Luxury Still Driving Travel Landscape In GCC Countries

Statistics from 2018 showed that the UAE alone has 73 percent of the region’s luxury properties. The country is poised to remain the GCC luxury segment leader well into 2022.

A close second in line is Saudi Arabia which is, predicted to witness the sharpest rise in luxury hotel supply by 2022 with a compound annual growth rate of 18 percent from 2018 onwards, compared to just 10 percent in the UAE, 11 percent in Oman and Kuwait, and 9 percent in Bahrain.

The Arabian Travel Market research firm showed that luxury properties in the region tripled in just 10 years, with 95 percent operated by international management brands.

However, things are shifting, including the demographics of the region’s visitors. The surge in three and four-star hotels in Dubai alone shows the market is demanding more variety. For the region to continue to evolve and thrive in the travel sector, options are key.

This diversification has helped keep Dubai relevant, and most of all, affordable. Market leader Jumeirah’s recent Zabeel House openings have proven this change. When the emirate’s foremost luxury brand opens in areas not usually considered travel hotspots, including The Greens, one can see things are clearly evolving.

Dubai is unique, with around 60 percent of its business still in luxury properties. Like Jumeirah, Emaar also responded to this changing landscape, creating Rove Hotels, a mid-market alternative to its luxury counterparts.

With openings such as Kingfisher Lodge in Sharjah, by the emirate’s development arm Shurooq and taken over by luxury operator, Mysk, where peak time rates at the luxury camping lodge rival those of some of the world’s most expensive properties, there is no lack of faith in the luxury market.

Saudi Arabia’s huge investment in the Red Sea is another show of trust in the luxury sector. The projects underway are tapping into the clientele who would usually go to the likes of the Seychelles or Maldives, but allow them the cultural reassurances of Halal travel. The development of Amaala, a new ultra-luxury tourism mega-project earmarked for completion in 2028, will add a massive 2,500 hotel rooms.

But Saudi Arabia, like its neighbor, Dubai, is also broadening its offerings, with over 9,000 combined keys of three, four and five-star international supply expected in 2019.

Amadeus research found there are no signs of letting up, predicting luxury travel in the region will continue at the same pace until 2025 with not only the hotels but their luxury airlines a point of focus too.

Even where experiences have turned into big money, in the likes of the most northern of the UAE’s emirates, Ras Al Khaimah, it’s luxury sector still thrives, properties such as the Waldorf Astoria among its shining jewels. And with the World Cup’s arrival imminent, Qatar continues to put its trust in yet more luxury properties around its capital, Doha.

Learning the lessons of countries like China is key. Suffering an oversupply of luxury properties, the UAE went through a similar challenge, but with a huge investment in mid-market properties, tourism chiefs have ensured the country stays relevant, whatever the region’s economic fortunes.