May 20, 2019- Dubai hotel oversupply will be 'swallowed' after Expo 2020, says Accor CEO.
Dubai hospitality market has seen 'difficulties' over the past years, but will rebound over the next 18 months, so says Accor's CEO Sebastien Bazin. He says that UAE carriers Emirates airline and Etihad Airways will play a key role in preventing a slowdown in Dubai hospitality following the Expo 2020 – let's wait and see.
The current oversupply in Dubai's hotel market, which has led to one hotel owner Emirati billionaire Khalaf Al Habtoor who told Bloomberg don't build more hotels in Dubai. As he says the market is now saturated and he's looking to expand elsewhere. "I would not recommend any expansion in hotels at all to anybody,"
He went further as he called on Dubai's government entities to halt hotel development, even on unfinished projects, as increasing supply causes room rates to decline, interesting also as he heard that Nakheel is announcing 8,000 rooms. He said, Why? "We have enough rooms -- I can give them rooms. I can give them rooms, 5,000 rooms." Pretty rich coming from a man whose investments added 1,600 hotel rooms to the city through one project alone!
But Bazin, the CEO of French international hotel group Accor, disagrees and says all the hotel stock will be fully absorbed after Expo 2020 Dubai, according to Sébastien Bazin noted the market is "overcrowded" and has faced difficulties in the past few years, but would rebound over the next 18 months with the help of Expo 2020. "I am very thankful that [Expo 2020] exists and it's coming, because we have had some difficulties in Dubai for the last 18 months, for the past few years. It is a bit overcrowded in terms of supply inventory," he said, adding that Accor has participated in oversupplying the market through new openings. "Accor is a part of it as well because we did participate in many new opportunities, and rightly so, [but] 2020 will be enormous in terms of impact, in terms of tourism and people visiting Dubai. So oversupply will be swallowed over the next 18 months or 2 years.
I'm not at all worried about the excess supply," Bazin said. Bazin said UAE carriers Emirates airline and Etihad Airways would play a key role in preventing a slowdown in Dubai hospitality following the Expo 2020."People said [there would be a slowdown] after the 2012 London Olympics, [but that] never happened. People told me this in Amsterdam; [that] oversupply will take some time, and there will be a slowdown. No. As long as Emirates and Etihad have so much more traffic, [we're] fine," he said. "Eithad is suffering – there is talk of a merger between Eithad and Emirates – widely dismissed by the companies, but what Dubai has done remarkably is every time you go, you have new restaurants, new museums. They make you visit. They make you want to come back. It's like New York. It's a pretty busy, trendy city.