Per diem rates up as GCC budget surplus fuels massive infrastructure projects – puts executives back in the air, says organiser of GIBTM.
High oil prices, a growing non-oil economy and major investment in transport and power infrastructure projects are driving business travel in the Gulf region once again.
“According to analysis by the Emirates Centre for Strategic Studies and Research, GCC budgets doubled in 2011 producing a $106.7 billion budget surplus, and that was after a 19.3% increase in public spending over the previous year,” said Lois Hall, Exhibition Manager, for GIBTM, the leading platform for the incentive, business travel and meetings industry in the Middle East, which takes place at the Abu Dhabi National Exhibition Centre (ADNEC) on 25-27 March 2013.
“Clearly money is available to fund these and future infrastructure projects, driving the non-oil economy, which is now generating around 14% of total GCC revenues and helping to diversify its economies,” added Hall.
One such non-oil economic sector that is clearly benefiting from increased commercial activity is aviation and hospitality, particularly from corporate travelers, keen to tap into region’s business markets as business opportunities in some of the more mature economies dry-up.
Now in its seventh year, the Gulf Incentive, Business Travel and Meetings Exhibition (GIBTM) attracts in excess of 2,400 industry professionals each year. New for the 2013 edition, and in response to increasing demand for business travel services in the region, GIBTM has launched its first dedicated Business Travel Pavilion.
The show also hosts 300 regional and international senior level buyers with a combined budget of over $827 million, who through 7,600 pre-scheduled appointments over the two and a half-day exhibition, meet with more than 350 exhibitors from 36 different countries.
“If there is one unique aspect of GIBTM it would have to be the quality Hosted Buyer Programme,” said Hall.
Hosted Buyers are international elite organisers, influencers or budgetary decision makers from major corporate, association or agency organizations. After clearing a qualification process, Hosted Buyers receive complimentary benefits such as air travel, accommodation and a full diary of appointments.
“The Hosted Buyer pre-scheduled appointment system, brings exhibitors face to face with three essential ingredients – money, authority and need, it is highly efficient and cuts through the clutter,” added Hall.
In the recent IBTM Global Research Study, the top ten destinations where Hosted Buyer’s plan to place business for next year are UAE, France, Germany, Qatar, Italy, Switzerland, Spain, Morocco, Oman, and Czech Republic. Middle Eastern buyers indicated that India, Thailand, Malaysia, Africa, Turkey, Sri Lanka, Bangladesh, Maldives, France, Japan and the UK were most sought after.
“Analysis of hotel rates and occupancies, aircraft passenger loads, airport arrivals et al throughout the region have been well documented, but another statistic which supports the notion that the demand for business travel is growing steadily is the increase in the ‘per diem’ rates,” commented Hall.
Per diem rates are amounts agreed for executives travelling on business, mainly for hotel accommodation and meals. Any increase in this amount, indicates higher hotel rates and or increased cost of meals as business demand picks-up. According to BCD Travel Consultancy Advito, hotel rates for business travelers in the Middle East will increase 6% – 7% this year. Saudi Arabia predicted 2012 increases of 13 – 15% with cities such as Dubai and Doha, witnessing modest rises due to the influx of new hotel room stock. Muscat remained the most expensive city in the Middle East in 2011 with a per diem of $493, up 4.6% from a year earlier.
Although hotel rates were flat, food costs jumped 14%. Riyadh was in second place with a per diem of $479, up 5.8% year-on-year, this time it was hotel rates that rose 10.6%.
Other regional cities included in the index were Doha, with a per diem of $457 up 1.3% and Kuwait City which recorded a per diem of $427 up 2.9%. The per diem for Dubai was $422, an increase of 4.1% and finally Abu Dhabi with a per diem of $387 down 3.1%.
Photo caption: Lois Hall, GIBTM Exhibition Manager – Reed Travel Exhibitions.
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.
She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
