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Hard hit Dubai hotels prepare for September recovery

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Industry News: 21st May 2020

About 30 per cent of jobs in Dubai’s hotel industry are likely to be lost over the summer until demand recovers from the pandemic, according to research firm STR.

In an updated Bloomberg report today (May 21, 2020) the news outlet said more than a third of the city’s 120,000 hotel rooms will ‘probably remain closed through the typically slow summer months’.

Bloomberg spoke with Philip Wooller, Middle East and Africa director at STR Global. The industry employs about 40,000 people, he estimated.

The job-loss estimate is a “minimum,” Wooller said. “Otherwise you’re asking the owners to reach into their own pockets and, while some might do that, others won’t be able to afford it.”

Almost 17 million tourists visited the city last year, contributing about 12 per cent to economic output.

Hotel occupancy slumped to 23 per cent since the pandemic hit from about 80 per cent one of the highest in the world, according to STR. Average occupancy globally is around 20 per cent and has been mostly held up by demand for accommodation for medical staff and quarantines.

“Dubai’s Hospitality businesses are resuming operations based on issued government reopening guidelines during this pandemic,” the emirate’s media office said in a tweet. “Dubai’s hotel sector is healthy and this prudent approach prepares the industry for an even stronger resurgence post Covid.”

Occupancy is expected to recover to between 50 and 60 per cent by September as demand improves and hotels reopen, Wooller said. Some operators, especially beach hotels, may see demand from residents unable to travel abroad seeking local vacations instead.

Bloomberg reported that closures have hit most hotels in the rest of the Gulf, with nearly 43 per cent of rooms in the Omani capital being shuttered. In Mecca, more than 80 per cent of rooms were closed as the city that hosts Islam’s holiest site, which had the worst outbreak in Saudi Arabia.

Some hotel owners in Qatar are benefiting from the government leasing nearly 30 properties. Qatar, which is set to host the soccer World Cup in 2022, is still benefiting from demand as infrastructure preparation continues. In Dubai’s Emirati neighbour, Abu Dhabi says just 17 per cent of the city’s 29,000 rooms closed. Occupancy is hovering around 50 per cent as the government leases rooms for essential staff and for quarantines, according to STR Global.

READ FULL UPDATED BLOOMBERG NEWS REPORT HERE

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Why Brits plan to spend up to £3.8bn on hospitality in first week after lockdown ends

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Industry News: 21st May 2020

In the UK the public’s wish to dine out or get a way for a family break is worth £3.8billion (US$4.6bn) to the economy…within just one week of lockdown ending.

New research from Caterer.com this week survey more than 2,000 Brits and revealed 63 per cent want to support local hospitalty businesses as soon as possible, as long as sfety measures are in place.

And it revealed that almost half the people across the country have a new found apprecaition and recognition of the hospitality sector and more than half were eager for it to ‘get back to normal’.

Almost a third (31 per cent) say they will go to the pub within a week of being allowed and in London it was more than half (51 per cent) and 30 per cent will be dining out within the first week.

The insights from Caterer.com show that 62 per cent of Brits would feel comfortable eating in restaurants that occupied every other table only and 55 per cent agreed that maximum group size on a table should be four.

But it was another blow for buffet-style dining with seven in 10 of those surveyed said that was not an option until a vaccine is discovered.

Caterer.com concluded the results support the call from the sector for additional support from the Government, in order to make operation financially viable with 67 per cent supporting Government cash to ensure survival. Even though this money would have to come from central funds, the survey found around 40 per cent say they would pay more in return for better cleaning and social distacing measures.

The survey included suggestions from customers to help make them feel comfortable going out:

  • 54% think hand sanitiser should be provided for all customers and staff
  • 47% would like all staff to be trained on a new cleaning protocol
  • 36% think Social Distancing Managers should be implemented
  • 22% think that all staff should wear PPE
  • 18% think they should be able to order their meals digitally

Neil Pattison, director at Caterer.com, said: “While this has been an incredibly painful time for the sector, it’s encouraging to see the public have a huge appreciation for what the hospitality sector provides to communities. There is strong appetite to support these businesses and workers in getting back on their feet.

“While measures like having more hand sanitiser available and training staff to introduce new cleaning regimes may be more simply implemented, social distancing measures will mean far fewer customers can be served at one time.

“As a result, there is deep concern about how hospitality businesses will survive economically in the short and long term.

“We are grateful for the Government’s support to date, however, there is still much more work to be done and it’s vital that this continues.”

 

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June 10 Investment Summit Programme

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Air France dumps the A380 superjumbo and Emirates wants out of new orders

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French flag carrier Air France has announced on Wednesday afternoon that it will retire its nine strong Airbus A380 fleet with immediate effect.

The airline’s fleet of superjumbos was initially set to be retired in 2022, but in light of the Coronavirus, the Air France-KLM Group has decided that it will bring this forward.

The company owns five of its A380s and another four on lease. Most of the fleet has been grounded since March, as the worldwide pandemic brought air travel to a dramatic stop.

Air France said in a statement: “The phase-out of Airbus A380 fleet fits in the Air France-KLM Group fleet simplification strategy of making the fleet more competitive, by continuing its transformation with more modern, high-performance aircraft with a significantly reduced environmental footprint.”

The airline received its first A380 in October 2009 and it’s most recent delivery was in June 2014, making the youngest aircraft in the fleet a mere six years old. Air France’s Airbus A380 fleet will be replaced by smaller long-haul aircraft, including Airbus A350 and Boeing 787 Dreamliner, the carrier says.

The £164million superjumbo is close to the end of its production run after demand switched to smaller jets, and airlines including Air France have been idling the double-decker temporarily because of the coronavirus crisis. 

Air France announced a fresh 500million euro ($548.50million, £449million) writedown as it permanently retires its nine jets, just over a decade after becoming the first European airline to operate them.

The French announcement came hours after aircraft engine maker Rolls-Royce announced 9,000 redundancies across its UK operations.

Emirates – which operates more than 100 A380s and has been one of the few airlines to adopt it – no longer wants to take all eight A380s due to the pandemic and is in talks with Airbus, industry sources said.

Bloomberg earlier reported that Emirates hoped to cancel five.

Both Emirates and Airbus said they were in regular dialogue with each other, declining further comment.

Halting Emirates deliveries could be painful for both sides, with the airline foregoing deposits and Airbus left with parts already ordered and no significant market to dispose of them.

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Africa escapes worst of first Covid-19 wave by acting quickly, says United Nations

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UN chief calls on the international community on Wednesday to show solidarity with Africa in the face of the threat of the coronavirus.
 
As Covid-19 spreads to Africa, countries on the continent have responded quickly to the pandemic, according to UN.news.org.
 
“To date, the number of reported cases is lower than we feared – espite this, the stakes remain high, ”warned the Secretary General of the United Nations, António Guterres , in the presentation of a report on the impact of the coronavirus in Africa.
 
The pandemic is already threatening the progress made in Africa, at the risk of worsening existing inequalities and increasing hunger, malnutrition and vulnerability to the disease. 
 
As proof, the demand for basic African products, tourism and remittances is declining. The opening of the African Continental Free Trade Area (ZLECA) has been postponed and millions of people could fall into extreme poverty. To date, the virus has killed more than 2,500 people in Africa.
 
In this context, “vigilance and preparation are essential,” said Mr Guterres who congratulated the countries of Africa, as well as the African Union (AU), for the measures they have already undertaken. 
 
“Most have been quick to act to strengthen regional coordination, deploy health workers and establish quarantines, containments and closed borders,” he said. The UN is also mobilized alongside Africans in the face of threats from the coronavirus. United Nations agencies, country teams, peacekeeping operations and humanitarian actors are fully supporting these efforts. 
 
“The UN solidarity flights have made it possible to transport millions of screening kits, masks and other equipment, across almost the entire continent,” said the Secretary-General.The United Nations released a briefing note on Wednesday (May 20, 2020) that highlights a series of pressing coronavirus problems in Africa.
 
“We call for international mobilization to strengthen health systems in Africa, maintain food supply chains, avoid a financial crisis, support education, protect jobs, keep households and businesses afloat and protect the continent from lost revenue and export earnings,” said Guterres, noting that African countries must have the same rapid, fair and affordable access to all future vaccines and treatments, which should be seen as goods.
 
The Secretary-General has called for a global recovery plan that represents at least 10 per cent of global gross domestic product. 
 
“For Africa, this means more than US$200 billion in additional support from the international community,” he said. On the security side, the UN believes that it will also be essential for African countries to continue their action to silence arms and confront violent extremism. Mr. Guterres welcomed support across the continent for his call for a global ceasefire. 
 
“The political processes and the elections represent in the months to come so many opportunities to take important steps in terms of stability and peace,” he said.
 
 

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ITIC Investment Summit June 10 Registration

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