UAE’s hospitality sector is expected to contribute more than 659,000 jobs by 2026, according to a study conducted by Knight Frank in collaboration with Oxford Economics.
The study focused on the country’s hospitality sector and the anticipated fundamental changes the market is expected to see over the next decade.
In the last 10 years to 2017, the sector’s direct contribution to the country’s overall gross domestic product (GDP) has increased by 138% with employment in the sector growing by 119% over the same period. By 2026, forecasts from Oxford Economics indicate that the direct contribution will increase by an additional 72% and as a result, related employment will grow by 16% to over 659,000.
The total number of overnight stays has increased by 155% in the 10 years to 2017 to 70.9 million. According to the report, total overnight stays is expected to increase by 59% to over 113 million by 2026.
In 2017, the top source markets were recorded as India, UK, Saudi Arabia and China in that order but by 2027, Saudi Arabia is expected to surpass UK as the second biggest source market with 10,392 overnight stays accounting for 56% increase while India is expected to retain its top position with 16,229 total overnight stays projecting a 76% increase. Between 2007 and 2017, India registered a whopping 351% increase. Egypt is expected to join the top source markets within the next decade as well and is expected to see 116% increase.
Head of UAE Research head Taimur Khan, commented: “As the source markets continue to evolve the hospitality market will have to adapt to cater for a range of demand at different price points. Currently the supply of hotel stock by the number of keys is very much skewed towards high-end properties. As a benchmark, in Abu Dhabi and Dubai currently four and five star hotels account for 66% and 57% of total available rooms respectively.
“The source markets from which incremental room night demand will be generated are anticipated to be comparatively price sensitive and therefore will seek more affordable accommodation. Six of the top 10 forecast source markets have relatively low income per capita, and even with a growing middle class this is unlikely to translate to demand for upscale or luxury hotels,” he explained.