The UAE will continue to lead the GCC’s luxury hospitality segment to 2022, with 73 percent of existing luxury hotel stock and 61 percent of the region’s current luxury pipeline located in the country, according to data released ahead of Arabian Travel Market 2018, taking place at Dubai World Trade Centre from April 22-25.
The research demonstrates that luxury properties have increased three-fold in the GCC in just 10 years, with 95 percent of these properties operated by international management brands.
Despite taking the lead position, the UAE will face strong competition from Saudi Arabia, which is expected to witness the most significant increase in luxury hotel supply to 2022, with a Compound Annual Growth Rate (CAGR) of 18 percent from 2018 onwards. Across the rest of the GCC, this figure stands at 10% in the UAE, 11 percent in Oman and Kuwait, and nine percent in Bahrain.
Historically, Saudi Arabia dominates CAGR trends, with luxury property development from 2013 – 2017 accounting for 11 percent of the Kingdom’s growth in supply, compared to eight percent in the UAE, seven percent in Kuwait, six percent in Oman and five percent in Bahrain.
In 2017, the UAE topped the table, with 35 percent of the year’s pipeline made up of luxury projects; most concentrated in Dubai. This compares to 14 percent of projects in Saudi Arabia, 20 percent in Kuwait, 19 percent in Bahrain and 11 percent in Oman.
Today, highlights of the GCC’s luxury hotel stock of 69,396 rooms include St. Regis; Palazzo Versace; Bulgari; Armani and Raffles. With such prominence, it is hardly surprising that luxury is a key sector represented at ATM 2018, with luxury hospitality for junior travellers being explored during the ATM Global Stage session – hosted by DOTWN.
Luxury spending in the region’s two largest source markets, China and India, is also on the rise, driven by the tandem increase in High Net Worth Individuals (HNWIs). And the GCC is home to 410,000 HNWIs, with 54,000 in Saudi Arabia and 48,000 in the UAE, so there will be no lack of visitors interested in these luxury brands at ATM this year.
According to the research, compiled by Allied Market Research and published by Colliers International, there are six opportunities for further development in the GCC’s luxury segment. These include the introduction of more boutique hotels of 80 keys or fewer, offering privacy and exclusivity; luxury resorts to cater to the high demand for wedding and honeymoon destinations; iconic properties in prime locations; and nature and heritage concepts such as eco-lodges and glamping. High quality wellness and spa properties and luxury cruises also feature on the list.
The global luxury market – including travel – is set to increase at a Compound Annual Growth Rate (CAGR) of 6.5 percent to 2022, reaching values of USD 1.2 billion.Add to Favorites