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Robust Hotel Development in Dubai and Abu Dhabi Creates
Challenges in Terms of Recruitment, Training and Retention



 

by Erin O'Neill and Jitendra Jain
Founders, www.hotelieridol.com
June 2008

Hotelier Idol Exposé: The hidden hotel industry casting crisis takes centre-stage!

Hotelier Idol points the spotlight at the robust hotel development pipeline and the underlying challenges presented in terms of recruitment, training and retention.

Case Study: The United Arab Emirates, specifically Dubai and Abu Dhabi 

If one was to look at the global inventory in the pipelines and view it as a “city state” Dubai has officially the largest Construction Pipeline of any other Metropolitan area in the entire world, even greater than Las Vegas, New York, Washington, London, Shanghai or Beijing! 

Described as the ‘most vibrant and fastest developing destination in the world’ Dubai in the not so distant future shall officially be the largest hospitality playground in the world. Currently experiencing over 6 million tourists annually, Dubai’s long term strategy is to become the ‘Destination Brand’ with its estimated growth to 15 million by the year 2015. In our eyes there is only one word that best describes this…. ‘Surreal’. 

Hoteliers currently struggle to stay informed as new hotels open daily and experience the ‘normal’ 95% and above occupancy levels before many of us have even realized the buildings are complete. We are all too familiar with the tales from many of these that are even opened before this completion stage is reached. That is an entirely different story! 

For hotel experts the word on the street at the most recent Hot Hotelier’s Networking event in Dubai was about the soon to open Atlantis hotel on Palm Jumeirah; an astounding 1539 hotel rooms. Truth be told this is no big fish in the sea when one compares it to the Bawadi development, a soon to be home to an astounding 29,200 rooms. Now that is what one considers as truly staggering! This comprises of an additional 31 hotels to the Emirate over the next eight years, nearly doubling the current number of hotel rooms in Dubai. The centerpiece of the development will be the world's largest hotel, Asia-Asia, which alone will provide 6,500 rooms, combining 5,100 four star and an additional 1,400 five star rooms. 

So how does the Atlantis’ Director Of Fish Operations and his school of 27 dolphins plan to tackle this shark?! According to Saeed Al Muntafiq, CEO of Tatweer who is one of the main investors in this AED 100 Billion Dubailand Monster, the launch of the project effectively signals the next major phase in tourism development in Dubai and the expected growth in the next eight years. Dubailand is expecting 3.3 million visitors by the year 2016. Let’s do the math? That means just over 21% of the total number of tourists that Dubai expects to host by that time are destined for this monstrous playground. Simplifying that further, 1 in every 5 people visiting Dubai shall be headed for what is expected to be the world’s the most exciting entertainment and leisure hubs – Dubailand. It will occupy a full 20 kilometers, hosting the largest concentration of leading hotels anywhere in the world. Now that is some interesting math! Did you know that 40% of the world’s construction cranes are currently sitting in Dubai? 

There is also room in the playground for the corporate nerds and business traveler! The Bawadi project shall also act as a strong catalyst to stimulate tourism growth and also for related sectors such as MICE (Meetings, Incentive Travel, Conventions and Exhibitions). Inevitably an attractive place to ‘live, work and play’. Just think in time we could see the Global CEO Forum and Conferences of such statue being held in RESTLESS PLANET: The Dinosaur-themed Park featuring more than 100 animatronic dinosaur replicas in a lifelike environment, recreating the sights and sounds of 1 million B.C. I am sure this experience could teach these old dinosaurs a few tricks! 

So now we hear you asking yourself who is going to feed, water and bed these dinosaurs in this playground? No doubt you regularly hear the terminology that the success of a hotel is due to ‘location, location, location.’ A recent General Manager’s survey performed by Chris Jackson in Hotelier Middle East tells us that on the contrary the GM’s minds are ringing home something a little different…… ‘People, people, people’. 53% of the GM’s questioned during this study highlighted that “labour issues” were their greatest challenges. Increased competition was a key issue for them… not surprising with 155,989 rooms spread over 527 announced and signed projects in the pipeline in the Middle East region alone. Astounding! According to its quarterly Construction Pipeline Report for the Middle East, Lodging Econometrics claims that Dubai accounts for 31% of all of the projects and 39% of all rooms in the Total Middle East Pipeline. 

Jackson’s research also stated that most general managers were clear about the most enjoyable aspect of their work: the people. One five star GM said “It’s all about the people, welcoming and entertaining guests, coaching and leading my department heads”. If so then why did 54% of the GM’s think the pay rates at their respective hotels were not generous? Retaining key talent is inevitable in the current market place. Labour shortages are anticipated to remain at the top of the 3 key issues facing the industry, with more than 40% pointing to rising inflation rates and the rising cost of living – the associated costs of attracting and retaining key staff talent. 

Shall these ‘not so generous’ pay rates be cause for hoteliers to move from Dubai to clear leaders tipped as the ‘hot’ markets of the future: Abu Dhabi, Qatar and further afield? 

Abu Dhabi has embarked on its own development program in efforts to establish itself as The Cultural & Educational Hub of the Middle East. It has the second largest Pipeline in the region with 73 projects adding an additional 21,809 rooms to their inventory. Aside from bedrooms they are again home to some world class projects such as a Formula One racetrack, a Ferrari World Theme Park! So do we hoteliers opt for the Dinosaurs or the Ferrari’s? 

Further afield, in Asia Pacific, Dubai’s development is only a cog in the wheel on the global scale of things. According to the predictions from Global Hotel Real Estate Company Lodging Econometrics there are 1.7 million rooms expected to come into the global inventory. Middle East alone stands responsible for 150,000 keys of that development while Asia Pacific is set to contribute over 495,000 keys - 2218 properties. Now that is what we call ‘phenomenal’. Almost as phenomenal as the Skilled Labour Shortages that are on the Horizon!

Back to the topic at hand...the recruitment, training and retention crisis on the horizon in the hotel industry. We're all set for a record development pipeline and unprecedented growth. But hotels and hospitality have always been about the people and the 'human touch'. That touch requires skilled, well trained, well motivated and forward-looking staff. 

So just what are the questions plaguing owners and managers alike in the hotel industry now and in times to come?

  • Great hotels aside...who's going to run them? With 'traditional' labour markets coming into their own, where will we hire skilled staff from? ...or forget the skills, where do we find these bodies!! 
  • Will the people we hire be able to meet the ever-increasing service standards expected by our guests? Or shall they be employed based on the sole criteria of 'two hands, two feet and a pulse...''? How will we train these bodies...or will hospitality robots be the future? 
  • Will my great employees stick around after all that time and money spent on training & developing them (or the absence of it)? Will they walk out the door to the next big property that pays just a little more? How will we retain any talent we discover and nurture? 
We may not have all the solutions at hand, and it won't be an easy battle by any means. But well prepared is well armed. Savvy hotel industry leaders are beginning to walk the talk and dig in for the war to come. 

Hotelier Idol was created to drive awareness about the training, recruitment and retention crisis in the hotel and service industry. While this is presented in a fun, entertaining style (which we hope can rekindle the passion and showmanship so essential for true hospitality), our underlying aim is to facilitate solutions through creating support, discussion and learning platforms like YoungHotelier.com and the Hot Hoteliers Networking Group. Life, after all, is not a dress rehearsal - every day is opening night. So remember to enjoy the journey!

Watch the Season 1 Trailer and auditions, as our hapless candidates battle it out for the position of Hotel General Manager! Visit hotelieridol.com for the videos, to vote on who YOU think makes the ‘cut’, discuss the problems and possible solutions.

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Contact:

 Jitendra Jain (JJ)
E-Commerce Manager - Mina Seyahi Complex
Le Meridien Mina Seyahi Beach Resort & Marina
The Westin Dubai Mina Seyahi Beach Resort & Marina
 jj@thetalentjungle.com

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Also See: Hotel eMarketing and Internet ‘e’volution – Creating an Online Culture at Hotels / Jitendra Jain / March 2008
Internet Marketing and Distribution Trends Impacting the Hospitality Industry from 2007-2010/ Max Starkov and Jason Price / June 2007
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