How events are fueling hotel performance

Fall and winter are traditionally high seasons for tourism in the Middle East. As such, an important driver of demand has always been events. Kostas Nikolaidis, Middle East and Africa executive for STR, takes a look at how the region’s calendar of events is shaping up.

With Covid-19 putting the brakes on the events industry for far too long, it is encouraging to finally witness a comeback. And the event calendar for the region is looking better than ever before. Expo 2020

The news of Expo 2020’s postponement due to Covid-19 crashed the hopes of a swift comeback for the tourism and event sector last year. Despite the logistical and health challenges it had to overcome, Expo 2020 is back with a bang. The “world’s greatest show” opened its doors on October 1, 2021, and is already proving a success. A muchneeded demand boom is materializing and sending ripples of hope to everyone out there, particularly in the hospitality industry. The enormous amount of preparation and investment in hotel infrastructure is finally paying dividends. Since Dubai won the project in 2013, a further 199 hotels representing 52,328 rooms have been delivered to meet the demands of both the mega event and also Dubai as a fastgrowing destination. Significant increases in hotel performance are being reported so far. The Average Daily Rate (ADR) climbed to AED 583 for the first seven days of Expo 2020. Last time these rates were reported was during Eid Al Fitr in May. Forecasts indicate performance peaking over the coming few months as demand and business confidence returns.

Formula 1

Building on the success of the Bahrain and Abu Dhabi Grand Prix over the years, the region is now pushing to become a prominent host to even more races. The positive contribution of an F1 Grand Prix to the hotel sector has long been proven. Abu Dhabi hotel revenue per available room (RevPAR) reached AED 1,275 in 2019 during the racing weekend, almost a 270 percent increase compared to the previous weekend. Similar analysis for Manama reveals RevPAR growth of 122 percent between the successive weekends in 2019. Therefore, it is of no great surprise to see new destinations scrambling to come on the F1 race calendar.

The inaugural Saudi Arabian Grand Prix in Jeddah is taking place on December 5, 2021. The kingdom has proven its love for motorsport in recent years through the successful hosting of Formula E races in Diriyah as well as the Rally Dakar. Jeddah hoteliers are eagerly anticipating the race, which represents a massive growth opportunity. A last-minute addition to the calendar is Doha. The Qatari capital, which has risen to prominence in the sports world as the host of World Cup 2022, is welcoming an F1 Grand Prix in November 2021. Moreover, it has secured the race for another 10 years from 2023, the year following the World Cup. Qatar hotel performance has remained highly resilient throughout the pandemic. Hotel occupancy in the first week of October 2021 was averaging 69 percent, with an ADR of QAR 392. However, even at those reasonably strong performance levels, the expectation is for a noticeable demand boost. Finally, the event will also allow organizers and local stakeholders to conduct yet another rehearsal, fine-tuning logistics and procedures for the much bigger and complex challenge that World Cup 2022 represents.

There has never been a better time for events to return, with every tourism and hospitality stakeholder in the region banking on them. Hopes are high that their success will translate into enhancing global perceptions of travel and safety, further bolstering the tourism appeal of the region for years to come.