Hard hit Dubai hotels prepare for September recovery

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.





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

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.”





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

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.




Italy opens its borders to European tourists next month

Victor Emmanuel II Monument, Rome, Italy

Italy will reopen its borders on 3 June, following a decision taken over the weekend by Prime Minister Giuseppe Conte and the Council of Ministers.

From this date, EU citizens and people living in the Schengen area will be able to travel to Italy, without being placed in quarantine for two weeks.

According to an Italian government press release, the decision could however change based on how the “epidemiological risk” evolves.




Until now, travel to Italy has been restricted to Italians living abroad or foreigners who live in the country wanting to return, due to the coronavirus pandemic.

A border reopening in early summer is good news for the country’s tourism sector, one of the most important sectors in the country.

With 32,000 deaths Italy has been severely affected by the coronavirus, the third highest figure behind the US and UK.


Dr Taleb Rifai, former UN WTO secretary calls for ‘safe’ tourist areas to be created


Tourist destinations will have to consider offering Corona-free hotels, beaches and areas to ensure that visitors feel safe ‘from the minute they leave home until they return”.

The initiative was voiced by  Dr Taleb Rifai, the Former Secretary General of the United Nations World Tourism Organization (UNWTO) and chairman of the ITIC advisory board.

He was speaking at a new grassroots initiative with leaders from the travel and tourism industry joining from 76 countries the #rebuildingtravel globally: High Level Taskforce Meeting.

At the meeting, hosted by ETurboNews, Dr Rafai revealed his four pillars for the recovery of the travel & tourism sector.

Rebuilding.travel started two weeks ago and already many of the who’s who in the global travel and tourism industry as part of the group. Today membership has increased to 102 countries.

In a follow up to initial plan, Dr Rifai was clear that as the world moves from the containment to the recovery phase, the whole economy was more important than our specific industry.

But travel & tourism are essential for employment and the economies of many countries worldwide said Dr Rifai, speaking from Amman, Jordan, to a virtual gathering of industry and government leaders from around the world.

Speaking second to the Taskforce, he offered his own four point roadmap for recovery.

First he said is making domestic tourism a priority. “It does not contribute to balance of trade or bring in foreign currency but it it keeps facilities open and maintains employment,” he said. It reflects his own philosophy that “we should encourage people to enjoy their country,” something he admitted had not always been the case and had sometimes caused conflict between visitors and local people.

Second he said was the need to concentrate on the digital sector. “The future of tourism is centred around technology,” said Dr Rafai. “This is a main pillar of the post-corona era.

“Everything is going to be from home and we must start thinking outside the box. I have attended weddings where the priest is on one line marrying people elsewhere.” 

Number three, he said, is training: “Our new post-corona era will be completely different. How we qualify our waiters – they will need trained to do packing for home delivery.” He said hotels will need to be more clean, training of staff to ensure the very best sanitisation will become a priority as destinations “compete with each other”.

Fourth, he said, every country must put money in the hands of people to encourage spending. “Spending is very, very important,” he said.

He urged destinations to prepare now for setting side certain areas that are corona free. “Destinations must start thinking about this: certain areas, certain hotels, certain beaches… that mean people are safe from minute the arrive until they return to their homes.”

And these protocols will need certification, he said. “You cant have any protocol if you don’t have certification. This is something you will need to see in the future.”



Qatar Airways has warned today (May 6) of “substantial” redundancies as it struggles with a collapse in demand.

Its chief executive Akbar Al Baker wrote to staff warning of the job losses, although the airline has not revealed the numbers.

Qatar Airways said it needed to “act decisively to protect the future of the business”.

Worldwide it employs 45,000 people and runs a fleet of 240 aircraft – described as one of ‘the world’s youngest airline fleets’.

“The truth is, we simply cannot sustain the current staff numbers and will need to make a substantial number of jobs redundant – inclusive of cabin crew,” Mr Al Baker wrote in an internal memo.

The state airline of the wealthy, gas-rich Gulf country was considered less vulnerable than many Europen and US airlines but today’s news indicates the depth of damage Covid 19 is causing to the sector.

Qatar Airways increased its stake in British Airways owner IAG to 25% as part of its strategy to invest in other carriers.

BA revealed this week it would cut 12,000 jobs from its 42,000 employees. See our story HERE

“The unparalleled impact on our industry has caused significant challenges for all airlines and we must act decisively to protect the future of our business,” a Qatar Airways spokesman said.

“As a result, Qatar Airways can confirm that the airline will make a number of roles redundant due to the impact of Covid-19.”

The International Air Transport Association (IATA), warned last month that air traffic in the Middle East and North Africa was forecast to fall by more than half.

IATA also warned that most airlines would struggle to make a profit if social distancing measures were introduced, such as keeping middle seats empty.

On Tuesday, Virgin Atlantic said it would be cutting 3,000 jobs and quitting its operations at Gatwick airport.



Dubai Expo 2020 delayed for 12 months amid cronavirus fears

Dubai Expo 2020 becomes Expo 2021 today after it was officially postponed for a year

World Expo 2020 in Dubai will be delayed by a year it was confirmed today (May 4), after weeks of speculation.The United Arab Emirates’ city has invested millions of dollars preparing for Expo 2020 with more than 100 hotels under construction.

Dubai was forecasting 25 million visits over the six months – 145,000 visits for every one of the 173 days the site is open. They expected 11 million visits by people living in the UAE and 14 million from overseas visitors.


The delay confirmation came today after a two-thirds majority of Bureau International des Expositions, BIE, Member States has already voted in favour of postponing until 2021.

The event will now run from 1 October 2021 to 31 March 2022, a delay that “allows all participants to safely navigate the impact of COVID-19”. It also allows the World Expo to focus on a collective desire for new thinking to identify solutions to some of the greatest challenges of our time, said a report from the UAE state news agency WAM this morning.

H.H. Sheikh Ahmed bin Saeed Al Maktoum, Chairman of Dubai Airports, President of the Dubai Civil Aviation Authority, Chairman and CEO of Emirates Group, and Chairman of the Expo 2020 Dubai Higher Committee, said: “We welcome the decision of BIE Member States to support the delay of Expo 2020 Dubai by one year. We are thankful to Member States for their continued commitment to contributing to a World Expo in Dubai that will play a pivotal role in shaping our post-pandemic world at a time when it will be most needed.

“We have sought to build over the last 50 years bridges, connections, and partnerships around the world because we believe in genuine collaboration to safeguard the future of all. This swift and overwhelming vote reflects the strength of our international partnerships and truly reflects the positive role the UAE and Dubai play with all countries around the world.

“This affirmation by the international community of Dubai’s offering and its ability to deliver, further strengthens our commitment to matching ambition with achievement to hosting an event that will capture the world’s imagination, when the time is right.”

With a BIE General Assembly impossible to stage due to COVID-19 restrictions, Member States voted remotely on the BIE Executive Committee’s recommendation for a delay as proposed by the UAE Government at the beginning of April and recommended by the BIE Executive Committee on 21 April. While the vote remains open until 29 May, the two-thirds threshold was surpassed within a week of voting opening on 24 April.

Dimitri S. Kerkentzes, Secretary General of the BIE, said: “I applaud the swift response by BIE Member States. Their support for the postponement of Expo 2020 Dubai – which will be formally approved on 29 May – is a renewed sign of solidarity and demonstrates the shared will to work together in ‘creating the future’.”

“In their support for the one-year postponement of Expo 2020 Dubai, Member States of the BIE are giving the world the opportunity to reconvene in 2021, when together, we can address the challenges facing humanity and celebrate the unity and solidarity that strengthen us. With its theme ‘Connecting Minds, Creating the Future’, Expo 2020 Dubai will offer the world a unique platform to share the lessons, solutions and ideas for a better tomorrow.”

Expo 2020 Dubai retains its name and remains committed to hosting an exceptional event that will celebrate humanity’s resilience, creativity, culture and innovation – including major technological advances in the fields of medicine and science.

The first World Expo to be held in the Middle East, Africa and South Asia region, and largest ever event to take place in the Arab world, Expo 2020 will welcome 192 countries, plus businesses, multilateral organisations and educational establishments.



BA reveals plan to cut 12,000 jobs

One of the world’s biggest airlines BA revealed plans to axe up to 12,000 of its staff because of the global collapse in air travel in the face of the coronavirus pandemic.

The privately owned UK operator’s plan is understood to include a quarter of its pilots as the company reacts to the severe downturn in flights.

The airline’s chief executive, Alex Cruz, told BA’s 42,000 staff on Tuesday night that the company “must act decisively now to ensure that British Airways has a strong future” and that means more than one in four jobs must be cut.

Cruz said the UK’s flag carrier airline, which has placed 22,600 people on the government’s furlough scheme, “cannot expect the taxpayer to offset salaries indefinitely”.

“Yesterday, British Airways flew just a handful of aircraft out of Heathrow. On a normal day we would fly more than 300. What we are facing as an airline, like so many other businesses up and down the country, is that there is no ‘normal’ any longer,” Cruz told staff in a letter

“We are a strong, well-managed business that has faced into, and overcome, many crises in our hundred-year history. We must overcome this crisis ourselves, too.”



Poland government allows hotels to begin operating again next week

Polish hotels will reopen on May 4 along with the country’s shopping malls becoming the second European country to relax hospitality restrictions. 

Prime Minister Mateusz Morawiecki said on Wednesday, part of efforts to ease restrictions imposed to curb the spread of the new coronavirus (continues below picture)

Hotel Polonia, Warsaw, Poland (file picture) CC BY-SA 3.0, Link

Polonia Palace Hotel fasada.jpg

The country of 39 million people implemented lockdown restrictions a month ago and 644 people have died from Covid-19, one of the lowest rates in Europe. 

Austria had annouced this week that hotels and larger shops can reopen in mid-May as part of its continued lifting of restrictions.

Poland, the largest economy in the European Union’s eastern wing, started relaxing some of its curbs on public life earlier in April, alongside other countries keen to prop up industry damaged by the pandemic.

Morawiecki also reaffirmed the government’s plan to hold a presidential election as scheduled on May 10, despite calls from opposition parties and others for a much longer delay. They fear the relaxtion will lead to a second wave of infections

Further steps to unfreeze the economy, including a reopening of restaurants, will be announced at a later date, Morawiecki said. Poles are still required to wear masks in public and schools will remain closed until May 24.

The restrictions caused huge problems for the thousands of Polish workers who crossed the border into Germany to work each day as the border was closed.