the region. The mid-market resort aims to take advantage of the growing number of price sensitive travelers in the GCC. Colliers International expects these resorts to perform well in markets such as Northern Emirates (UAE) and Bahrain.
The hospitality markets in the GCC have further room to grow in the form of EWAA (Eco, Wellness, Adventure and Agricultural) tourism projects. Similar to the mid-market resort segment, the EWAA tourism segment is largely untapped in the GCC. EWAA tourism projects in the GCC have grown in the past decade or so, with Oman and the UAE being the most active in this space and further developments are possible, especially is untapped rural locations in KSA such as Al Ula, Taif and Al-Ahsa.
Lifestyle hotels, Mid-Market Resorts and EWAA Hospitality projects help diversify the hospitality offerings in the region. These can offer consumers an alternative experience from what is currently offered in the market.