I was delighted to moderate a panel discussion at the GIOHIS conference in the UAE last month on the evolution of the multi-use space in hotels. Not only did my knowledgeable group of panellists impart their wisdom on the topics under discussion, but I had the opportunity to travel to Dubai for the first time since the start of the pandemic.
I was reinvigorated by the energy of the international hotel investor community congregating at the conference and in particular, how upbeat the hotel industry in the Middle East and Dubai itself was.
According to STR* 18,000 hotel keys had opened or were due to open in the Middle East alone this year, with approx. another 23,000 in the pipeline for 2022. With 100,000 keys expected to enter the Saudi market by 2030 via a number of giga projects, the stage is set for the transformation of Saudi Arabia into a world class tourism destination.
The success of the Abraham Accords between UAE, Bahrain and Israel was evident from the number of Israeli investors present at the conference, to the number of Israelis visiting and relocating to Dubai. No doubt due to the fact that Dubai has been opening its arms to visitors and short-term residents during the pandemic and this has led to a marketed increase in investment and relocation of business.
The panel discussion I moderated was focused on the current issue of spare capacity in hotels and how spaces can be repurposed to respond to shifting consumer demand. My panellists included Kory Thompson, Country Head Middle East, IWG plc International Workplace Group; Samer Sabra, VP Investment & Development, Ghina Real Estate and Vivi Cayhadi Himmel CEO, AltoVita.
Our industry has seen five key trends that have been accelerated by the coronavirus pandemic, namely:
Hotel visitors increasingly combine business and leisure when they stay. CNN reports that 60% of business travellers take a day or two to relax after a business trip. Why hurry back to the office when it’s now acceptable to attend zoom calls whilst on holiday?
Due to the pandemic, consumers are now taking their health very seriously. Hotel guests are seeking more comprehensive spa and vegetarian F&B offerings, in-room fitness equipment, better air filtration and more thorough cleaning regimes.
- Hybrid development
Guests are taking less frequent trips but staying longer. They are looking for properties offering Live-Work-Stay and play facilities. Developers are responding with mixed use schemes offering extended stay hotels, co-working and co-living spaces. Also, we note that hotels are offering pop-up accommodations (cabins or tents), that allow guests to socially distance and experience nature.
This is in sharp focus since COP26 and hoteliers are now considering ways to lower their carbon footprint by harnessing solar energy, ground or air source heating, providing electric car charging facilities and exploring the various green accreditations schemes.
- Flexible and Experiential Spaces
Some ways that hotels are diversifying from the rooms +F&B formula is by offering experiential spaces. This can range from dedicated wedding centres, creative studios with green screens, e-sport facilities and cloud kitchens.
I was keen to hear how the panel thought repurposing multi-use space may help operators stay one step ahead and generate revenues.
Samer Sabra, VP Investment & Development, Ghina Real Estate explained their focus was on ensuring that new developments incorporate very flexible, multi-use spaces, that can help bring energy and footfall to the hotel. This includes retail, F&B concepts and entertainment for families and adults alike. Samer stressed the mix of uses has to be synergistic.
Kory Thompson, Country Head Middle East, IWG plc International Workplace Group explained that in developing a Regus or co-working facility within a hotel, they take a good look at the market and try to ensure that the co-working facility offer matches demand in that area. They do not lease the space, but rather they enter into a management contract with the hotel, to operate co-working or club space within the hotel. An ideal situation is where the hotel offers attractive room rates to IWG members and also offers F&B within the co-working facility at an affordable price.
Vivi Cayhadi Himmel CEO, AltoVita, explained that post pandemic corporate clients are travelling less but staying longer. So, they look for rooms or suites that allow them to work from the room. Vivi explained, that if you have a couple travelling together and they are both on Zoom calls, the room has to be able to accommodate this. Furthermore, major corporations now also have ESG requirements so Altovita, a digital corporate housing solutions provider, has to ensure that serviced apartments and hotels meet specific ESG criteria. Vivi went on to say that to capture more revenues, it’s important to analyse intelligence from the hotel’s PMS system to be able to react to changing demand. Hoteliers must examine how customers are using the hotel and if they want to stay longer – give them a good deal.
* Source: 2021 STR, LLC / STR Global, Ltd. trading as “STR”. © CoStar Realty Information, Inc. data collected by STR.
Katrina Craig leads the Hotel Solutions Partnership, a global hotel and hospitality consultancy, helping investors, developers and operators to acquire, develop and/or operate hotels, integrated resorts and private clubs internationally.
Over the past 20 years, she has delivered assignments across the United Kingdom, Europe, the Middle East and Asia. She has undertaken feasibility studies and turn-around plans, implemented development strategies, and advised owners on acquisitions as well as divestment of assets and operating platforms.
Passionate about sustainability, Katrina played an active role in founding the Philippine chapter of the World Wildlife Fund. She also chaired the International Hotels Environmental Initiative and is a former member of Sustain Worldwide, a group of hotel and resort industry players for whom sustainable development is a stated objective.