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A lean workforce will handle World Cup demand in the UAE: hotel operators

Updated  

Aug-23 11:41 first published at 11:41 AM


Hotel bookings for the FIFA World Cup have begun in earnest, and those in Dubai and the UAE are buzzing from the increased demand.
Photographer: Ahmed Ramzan/Gulf News

Dubai: The UAE hotel industry will not go into overdrive in the coming weeks to meet increased demand for the final weeks of the year during the FIFA World Cup in Qatar. This is because hotel operators here believe that the lean workforces they had during the Expo months will be sufficient to meet demand beginning in mid-November.
Hotel operators emerged from the pandemic with fewer employees, and despite an Expo-led recovery beginning in late-2021, the industry appears wary of making new hires. This is in stark contrast to the situation in the airline industry and the broader travel industry, which has been rehiring or hiring new employees.

However, hotel operators claim that the lean structure is working well for them. “During the six-month Expo 2020, we were able to handle all of that demand,” said Thomas Kurian, Hotel Manager at Leva, which operates a hotel near Downtown Dubai. “Even before Covid, this (a lean workforce) was becoming the norm for hotels, but pandemic was the reason we got into that sphere, and it has worked well for us.”
“We are preparing our staff for the World Cup phase because it will be a very busy month with fans arriving at odd hours.”
“There is a significant gap between room availability in Qatar and tickets sold.” It is a very profitable market for us to enter.”
Other hotel operators in the UAE share these sentiments, with many hiring more staff in September-October of last year in preparation for the Expo.

A significant increase
The World Cup phase, which begins in mid-November, is expected to generate 15-20% more 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 more than 5 million 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.”

Inflation effect
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 baking 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.”

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