Forecasting the future

As 2022 draws to a close, 11 hospitality contributors unpack the past and share their predictions for the coming year. Here’s what they said...

1

NADA ALAMEDDINE

Managing partner Hodema consulting services hodema.net a_snada hodema

The role of hospitality consultants

Consultants are entrepreneurs and businesspeople who are skilled in budgeting. They can help with every consumer awareness on all things sustainable, purposeful and healthy has set new benchmarks for hospitality enterprises.

aspect of the operation and provide recommendations to help grow your business, reduce costs and resolve difficult management issues. A hospitality consultant can assist with developing or commercializing your idea into a coherent business plan that will help you obtain financing or an outside investor. They can also optimize the operation by creating policies and procedures. Domestic tourism

The pandemic led to greater interest in domestic travel and tourism. Unique experiences that give back to local communities in meaningful ways are in high demand, as are guesthouses, niche properties and wellness retreats. The new generation of traveler is seeking authentic experiences and social engagement. Furthermore, increased 2023 forecasts

While business travel will be the order of the day in 2023, it will contain a much larger leisure component. Employees are looking for more opportunities to combine business travel with recreational time. They will be traveling for “bleisure” (business and leisure).

The hospitality metaverse will evolve. Through the use of virtual reality technology, guests will be able to have a clearer sense of what to expect before they commit to booking. Some properties will even provide their guests with access to virtual spaces, allowing them to host virtual birthday celebrations or business meetings.

2

HALA MATAR CHOUFANY

President HVS Middle East, Africa and South Asia halamatarchoufany Helping clients

Our key role as specialized consultants with extensive experience in the industry is to advise and work with our clients to develop and operate financially viable and long-term sustainable hospitality schemes. Our advisory work ranges from feasibility studies when planning to build or buy a property, selecting and the impact of travelers’ preferences on how operators and developers are building and managing the guest experience. Transformation in the hotel industry is visible in the way in which hotels are being designed and built, the emergence of new brands and operating models, the adoption of sustainable solutions and differentiation in the hospitality offering.

and appointing a suitable operator, advising on operating model or exit strategy, value engineering projects and asset optimization — and everything in between. We offer a wealth of hospitality intelligence, expertise, global reach and local market understanding to help our clients achieve the best results. We are comprehensive in our solutions but targeted in our focus. Homegrown concepts

There has been strong recovery in most markets, particularly in the GCC, which has been stimulated by a number of world-class events and supported by significant public investments. The noticeable change in the hospitality arena is the growth of homegrown brands, accelerated adoption and acceptance of the shared economy Leisure tourism growth

The geo-political and economic slowdown will undoubtedly challenge the travel industry, as inflation and an increase in fuel prices continue to impact the sector unfavorably. Markets that have a large share of domestic and regional tourism will continue to register growth and enjoy stronger recovery/ stability than those that are primarily reliant on international markets. Leisure, experiential and religious tourism are likely to achieve stronger growth compared to the commercial and meetings segment. With rising costs and subdued rate increases, hotel operators will once again revisit their cost base and operational expenses in order to preserve their profitability margins. This will, in turn, result in further innovation and a redesign of the hospitality industry.

sign that the industry was recovering at a fast and promising rate. Finally, events such as Expo 2020 Dubai and the FIFA World Cup in Qatar provided a huge boost in tourism and have created thousands of jobs.

3

DANIEL DURING

Principal and managing director Thomas Klein International thomaskleingroup.com thomaskleingroup A-Z services

Our diverse and talented team members are constantly exposed to the latest and most globally relevant information, which helps enhance their comprehensive and specialized set of skills, hence enriching every single project in turn. Our original aim remains true to this day, and we are proud to be one of a few select firms to provide in-house, A-to-Z services, from conceptualization to implementation, hence adding value while saving costs every step of the way. Tourism recovery

A huge emphasis on sustainability, as well as health and well-being, have been a great hospitality trend to witness this year. The fact that the MENA was the only region to note a significant increase in hotel developments was a positive Smart tech and beyond

There will be further growth in wellness tourism, which can come in the form of adding medical or sports medicine specialists on staff or simply adding a vegan/calorie-counted menu to the different F&B venues depending on each property’s budget. I also anticipate greater investment in smart technology — AI, IoT and similar — to help with automation and personalization. Finally, large-scale events will be back, due to the removal of most Covid-19 restrictions worldwide.

4

BANI HADDAD

Founder and managing director Aleph Hospitality alephhospitality.com alephhospitality Client support

As the leading independent hotel management company in the Middle East and Africa, we work with and for owners to ensure that their hotels perform as well as possible. Our hotel management model allows hotel owners to have more control over the management of their assets, clearer operational visibility and better flexibility with contractual terms while still being able to franchise their hotel with an international brand — all designed to drive high returns on their investments. Essentially, we are able to assist owners at any stage of the hotel development cycle, from site selection and design to construction, re-opening and successful operations. On the rise

For Aleph Hospitality, 2022 has been a remarkably strong year, and we’ve reached some notable milestones in entering no less than six new markets: Qatar, Uganda, Rwanda, Ghana, Saudi Arabia and the Democratic Republic of the Congo. Our portfolio of hotels has

management. We provide hassle-free solutions for those who do not have the time or experience to open or operate restaurants.

Moreover, with our understanding of the local market and international trends, we are able not only to develop exceptional concept ideas, but also make sure that these ideas are financially feasible and sustainable in the long run. Flexibility is key

As travel and tourism is rebounding globally, especially in the leisure sector, hotel owners will be more conscious of fluctuations in occupancy rates and costs. I believe that flexibility is paramount to protecting assets and that the ability to adapt quickly will be key to financial growth for investors and brands. I predict a continued interest in the benefits of independent hotel management, particularly in conversion projects.

5

NATALYA LATYPOVA

Managing director Glee Hospitality gleehospitality.com latypova.natalie Hassle-free solutions

Our clients receive combined F&B expertise in the field of operations, accounting, human resources, F&B strategy development and project grown to 13 properties, with about 15 hotels in various stages of development in our pipeline. We are on track to reach our goal of 50 hotels in the Middle East and Africa by 2026. To support our rapid growth, we have doubled the number of our corporate team members in Dubai, and we will be opening an Aleph office in Saudi Arabia before the end of 2022.

The UAE: a strong performer

I believe that the biggest events for the restaurant industry in 2022 were the debut of the Middle East & North Africa’s 50 Best Restaurants and Dubai’s Michelin Guide. It has been a long wait for everyone working in F&B in the UAE. I am so glad to see homegrown concepts and local chefs receiving recognition in the listings. Sustainability on the menu

In 2023, I’m looking forward to the expansion of the Michelin Guide in Abu Dhabi and the fact that we will undoubtedly see a higher number of local concepts. As for F&B trends, I believe that sustainability is here to stay, and it will be further integrated into restaurant concepts and operations. By this, I mean not only the sourcing of local produce, farm-to-table concepts, fair trade and a tracible supply chain but also proper waste management systems, reducing disposables and single-use plastics.

6

NAIM MAADAD

Chief executive and founder Gates Hospitality gateshospitality.com Naim.Maadad

Experience matters

With a diversified portfolio of international brands, homegrown food and beverage concepts, and operating hospitality assets throughout the world, we are proven operators in the industry and have a global perspective, including what’s happening here in the Middle East. What’s also important is that we are not just consultants; we also have our own business and brands, such as Reform and Bistro D’ Arts, so we are able to offer advice based on firsthand experience. By knowing what works, and more importantly what doesn’t, we are able to guide our clients. We are critical thinkers who are frank and direct, with hospitality in our hearts.

Bleisure tourism

I think the speed at which the industry has bounced back is the biggest highlight of all. The pandemic has forced us to re-evaluate the way we live and work, and the industry has done well to adapt, whether it’s ensuring restaurants and hotel lobbies have the facilities for mobile working or developing packages for “bleisure” visitors who now have more flexibility to work from wherever they like. But it’s not all work. Many people are quite rightly placing more importance on “self-care” and are looking for experiences that allow them to switch off. This could be in the form of a resort that focuses on well-being, such as Six Senses Zighy Bay, or venues that promote mindfulness, be it by choice of décor or even daily yoga classes. This year, the industry has focused on how they play a huge role in making people “feel good,” something that I hope will continue in 2023.

Dubai in demand

I think the most important thing is that we enter 2023 with more certainty than we did 2022. Free of restrictions and with the number of tourists visiting reaching pre-pandemic levels, Dubai is thriving, and the hospitality industry is very much at the heart of that.

With a younger demographic coming through Dubai, the industry will need to continue to adapt to the demand for experiences rather than standard dining or hotel stays. With new attractions opening all the time, there’s a move away from a traditional “sit by the pool for two weeks” or a dining experience that only focuses on the culinary aspect. Businesses that succeed in 2023 will be the ones that offer experiences that are exclusive, tailor-made and truly are out of the ordinary.

7

NAGI MORKOS

Founder and managing partner Hodema consulting services hodema.net nagimorkos hodema Added value

Hospitality consultancy brings added value to the table, providing the client with a global and regional overview, as well as a professional vision of F&B and hospitality benchmarks. It offers risk assessment for investors in the hospitality world. Finally, the consultancy accompanies the brand in quality control and the franchising process by ensuring systematization of its operations. The coffee shop trend

There are several trends that started before Covid-19 and have continued after the pandemic. One example is the coffee shop trend. We have noticed that in the GCC, specialty coffee shops, tea houses and coffee lounges have become preferred meeting and gathering points for customers of all generations. Homegrown is here to stay

As we approach 2023, we can look forward to pandemic-free living. I anticipate that local and regional cuisines, homegrown concepts and domestic tourism within KSA, the UAE and the broader Gulf region will experience further growth in the year to come.

8

RALPH NADER

CEO Amber Consulting amber-consulting.com ralphpnader Consultancy counts

We have in-depth knowledge of the hospitality industry in the MENA region. Through the countless projects we have undertaken since our launch in 2006, we have emphasized the importance of monitoring supply and demand, and its relationship with consumer behavior in the region. Our team of hospitality consulting experts is dedicated to providing our clients with the highest level of service. Our ability to consider the best interests of each and every client while maintaining their vision through a project execution in line with the ever-evolving market parameters is at the heart of our approach. Pandemic behind us

The greatest highlight of 2022 was the end of the Covid-19 crisis. Business owners like myself have learned about the consequences of an inflexible line of business in crises such as a pandemic. Our lack of preparation and adaptability to face such a challenge has forced us to rethink our clients' current business models in an attempt to transform them into a crisis-proof version, thus anticipating any major market change. Another highlight of this year is the emergence of a new trend among hotel owners. They have come to realize the major disadvantages associated with outsourcing their F&B department to third-party brands, who have found a way to profit by increasing their market visibility and brand equity while adapting to the challenges presented by the pandemic. As a result, many, if not most, international operators have decided to take a more balanced approach between opting for franchises and, at the same time, developing homegrown concepts. Hospitality venues

We believe that going forward, demand for hospitality venues will keep rising, seeing as studies in the MENA region have shown even more demand than pre-Covid-19.

9

AMR EL NADY

Head of hotels and hospitality MEA and EVP Global Hotel Desk JLL jll-mena.com jll Advisory services

At JLL hotels and hospitality group, we aim to meet the ambitions of our clients at every stage of the investment lifecycle, from acquisition to disposition. The group’s 350-strong global team, based in over 20 countries, has closed more than USD 83 billion in hotel transactions worldwide over the past five years, in addition to 7,350 advisory, valuation and asset management assignments. Our hotel valuation, brokerage, asset management and consultancy services have helped more hotel investors, owners and operators achieve high returns on their assets than any other real estate advisor in the world.

Hotel performance

Globally speaking, hotel performance continues to improve and is nearing 90 percent RevPAR recovery from 2019 (pre-pandemic levels). The Americas, Middle East, Africa and European markets are leading the way, with green shoots expected to occur in Asia Pacific in Q4 2022, when Covid-19 restrictions are further lifted.

From an investment perspective, hotel transactions’ volume reached approximately USD 50.4 billion, down 0.5 percent from 2021. More investment activity is expected in the near term due to a significant volume of debt set to mature over the next 24 months, with current headwinds around record cost of debt affecting equity hurdles. While the debt market is still present, the lending community is showing a more thorough selection process around the borrower and investment profile. Debt and lending

I expect 2023 to be marked by further turbulence around lending capacity, which is likely to affect transaction volume and result in construction delays over the short and medium term. More branding consolidation activity is anticipated, in line with a growing trend of sustainability-focused operational changes for medium- to long-term savings on costs. Redefining the hotel experience

Tackling the corporate segment as well, it is likely that we will notice a redefinition of the hotel experience involving much of the aesthetical and technological attributes of the living/coliving sectors.

10

PHILIP WOOLLER

Senior director for the Middle East and Africa STR str.com philipwooller

Real-time data

The main driver of the business is the strength and depth of the hospitality data that we collect. More than 75,000 hotels worldwide provide their performance data to STR; in turn, we provide premium benchmarking, analytics and insights from across the globe. It is a vital lifeline for the entire hotel and travel industry – real-time data and analytics that allow our clients to manage their businesses effectively and strategically. Dubai: the benchmark

One of the greatest highlights of 2022 has been the success of Dubai. It all began with Dubai Expo in October 2021, a global event that was visited by millions. It was organized in an extraordinary way, and there was enormous demand in the emirate for hotels, restaurants and other hospitalityrelated services. Indeed, occupancy rates were as strong as they have ever been, and ADR went into overdrive. This upward trend continued throughout 2022, culminating in Dubai being recognized as the most successful city in terms of hotel performance over the past few years. Recessions on the horizon?

We’ve known for a while that economic headwinds presented significant downside risks to our industry and the world’s wider macroeconomic recovery. We expect the pace of demand recovery to slow over Q4 2022 and Q1 2023. We released downgraded baselines for the U.S. and Eurozone, suggesting that recessions are the new baseline for 2023.

The downgrade isn’t entirely unexpected, however, since high inflation and rising interest rates, slowing global growth, the war in Ukraine and China maintaining its Covid-zero policy are all adding fuel to the fire. The good news is that the Middle East stands out as economically strong relative to the rest of the world; the not-so-good news is that the Middle East, to a large extent, needs the rest of the world to travel, and that could be challenging.

Historic events, such as Expo 2020, were a huge boost to the UAE market and Dubai in particular. The FIFA World Cup is a game changer for Qatar tourism, with significant spillover effects for tourism markets across the Gulf.

11

JAMES WRENN

Director and head of hotel advisory for MENA Colliers colliers.com Making things happen

We accelerate the success of our clients’ commercial property and help them achieve their business goals. We’re ready to put our expertise to work by offering valuation and advisory services, capital markets, project management, as well as many other value-added services. From highly complex transactions to timesensitive deals, our forward-looking real estate experts are ready to help our clients unlock the potential of their properties. Events making an impact

Interestingly, 2022 surpassed expectations, as the region bounced back from the effects of Covid-19. Tourism in KSA looking promising

In 2023, we are looking forward to seeing the further development of KSA’s hospitality market, with many new hotel and restaurant openings, and bigger festival calendars expected across the kingdom.