MUSCAT, 11 August – The hospitality sector in the GCC projects is expected to return to pre-pandemic levels in 2022, registering a 74.8 per cent year-on-year growth and reaching a revenue of $26.3 billion.
It adds the industry is expected to grow with a Compounded Annual Growth Rate (CAGR) of 6.6% up to 2026.
UAE-based investment banking advisory firm, Alpen Capital, launched its latest GCC Hospitality Industry report on August 3 featuring detailed studies and forecasts on the hospitality sector, analyzing recent trends, growth drivers, and challenges facing this dynamic segment. It also profiles some of the renowned hospitality companies in the region.
Factors like increasing tourist arrivals, mega events like EXPO 2020 Dubai and the upcoming FIFA World Cup 2022, and easing of visa regulations will lead to the industry’s growth.
With regional governments actively supporting the development of business, leisure, and entertainment centers through significant investments, the GCC is becoming a hub of activity with a long list of events in the pipeline.
The GCC Hospitality industry revenues are forecasted to grow at a pace of 6.6% CAGR between 2022 and 2026 to reach $34.0 billion.
Strategies adopted by the regional governments, economic recovery, increase in tourist arrivals along with innovative solutions being offered by the operators are primary drivers of growth for the industry.
Growth in the hospitality sector revenue of individual GCC countries is expected to range from a CAGR of 2.9% to 8.0% between 2022 – 2026.
The largest markets in the GCC, Saudi Arabia, and UAE, are expected to witness CAGRs of 8% and 5.5, respectively. Kuwait, Oman, and Bahrain are expected to grow at 7.1%, 6.3%, and 2.9%, respectively.
Whereas growth in Qatar is expected to normalize post the completion of the FIFA World Cup 2022 with a CAGR of 4.3% between 2023-2026.
After witnessing a significant increase this year, the hospitality operating metrics are likely to witness steady growth going forward.
The average occupancy rate across the GCC is forecasted to rise from 57% in 2022 to 62% in 2026.
The Average Daily Rate is forecasted to increase from $145 this year to $151 in 2026, whilst Revenue Per Available Room is expected to increase from $83 to $93 representing an annualized growth rate of 1.1 percent and 2.9 percent%, respectively.
Oman’s hospitality industry is experiencing a surge—almost 50 percent growth in the number of tourists visiting the country this year. Now, the industry is expected to grow over 90 percent year on year and reach $700 million by the end of 2022, says Alpen Capital’s GCC Hospitality Industry Report.
The impact of good work done by the government will be long term and the country’s hospitality industry is expected to achieve a compound annual growth rate (CAGR) of 6.3 percent to reach $900 million between 2022 and 2026.
The government aims to earn over $22.5 billion annually from tourism by 2040. To achieve this target, it plans to build various points of attraction for local and international tourists at different locations, including theme parks, and nature tourism.
The report says that these “projects together are likely to increase international tourist arrivals in the country, which is estimated to grow at a CAGR of 36.9 percent over the four-year period to reach 3.7 million in 2026.” — Oman Observer