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Great Hotels Organisation predicts Middle East hotel bubble could burst by 2010

Great Hotels Organisation (GHO; http://www.ghorg.com), exhibiting at ATM in May for the first time, has announced it believes the current Middle Eastern hotel market’s bubble will burst by 2010.

Currently the Middle Eastern hotel market is enjoying a period of sustained growth due to the fact that demand for rooms outstrips supply. During 2007, the Middle East hotel industry was the third fastest growing in the world, with occupancy levels increasing by 5% to an average of 71.6%. Dubai continues to achieve the highest absolute occupancy at 84.2%, yet Oman has emerged as having the region’s strongest growing market. Oman’s growth has been attributed to the current imbalance between demand and supply, yet with room capacity set to double by 2012, this bubble could burst as part of a wider trend also to be seen across the region as a whole.*

According to GHO, this burst is due to occur as a result of the region’s over-reliance on Gulf Cooperation Council (GCC) guests. This is possible due to the high demand for a limited number of rooms, meaning occupancy can be filled by these local markets alone. With hotel construction in the region being one of the highest in the world, however, the increased number of rooms available will cause intense competition for these regional guests, even if visitor numbers continue to increase.

Adding to the situation are the high inflation levels that exist in areas like Dubai. These steady rises risk forcing industry and commerce to host their events outside the Middle Eastern region, in areas like the Far East, where costs are much lower. In the past, Singapore went through a similar market trend which led to a slump in the hotel market, resulting in GHO’s similar predictions for Dubai in the future.

This negative outlook for the Middle Eastern market, however, does not have to become a reality. GHO is confident that if hotel managers in the region begin planning for the future now, a much more positive outcome can be achieved.

Debora Maloney, Director of Business Development, GHO, commented: “It is possible for hotels to protect themselves against any potential downturn in profits but it is important that they act now. The key will be for hotels to act early to open themselves up to the international marketplace, so that any lost guests from the GCC countries can be replaced by international guests to ensure continued growth. This includes placing more emphasis on international MICE, corporate and leisure business, making it ever more important to become associated with an international hotel alliance such as Great Hotels Organisation. Joining an established alliance will enable independent hotels to draw on existing expertise to build their international business without the need for them to struggle on their own.”

For further information on Great Hotels Organisation, visit them at stand TT340 at the Arabian Travel Market, 6-9 May 2008

To pre-arrange a meeting and further details, please contact:
Debora Maloney
+44 (0)20 7383 2335
dmaloney@ghorg.com

-ends-

* All statistics taken from the Deloitte 2007 HotelBenchmark Survey

For further press information, please contact:

Note to editors: The Great Hotels Organisation’s family of brands include Special Hotels of the World (http://www.shotw.com) and Great Hotels of the World (http://www.ghotw.com), a forerunner among luxury hotel marketing alliances representing over 240 of the world’s finest hotels and resorts. Both brands are driven by six core values, notably to keep members’ costs down, to view each member as unique, to be innovative with technology, to value the power of the alliance, and to maintain the quality and integrity of the brand. Whichever brand is right for your property, the Great Hotels Organisation has a different and customer-driven approach to hotel sales and marketing. The Great Hotels Organisation manages the “GW” private label GDS chain code and toll-free voice reservation numbers operate in the USA and Europe. Further information on the Great Hotels Organisation can be found at http://www.ghorg.com.

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