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IHG shares key drivers of demand in Middle East

IHG shares key drivers of demand in Middle East InterContinental Dubai Marina development

Changing demographics, a strong and growing aviation sector, and religious tourism are key demand drivers across the Middle East and India for IHG, the world’s largest hotel group by number of rooms.

Jan Smits, IHG’s Chief Executive Officer for Asia, Middle East and Africa, said: “The Middle East is and has been an important market for us ever since we opened our first hotel in the region more than 50 years ago. While that may seem like a long time, the Middle East still has the characteristics of an emerging market.

“It is dynamic, rapidly evolving, and has a great deal of potential. That’s why we recently took a strategic decision to shift the management of our Middle East business from its original grouping with the established markets in Europe to the dynamic emerging economies in Asia,” she added.

The group continues to see growth across the region with a development pipeline of 110 hotels in India, Middle East and Africa due to open in the next three to five years This includes some key signings this year such as the InterContinental Dubai Marina, Crowne Plaza Resort Ras Al Khaimah, Hotel Indigo Riyadh King Abdullah Financial District and InterContinental Riyadh King Abdullah Financial District. 

With the opening of these hotels IHG expects to create more than 24,000 new jobs across Saudi Arabia, UAE and India alone.


“We can draw some parallels between Saudi Arabia and India. Both have large populations and both are seeing a boom in domestic tourism driven by an ever widening middle class. And both are very high on our agenda, but of course there are distinct differences.

“In the UAE, the continued development of the aviation sector and the country’s stable political climate and growing economy is driving both business and leisure tourism. UAE airports welcomed more than 70 million passengers last year and of course these people all need somewhere to stay.” 

Travel and tourism currently represents 13.5% of the UAE’s total GDP, and this is expected to increase by 4.3% per year until 2022*. With this in mind several Emirates in the UAE are positioning themselves as tourism destinations, each with a different approach to appeal to a particular market segment. IHG currently has 18 open hotels and another six in the pipeline in the UAE, including the InterContinental Dubai Marina and the first Crowne Plaza Resort in the UAE in Ras Al Khaimah.

With 22 hotels open, a total of 5,100 rooms, IHG is the largest international hotel company in Saudi Arabia. Demand is driven by a mix of business, religious and domestic tourism, and the government is focused on increasing tourism capacity to allow up to 88 million visitors in 2020. The tourism sector currently accounts for 5.4% of GDP*.

In India, a country with a population of more than 1.2 billion, the value of the travel and tourism industry is expected to increase by 7.8 per cent per annum until 2020*. With 12 hotels open and 37 in the pipeline, this is a key growth market for IHG.

“For us, each market is unique with its own specific profile. It’s a race where each country is gearing up and gaining speed, but each is on its own track,” concludes Jan Smits.