Kippreport investigates if oil prices aren’t the only cause for the market slumpAugust 27, 2015 12:00
The off-peak year, Part II
Caught in the midst of infrastructure overdrive and global slowdown, the region’s tourism sector will be forced to find new revenue streams to survive the lean times, Part II.
August 11, 2009 7:58 by Ehtesham Shahid
Click here to read Part I.
Although tourism numbers in the Middle East are dipping, there are segments within the sector making hay despite the gloom. The food and beverage segment remains largely intact, while online travel booking is actually looking up. Tom Rowntree, the vice president commercial at InterContinental Hotels Group, argues drops in numbers can be offset by other more vibrant segments. “The MICE (Meetings, Incentives, Conventions and Exhibitions) sector continues to be strong, and if you look across the region there will continue to be a market despite global economic downturn. Moreover, we are in the market on a long term,” he says.
During an economic downturn, he suggests, there is a short term or a tactical approach and a more long-term strategy positioning. “The more tactical focus necessitates looking at promotions and campaigns to stimulate the market and activate the opportunities that exist,” says Rowntree.
The growth in online demand is a far more interesting story. Diego Lo Fuedo, the director of Hotels.com, says there has definitely been a slowdown in general, but it is different for the online segment. “In times of crisis, people tend to go digital, which is not just a faster way to communicate but also gets you a variety of offers,” he says. So if tourism is expected to grow by 4 percent to 7 percent, the online shift is growing at around 15 percent to 20 percent, depending on the geography. Lo Fuedo also rules out lack of internet penetration as a problem. “There is always a learning curve,” he says. “The internet levels increased in the West only in the last 10 years. The shift in information channel to transactional channel is only recent,” he says.
Beyond Dubai. On the ground there are different sets of realities confronting different countries. Some are far too out of the loop to really get hit by the downturn. Qatar, for instance, currently receives only 0.9 million international visitors, out of which 90 percent are for business purposes. From these figures, there is clearly a large amount of work to do to build Qatar, and Doha, as a leisure destination.