E A HQ October 2015 | Edition 04
Welcome Message by Rupprecht Queitsch CEO, Senior Partner - INHOCO One of the best approaches I have used in my career is Stephen Covey’s “7 Habits”. While these have been around for years, they still apply today, and probably tomorrow. Another of Covey’s ‘lessons’ identified that “Most people do not listen with the intent to understand, they listen with the intent to reply”.
Welcome to the fourth edition of the EAHQ. Firstly let me say congratulations on having chosen hospitality as your favourite profession! Plenty of opportunities await you and enjoy the journey! In this article I would like to share a few “lessons learned” while being a leader within the hospitality arena – the behaviours best learned through everyday, interpersonal relations. It is likely that you will be part of the majority joining the hospitality field, because you “like people and you like travel”. A word of caution here – test yourselves on just how much you “like people”, as you will not only deal with people “you like”, but need to be of service to people you “enjoy less”! In today’s global environment, you will come across situations dealing with diverse guests, bosses, and colleagues, testing your skills in leadership, human relations, and communication. Personally I enjoyed this the most – turning opportunities into winwin solutions makes our business so different and exciting.
Angela Anthonisz, Editor Conrad Sokolnicki, Research Associate
Another point to remember is the difference between being a manager, or a leader. By nature, some are better in one, or another, and develop as they progress, always distinguishing that “a manager knows how to do the job right, a leader knows how to do the right job”! Great Managers get to the person; poor managers get to the job, forgetting about the person. Great Managers recognize team members and guests, with a good example being that “most people come to a fine restaurant hungrier for recognition than food”. Please research more on what people look for in their leaders, and the top ten gripes no one appreciates. Remember – “knowledge is power”! Finally, a key priority should always be to surround yourselves with top, diverse talent and to have the Right People, in the Right Place. There are people “who make things happen”, “who watch things happen”, and those who say “what happened” – try to be in the first category! Finally, remember that “we are what we repeatedly do, excellence then is not an act, but a habit”!
In this Edition WELCOME MESSAGE BY RUPPRECHT QUEITSCH
FOOD TOURISM - A NEW NICHE FOR DUBAI?
ECONOMIC OUTLOOK
IN FOCUS: UK INTERNATIONAL ARRIVALS TOP 1 MILLION IN 2015
MEGA PROJECTS IN THE UAE
REALIZE THE VALUE OF EMPLOYEE EMPOWERMENT
Be aware that “success is never final”, and keep things simple as complexity is your enemy. As Richard Branson once said, “any fool can make something complicated, but it is hard to make something simple”. If you think you are “too small” to make a difference, you have never spent time in a room with a mosquito. It is important to be ready to listen, appreciate, be emphatic, and ready to learn every hour of every day – so enjoy!
October 2015 | Edition 4
Food Tourism – A New Niche for Dubai? In a recent edition of the EAHQ we reported on the phenomenal growth of F & B provision across Dubai. This growth provides a significant opportunity in terms of attracting the increasing numbers of ‘Gastro Tourists’ who are in search of new and unusual dining experiences as a core element of their vacations. A recent report from UNTWO identified that this type of tourism has yet to be fully explored as a new niche in the market but in light of the fact that most tourists spend over a third of their travel budget on food, it is definitely worth investigating. For Dubai, with its reputation for luxury hotels and numerous five star restaurants, including an increasing number owned by celebrity and Michelin starred chefs this provides an ideal opportunity to provide holiday packages that combine a range of dining options with aspects such as culinary classes and wine tasting in some of the best hotels in the world. Even when ‘Gastro Tourism’ isn’t the focus of the holiday, there are an increasing number of tourists who determine their vacation choice based on availability of authentic cuisines, premium dining experiences and attendance at food festivals, all of which are on the rise here in Dubai. As the hotel industry continues to fragment and we move away from the traditional sun, sea, sand and shopping as a central focus for the destination the potential to develop ‘gastro tourism’ options may be worth considering!
Economic Outlook In the previous editions of EAHQ in 2015 we reported on the economic outlook for the hotel industry in the UAE as being rather depressed in comparison to the impressive growth of 2014. This was in part attributed to the loss of the Russian market and the increase in hotel room availability as new properties opened across the country. This downturn across key indicators has impacted on the hotel industry in several of the Emirates with Dubai being particularly hard hit in terms of ADR and RevPAR figures. However, as we head into the fourth quarter the latest STR report indicates that the UAE as a whole is up marginally on the same period in 2014 and still leads the rest of the Middle East by some way with average occupancy at 74% across the year to date. Increasing room supply in Dubai continues to contribute to the downward trend in ADR and Rev PAR despite increased room sales. For Dubai there was a 5.2 % increase in rooms sold year to date but increasing room availability has also grown, creating a fall in ADR (-6.9%) and RevPAR (-7.9%). Growth in Abu Dhabi and Ras Al Khaimah continues to be positive across the year as demand continues to outstrip supply.
Angela Anthonisz, Editor Conrad Sokolnicki, Research Associate
October 2015 | Edition 4
In Focus: UK international arrivals top 1 million in 2015
Mega Projects in the UAE
Travellers from Europe have dominated the global tourism industry for many years and Dubai has always been a popular destination for those travellers looking for sun, sea, sand and shopping. However, one European country has always tended to dominate in terms of international arrivals – the UK. A gradual increase in UK visitors has often been facilitated by VFR but in recent years the growth in arrivals has increased by approximately 10% a year thanks to initiatives such as the Dubai Summer Surprises programme, the on-going development of the destination and increasing numbers of UK business travellers.
Here is this edition’s update on the latest UAE mega projects planned and already under contruction.
Statistics released by Dubai’s Department of Tourism and Commerce Marketing (DTCM) have revealed that the Emirate welcomed 687,000 UK hotel guests in 2012, and a further 759,000 UK hotel guests in 2013. In 2014, Dubai welcomed 845,000 UK hotel guests and in 2015 the UK moved into second place as a key source market for Dubai, with visitor numbers moving past the 1 million mark. While Dubai is technically classed as a long haul destination for the UK market, and one that may be outside of the price bracket for the cost sensitive British consumer the increasing presence of Emirates airlines at secondary hubs such as Birmingham, Newcastle and Glasgow coupled with recent growth in mid-market hotel options has broadened the appeal of travelling to Dubai for business and leisure. Looking forward, this may contribute to an on-going rise in numbers with the DTCM also announcing that it is expecting the steady influx to continue in 2016 should current growth rates persist.
- The AED 3 billion Jewel of the Creek is well on its way to its scheduled completion date of Q3 2017. Located on the Deira side shores of the Dubai Creek between Al Maktoum bride and the Floating Bridge, the project is being developed by Dubai International Real Estate and contracted to Habtoor Leighton Group. When complete, the area will house a combination of five hotels and serviced apartments, a ballroom, marina, and several foot bridges. - Dubai continues to break records with one of its more recent megaproject announcements: Meydan One, the multi-use destination that will go beyond all expectations. Once complete the development will boast the tallest residential tower in the world at 771 meters and the longest indoor ski hill in the world at 1.2km. Additionally, the colossal project will have the world’s highest 360° observation deck at 655 meters, the world’s largest fountain at 420 meters long and a mall with 540,000 square meters of retail space. Expected to accommodate over 78,000 residents who can also enjoy amenities such as a 9km boardwalk, bicycle trails, and a 300 meter beach. - Overlooking the shores of JBR are the unmistakable support pillars for yet another iconic project growing in Dubai. As part of Meraas Holdings’ USD 1.6 billion manmade Bluewaters Islands development, the world’s largest ferris wheel, the Dubai Eye, is taking shape. At 210 meters high, the enormous project will overtake the existing record holding High Roller in Las Vegas and will be equipped with 48 luxury capsules able to accommodate 1,400 visitors at a time who will enjoy views of Dubai’s iconic landmarks such as The Palm Jumeira, Burj Khalifa, and Burj Al Arab. - The Dubai culture scene continues to grow with the 2,000-seat Dubai Opera House, set in the centre of The Opera District in Downtown Dubai. Once open in 2016, the multi-format theatre will be able to host operas, theatre performances, concerts, ballets, art exhibitions, and orchestras as well as screenings of films, sports events, and seasonal programs. In addition, The Opera District will house a modern art museum, hotels, studios and galleries.
Angela Anthonisz, Editor Conrad Sokolnicki, Research Associate
October 2015 | Edition 4
Realizing the Value of Employee Empowerment Empowerment of front-line staff seems to be a trending “buzz word” in hospitality these days in hotels increase their efforts to improve service. PwC suggests that the concept of empowerment is of particular importance to the ever growing millennial workforce. As discussed in an article from our inaugural issue, millennials add up to around 2.6 billion people in the world today, and so as the baby boomers continue to leave the workforce, the young tech savvy, educated, and “self-promoting” millennials swoop in to take their places. Euromonitor emphasizes that in the workplace, this generation cannot be ignored and so the demand for being empowered on the job needs to be addressed. Studies have shown that employee empowerment in the service industry improves staff morale, satisfaction, and engagement as well as improving performance, increasing customer satisfaction and fostering a competitive advantage in the marketplace. Unfortunately, in hospitality, empowering front-line staff can pose significant challenges for both management and owners. Interactions between guests and front-line staff that require complex decisions to satisfy and improve service often involve monetary compensation. A manager with experience can be delegated the authority to waive a charge or provide a complementary amenity, but understandably senior management would be hesitant to bestow the same authority to a less experienced front-line member of staff. This reality is supported by a recent study from The Emirates Academy of Hospitality Management (EAHM) on empowerment in concierge departments in 5 star hotels in Dubai, which revealed that most hotel brands in the city significantly empower their staff to make decisions without requesting permission from a manger. However, companies tend to draw the line at empowering staff in relation to financial rebates or allowances (save for one company which allows staff to work with USD 2,000 to meet the demands of a guest).
Alternatively, the involvement can be emphasized and have a greater impact on colleagues by taking suggestions from staff on making decisions during formal meetings or through suggestion boxes. Furthermore, the study also emphasizes that this method of empowerment brings about significant positive impacts on employee feelings and attitudes. As such, not only is the method a safer option, it also seems to be much more effective. Conversely, the study also identified that while employees had negative attitudes towards disempowerment (i.e. not being given freedom to make decisions) and highlighted that service delivery suffers when staff are disempowered, it was revealed that staff also see situations where they cannot make decisions as learning opportunities that can help their career growth. It was also discussed that needing to consult a manager to make a decision acts as a safety net for front-line staff; a reality that they expressed positive sentiments towards. Empowerment is indeed a hot topic in hospitality these days, in particular with the growing millennial workforce. It can be a very beneficial technique for management to improve service although poses certain challenges primarily to do with maintaining bottom-line performance. The study from EAHM offers potential effective solutions to overcome the challenges management face with empowerment through involving staff more in the process of making managerial decisions for the department. It also suggests that placing restrictions on how much power front-line staff have may not always be a bad thing to do, and can in fact bring about positive results. When it comes to empowerment, management must work carefully to strike a balance between allocating power to font-line staff and ensuring that bottomline targets are met.
Although the study suggests that management should figure out ways to give front-line staff the freedom to work with financial compensation, it also highlighted another form of empowerment that can be used to reap the benefits: namely involvement with departmental management decisions. The process of consulting staff on management decisions allows for a less risky avenue for empowering staff and can be carried out through informal discussions with front-line staff while on the job. Angela Anthonisz, Editor Conrad Sokolnicki, Research Associate
October 2015 | Edition 4