Booming Business Development drives Hotel Sector Growth in Middle East

Oil exploration and trade may have contributed to massive economic growth in the Middle East a few decades ago, but recent developments including economic diversification, market liberalization and the establishment of internationally renowned business centres and financial zones have had a positive impact on the region’s balance sheet.

With extensive promotion in international markets about the benefits of business in the Middle East and the subsequent influx of foreign investment, it is not just the stock exchanges that are recording strong growth – the hotel sector has experienced a significant boost in demand.

As one of the largest hotel operators in the region, InterContinental Hotels Group has witnessed a healthy growth in business in the Middle East during the past decade. Chris Moloney, Chief Operating Officer, InterContinental Hotels Group, Middle East and Africa, said, “The Middle East has always been an exceptionally vibrant market and an area that InterContinental Hotels Group has consistently achieved strong results.

“In the past decade, especially with the initial introduction of an increased number of tax free trade zones, we have experienced wonderful growth and a higher level of demand than ever before at our properties that accommodate business visitors. Even though many major business projects are still in the development phase, the hotel sector is already experiencing the positive knock-on effect. We are witnessing the strongest growth in the UAE, Qatar, Saudi Arabia and Bahrain.”

Since the formation of the UAE in 1971, Dubai has developed rapidly from an oil and gas based state to a broad-based market economy. Now offering a world-class airline, Emirates Airlines and world-class tourism – including more than 30 five-star hotels, Dubai set itself as the forerunner in the Middle East with the establishment of Dubai Internet City and Dubai Media City. Hosting both Annual Meetings of the Boards of Governors of the World Bank Group and the International Monetary Fund, Dubai and its first-class hotels were firmly established on the global stage.

“Dubai is one of the fastest growing cities in the region, and one of the world's most prominent centres for business and leisure. But from InterContinental Hotels Group’s perspective, we expect further growth at our properties.” said Moloney.

Across the Gulf, the future looks just as bright for the business and hotel markets. In Bahrain, InterContinental Hotels Group is forecasting strong growth with the development of the Bahrain Financial Harbour – which is a US$1.3 billion integrated master-planned development. The project, which reinforces Bahrain's position as  the international financial centre of the Middle East, has been designed to address every single need of the financial service sector. With a reputation as one of the region's leading banking and finance centres, the foundation stone for the development was laid in December 2002. To be built on a land area of 202,272 sq metres (2.17 million sq feet), construction on the project is likely to be completed by 2010.

The future for the hotel sector is also steadily growing in Saudi Arabia where the citizens of GCC countries have recently been given equal treatment in purchasing and exchanging Saudi stocks, including shares of banks, insurance companies and real estate firms.

In Qatar – a market that has become a trailblazer in terms of economic growth – InterContinental Hotels Group has also experienced a positive upturn in occupancy rates at its InterContinental Doha property with the ongoing economic development. Attracting world attention with its forward-looking leadership, favourable economic and political climate and strategic importance, Qatar has further developed its international stance with expatriate and foreign investors recently welcomed by the Doha Security Market, which will provide the people of Qatar to prosper further.

“Having developed greatly since the discovery of oil in Qatar in the 1950s and the development of the North Dome Gas field in the 1990s, the country’s massive oil and natural gas reserves continue to be the basis for Qatar’s future growth, but diversification into other fields has accelerated. The InterContinental Doha hotel sees visitors to Qatar from all sectors and this truly demonstrates what a liberalized market the country boasts,” said Moloney.

“It has been a great year for InterContinental Hotels Group in the Middle East with the Middle East Global Sales Office reporting that over 50% of the revenue generated was being driven into InterContinental, Crowne Plaza and Holiday Inn hotels and resorts within the region. We are keenly aware that a great portion of the growth can be attributed to the strong rise of business visitors to the region.”

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