Clyde & Co supports International Women's Day and is committed to accelerating gender parity globally. In honour of the many exceptional women we work with every day, we have interviewed influential women from some of the most dynamic industries in the Middle East to discuss the trends, opportunities and challenges they are experiencing. In this video, our expert Alexis Waller looks at the thriving hospitality industry and the key developments to watch for.
Hospitality in the Middle East
Over the past few years, the regional hospitality market has been impacted by a variety of political and economic events that have forced companies to redesign their commercial strategies within the Middle East. However, the region still undoubtedly offers a strong pipeline for industry growth and new hotels. One of the key factors shaping the region's current market climate is the recent flurry of mergers and acquisitions by key players such as the Marriot/Starwood and the Accor/FRHI deals. The market is still waiting to see the full impact of these mergers and how they will shape the customer experience in the region.
Hotel owners, operators and brands
The first trend experts are discussing in the region is the recent changes to hotel agreements. Hotel agreements are now becoming more balanced between the owner and the operator. This is creating challenges for the legacy brands and new opportunities for smaller brands, who can often be more flexible with their contractual terms. This trend is resulting in an influx of new players in the market and legacy brands considering how they will need to adapt to compete in this changing market dynamic.
More market competition is driving hotels to consider how they can expand on guest services, which is a benefit for consumers. Initiatives to provide a wider variety of services include new activities, increased social interaction and engagement with the surrounding community – all designed to enhance the guest stay. We are also seeing an increase in hotels opening up their facilities and amenities to non-staying guests to take advantage of the large number of non-travellers living in close proximity to the hotel.
The last trend, which has been very prominent in the media recently, is the re-flagging of hotels. This is the case when the existing operator is terminated and a new brand is brought in. The new brand may be the owner's brand or new white-label brand, rather than a recognised international brand. This re-branding reflects current market conditions and is usually triggered by decreasing profit margins or revenues. The result of this trend is an increased pressure on operators when it comes to the usual review of performance and maintaining a strong relationship with owners.
Technology is the future
Like many industries, the future of the hospitality industry is technology. Innovation in this area is fast paced and traveller's expectations change every day. Tomorrow's traveller wants to be constantly connected and expects the hotel to provide a seamless mobile experience from booking, to check-in, to travel advice. Hotels are able to provide these new digital services; however, they come with high risks for brands. The biggest challenges that will come with the implementation of new technology are data protection and cyber- attacks. These two challenges can easily lead companies to inadvertently breaking the law, claims investigations and damage to reputation.