UAE's leisure travelling outlook brightens on vaccine roll-out, Mashreq Bank says

The UAE's rapid Covid-19 vaccine campaign and the government's tourism-stimulating initiatives include brightened the outlook for leisure travel, according to Mashreq Bank.

A recovery in business travel will lag behind leisure excursions in the short-to-moderate term, the lending company said in a written report titled The way forward for tourism and hospitality in the UAE.

“While resort occupancy in the UAE will slowly but surely recover on the trunk of increased domestic tourism and the come back of international travellers, organization travel will not go back to pre-pandemic levels later on,” Zain Qureshi, managing director and global brain of real estate finance and advisory at Mashreq Lender, said.

The report's findings are consistent with global forecasts for the recovery of different travel segments. The come back of leisure travellers is certainly driving airlines’ site visitors revival in the Europe, Middle East and Africa (EMEA) location, although a complete recovery is still 3 years away and depends on a come back of business and long-haul travellers, according to a June 2 statement by Fitch Ratings. Low-expense carriers are set to benefit the virtually all while network airlines with bigger contact with long-haul travel will find it harder to recover traffic, it said.

In the UAE, it is important for the tourism sector to take a phased and coordinated method of rebuilding traveller trust as consumer sentiment remains to be wary, according to Mashreq Bank.

"For hospitality and tourism businesses to successfully recreate their customers, reaching and maintaining operational agility will be critical found in this evolving circumstances," the report said.

In response to the unpredictable situation, food and beverage outlets can successfully manage stock and avoid food waste by limiting buys, businesses and malls can decrease the number of workers and/or work with them on a contractual basis, while hotels can turn off facilities like meeting bedrooms that are not used currently, it said.

“It is about maintaining your staff and functions as lean while possible until points stabilise,” Mr Qureshi said, advising businesses to come to be flexible in the way they allocate their costs to make sure greater financial security.

Hospitality and tourism businesses routinely have fixed costs - rents, salaries, maintenance - with long-term contracts in place.

“Budgeting in a manner that gives them even more versatility and with shorter contracts as high as three months at most might give them the chance to rebalance issues," the Mashreq Lender executive said.

Rebuilding consumer confidence will be key for the gain of tourists and resort guests. Hospitality and tourism businesses must apply and demonstrate stringent basic safety and hygiene methods at their premises, the record said.

“It really is essentially about bettering sentiment, and making buyers feel safe, not only in principle but visibly, too,” Mr Qureshi said. “Marketing safe procedures at the onset is important, however the business must genuinely show the customer that they are practicing what they preach.”

This could range between adding divider shields in dining areas to sealing off rooms after they’ve been sanitised.

Mr Qureshi also recommended increased utilization of contact tracing mobile applications for both people and tourists, citing good examples from South Korea where a QR code-based access log program has been enforced for “risky businesses” such as sports conveniences, nightclubs, buffet eating places and large private universities.

“It would substantially improve traveller sentiment, even while providing persons with ‘red alerts’ about infectious hubs,” he said.

With Dubai announcing free vaccinations for all Expo 2020 individuals and their staff when the exhibition starts in October, Mr Qureshi recommended extending that option to long-term visit visa holders (three to half a year).

“As one of the first mega-events to occur since the pandemic began, Expo 2020 could serve as a research study for just how forward,” he said. “Covid-19 and its own variant forms will probably stay on later on, and the UAE seriously has a chance to create the benchmark with this global event.”