Mid-market segment drivers of hospitality: Voivenel

The Hospitality Business Summit recently held in Dubai witnessed keen participation from the mid-market segment. Laurent A Voivenel, CEO, HMH – Hospitality Management Holdings was among the key speakers who highlighted his views on the ‘growing three-star market’.

Laurent highlighted the drivers of mid-market as well as spoke about challenges of competing in a cost-conscious segment. The scale of opportunity in the region for budget hotels is unprecedented. The number of visitors travelling to the region is projected to double reaching 136 million by 2020 compared to 54 m in 2008.

Laurent further added: “The region including Dubai is seeing strong economic and tourism growth owing to increasing stopover traffic, rapidly expanding low-cost carriers, growing inter-regional travel, increased airport capacity, new emerging source markets and a growing middle class that is fueling the demand for budget hotels.”

The event also highlighted in more mature hotel markets, such as the United States and Europe, mid-scale and budget accommodation comprise more than half of the market’s room stock. In Dubai, five-star hotels dominate with a market share exceeding 60% and about a 50% of pipeline supply leaving a huge gap and opportunity for budget hotels that we are keen to penetrate with ECOS Hotels.

Another key trigger has been Dubai Expo 2020. 25 million people are likely to visit the Expo, of which 70% will come from outside the UAE pushing the demand for hotels. According to industry sources a little over 6000 new hotel rooms are expected to come on the Dubai market by 2015, taking the emirate’s total hotel room stock to just over 65000. It is looking to have 80,000 hotel rooms by 2020, meaning more than 15000 new hotel rooms may be built before the event. Dubai is going to have 2443 economy hotel rooms by 2017 in addition to those planned and under construction.