Dubai: UAE hotels will not get into a recruitment overdrive in the coming weeks to take on increased demand for the final weeks of the year during the FIFA World Cup in Qatar. This is because hotel operators here reckon that the lean workforces they had during the Expo months will be enough to take care of demand from mid-November onwards.
Hotel operators came out of the pandemic with fewer staff, and despite an Expo-led recovery from late-2021, the industry seems to be cautious about making additional hires. This is quite a contrast to the situation in the airline business and the wider travel industry, which have been taking back staff or hiring anew.
But hotel operators say they have been doing just fine with the lean structure. “We were able to handle all that demand during the six-month Expo 2020,” said Thomas Kurian, Hotel Manager, Leva, which operates a hotel near Downtown Dubai. “This (a lean workforce) was becoming the norm for hotels even before Covid, but pandemic was the reason we got into that sphere, and it has worked well for us.”
“We are training our staff for the World Cup phase because it will be an extremely busy month and fans will be coming in at odd hours.
“There's a huge gap between the room availability in Qatar and the tickets being sold. It is a highly lucrative market for us to capitalize on.”
Other hotel operators in the UAE do echo these views, with many having already put in place more staff in September-October last year, in time for the Expo.
A significant bounce
The World Cup phase from mid-November is expected to provide a 15-20 per cent additional traffic for hotels in Dubai and the UAE. Because the current hotel room capacity, industry sources say, will fall well short of the demand that ticket sales for the matches are generating. Shuttle flights to and from the UAE while staying here would be the obvious route for a good number of football fans to take.
Early ticket sale numbers have given hotel operators an estimate of the actual demand - and it’s nothing short of substantial. Last week, FIFA said that ticket sales for football's biggest tournament reached 2.45 million, and around 500,000 tickets are still available.
Doha expects to offer around 130,000 hotel rooms during the event, while Dubai has more than 140,000 rooms.
Q4-2021 was one big hit
Even with the quadrennial sporting event, Dubai’s hotels will find it hard to break some of the records set during the Expo months from October 2021 to March. “Dubai might get close to last year’s average daily rate (ADR) on some dates, but the bar is already set quite high due to Expo,” said Kostas Nikolaidis, Middle East & Africa Executive, STR. “It would be a surprise if Dubai rates climbed higher than last year during the fourth quarter of this year and first quarter of 2023,”
“Even though there is no Expo this year, Dubai still has a very comprehensive event calendar. “F1 in Abu Dhabi is always impactful, and there will be eventual overflow demand from the FIFA World Cup later in December.”
Some travel and tour operators are keeping close track of currency depreciations and concerns over high inflation as potentially slowing down tourist spending in the peak phase ahead. “Around half of Dubai’s international visitors come from emerging markets where currencies have depreciated this year, making Dubai a relatively more expensive destination,” said Emirates NBD in a report. “High inflation and borrowing costs have also eroded purchasing power for consumers globally and may weigh on tourism demand in the second half of 2022.”
One of the UAE’s biggest source markets – UK- will see inflation peaking at around 19 per cent in early 2023, according to a report from Citigroup.
EUROPE TO BE BIGGEST SOURCE MARKET
Leva expects to see occupancy rates in the range of 90-95 per cent during the FIFA World Cup period, and is already having enquiries from as far afield as Argentina and Mexico. But, Europe will be the big money-spinner for the hotel operator.
“It has traditionally been the biggest source market and we will be banking on bookings from the UK, Germany, Italy, and France,” said Thomas Kurian of Leva. “September will be a very crucial period for us to close in those bookings.”