Even the chaos on the roads around the Dubai International Convention and Exhibition Centre could not dampen the relentless optimism that pervaded the Arabian Travel Market (ATM) this week. It took participants more than an hour to get from the show to the nearby Address Hotel for the opening party, which was so oversubscribed that by mid-evening anxious doormen could be heard asking that entry be declined in the interest of safety - but still, they kept smiling.
European and American journalists, coming from colder economic climes, kept asking each other if this was for real, or whether the local travel industry was simply in denial. Certainly, there were a few gaps in the hall where a handful of exhibitors had pulled out, and some stand holders - away from the buzz of the Middle East halls - complained that while last year they had not even had time to visit the bathroom this year they had nothing to do. Yet in the days leading up to the show my inbox had bulged with ever more insistent e-mails requesting attention from the 2,100 exhibitors fighting to broadcast their story.
In fact, the real news is that it's you and I who should be smiling. The mantra, repeated in countless press conferences across companies and continents at this year's ATM, was: "we are well positioned for the recovery". Which, when translated, means that to keep the show on the road, hotel room prices have had to come down dramatically and are continuing to fall. It's become a buyer's market and, in order to survive, hotels all over the world are adjusting - or "correcting" - their prices. As a result, profitability has suffered far more than occupancy levels.
Patrick Antaki, the general manager of Le Méridien Al Aqah Beach Resort, Fujairah, where they have also had an algal bloom known as a red tide to contend with, says: "Our prices are 50 per cent less than in Dubai and 35 to 40 per cent less than this time last year. Because of the global economic downturn, we have adjusted our rates to give better value for money. The result is that we had 88 per cent occupancy in February and 90 per cent in March. Our profitability has been affected but for the guest the experience is the same, but costs less." It is a policy that other hotels will have to follow if they have not already done so. Saeed bin Saeed Al Sharqi, the chairman of the Fujairah Tourism Bureau, said that the emirate has suffered a 40 per cent loss of business, but at least the red tide has disappeared. "I swam in the sea this morning," he said. "And it was lovely."
Nigel Pocklington, the managing director of Hotels.com, which launched its Arabic website at the show, confirms the story. "We are processing as many, if not more, transactions, but hotels have cut their prices so income is down.
"It's good news for the consumer. The average price of a hotel room worldwide now is at the same level as in 2004. It's a tough environment but there are pockets of demand and the Middle East is one of them.
"One of the reasons that the travel industry is less severely hit than others is that it has flexibility in its pricing. The other factor is... [that] while people will give up eating out and other luxuries, trips away are seen to be essential. People will continue to travel and to stay at hotels and they are finding that they can trade up. The gap between five- and four-star [hotels] is disappearing. They can stay at a five star on the same budget as five years ago."
Many are predicting that the new, lower prices will not inflate again any time soon. Devesh Chatuvedi, the director general of India's ministry of tourism, said that hotels in India had previously been too expensive. "It is right that prices have come down and it is our belief they will stay down. You can get a five-star hotel room for between US$120 and $140 now, and if you bargain you can even get it for $110."
Prices at hotels in Abu Dhabi and Dubai have not dropped to these levels - the two cities rank in the top three most expensive in the world according to a Hotels.com survey based on bookings made through its website rather than hotel rack rates - but, in Dubai, prices are coming down gradually and the show's organisers also talked about a market correction. Mark Walsh, the director of Reed Travel Exhibitions, referred to this week's ATM as a "watershed moment" particularly for the Middle East market.
There were more reasons to be cheerful from James Hogan, the chief executive of Etihad Airways. Unveiling the new $70 million (Dh257m) first-class suites complete with sliding doors for complete privacy - in fact, they looked remarkably similar to the first-class suite on Emirates' stand - Hogan said there had been, and would continue to be, heavy discounting in economy class. "I have worked in the industry since 1975 and have seen lots of crises - Sars, war, the tsunami, fuel price changes - and it's all about confidence. It's our role to stimulate business; we have to manage cuts, not panic, and be more tactical."
Travellers can expect to see cheap fares over the summer, and in the autumn, the airline will launch a campaign aimed at enticing economy-class passengers. "Behaviour is different now to what it used to be; people will still travel but they are wiser about how they spend their dollars. There will be more people taking time out, taking gap years, and we have to cater for those needs," Hogan said.
To bolster confidence, the show was used to announce several new projects highlighting both investment in the region and local companies investing abroad. Anantara's latest resort, Qasr al Sarab, will open later this year in Liwa; Sofitel confirmed that its new hotel on The Walk at Jumeirah Beach, Dubai, will open this summer; Qatar Airways announced that six new routes will take off over the next 10 months; Raffles announced that it would be managing a new hotel in the Holy city of Mecca.
All of these have been long in the planning stages and there was a noticeable absence of brand new, headline-grabbing projects. For those, I assume, we will have to wait a few years - or at least until the 20th anniversary of the ATM next year.
sryan@thenational.ae
The specs
Price: From Dh529,000
Engine: 5-litre V8
Transmission: Eight-speed auto
Power: 520hp
Torque: 625Nm
Fuel economy, combined: 12.8L/100km
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Book%20Details
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THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
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The Lost Letters of William Woolf
Helen Cullen, Graydon House
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
Meghan%20podcast
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Which honey takes your fancy?
Al Ghaf Honey
The Al Ghaf tree is a local desert tree which bears the harsh summers with drought and high temperatures. From the rich flowers, bees that pollinate this tree can produce delicious red colour honey in June and July each year
Sidr Honey
The Sidr tree is an evergreen tree with long and strong forked branches. The blossom from this tree is called Yabyab, which provides rich food for bees to produce honey in October and November. This honey is the most expensive, but tastiest
Samar Honey
The Samar tree trunk, leaves and blossom contains Barm which is the secret of healing. You can enjoy the best types of honey from this tree every year in May and June. It is an historical witness to the life of the Emirati nation which represents the harsh desert and mountain environments
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
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The%20specs
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The Specs:
The Specs:
Engine: 2.9-litre, V6 twin-turbo
Transmission: 8-speed automatic
Power: 444bhp
Torque: 600Nm
Price: AED 356,580 incl VAT
On sale: now.
NINE WINLESS GAMES
Arsenal 2-2 Crystal Palace (Oct 27, PL)
Liverpool 5-5 Arsenal (Oct 30, EFL)
Arsenal 1-1 Wolves (Nov 02, PL)
Vitoria Guimaraes 1-1 Arsenal (Nov 6, Europa)
Leicester 2-0 Arsenal (Nov 9, PL)
Arsenal 2-2 Southampton (Nov 23, PL)
Arsenal 1-2 Eintracht Frankfurt (Nov 28, Europa)
Norwich 2-2 Arsenal (Dec 01, PL)
Arsenal 1-2 Brighton (Dec 05, PL)
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
