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Auditing in Hospitality & Healthcare Sector

Growth of Hospitality Sector

The UAE hospitality market is expected to reach $7.6 billion by 2022 at a five-year CAGR of 8.5 per cent (2017-2022) and international tourist visits are expected to grow at a five-year CAGR of 4.3 per cent to 25.5 million whereas the hotel supply is expected to grow at a five-year CAGR of 6 per cent to 183,718 hotel rooms, shows Alpen Capital’s latest report on GCC Hospitality Industry 2018.

“We are in an era of a shared economy. The change will require a new strategic approach, one which can enable hotels to understand market trends and build the internal capabilities required to succeed in a new landscape. The more the products and services are tailored to offer local experiences and value for money, the better conversion can be expected. There is a strong need to build on experiential travel and hospitality today.”

The average daily rate is expected to grow at a five-year compound annual growth rate (CAGR) of 1.3 per cent to $149 until 2022, whereas revenue per available room is expected to grow at a five-year CAGR of 2.1 per cent to $116 by 2022.

Dubai is expected to witness 20 million international tourist arrivals by 2020 and its hotel supply is expected to reach 132,000 by 2019, which also includes the mid-market hotel segment which targets budget travellers.

GCC hospitality is expected to witness increased market penetration by the mid-market hotel segment through 2022. In addition, the industry is expected to also see increased adoption of Airbnb-type renting models. Regional players such as Emaar Hospitality, Rotana, CityMax Hotels and Habtoor Hotels are building room inventories and increasing their construction pipelines at a substantial rate.

“The GCC hospitality industry, which has been under pressure in recent years is expected to gain positive momentum on account of the recovery in oil prices, upcoming mega events, increased tourist inflow, positive regulatory initiatives and increased government spending/investments towards the hospitality and tourism sector. GCC countries have well-defined strategies to develop themselves as preferred travel destinations. They are making significant investments into the development of tourism and hospitality infrastructure, including airport expansions to increase the handling capacity of anticipated visitor inflow,” said Sameena Ahmad, managing director at Alpen Capital.

The GCC hospitality market is expected to grow at a 7.2 per cent CAGR from an estimated $22.9 billion in 2017 to $32.5 billion in 2022. Upcoming mega events and government initiatives to boost tourism are the primary drivers behind this growth. Growth in hospitality sector revenue of individual GCC countries is expected to range from 6 per cent to 12 per cent. The UAE is expected to witness high revenue growth on account of significant investment activities in the tourism and hospitality sector for the upcoming Expo 2020 Dubai.

Growth of Hospitality Sector in UAE

The UAE’s healthcare industry has continued to evolve over the past few years, and today offers a range of new specialised services and treatments for residents, experts at Arab Health 2018 noted.

Healthcare is one of the fastest-growing sectors in the world and is a key contributor to the UAE economy. Alpen Capital Consulting Services said that the UAE’s healthcare market is expected to reach Dh71.5 billion in 2020 at an average annual growth rate of 12.7 per cent from 2015. The UAE is also world’s fastest growing medical tourism hub, with total health expenditure allocation jumping from the current $23 billion to $28 billion by 2021.

Importance of Audit & Accounting in Hospitality & Hospital Sector

Where money and resources were being thrown out it all directions without knowing how much was spent, how much was left, or even where it went to. This wouldn’t be very sustainable, not to mention comfortable.

Now imagine if this was in a hotel environment; how could you even accommodate guests? Hotel staff wouldn’t get their salaries, guests wouldn’t get what they paid for, no improvements would take place, and money would just disappear. That doesn’t sound too good, does it?

This is where proper hotel management accounting comes in. But before we delve into what accounting can do for hotel management, let us first understand what hotel accountants do.

Key responsibilities include:
  • Producing an accurate set of month-end accounts
  • Comparing profit to previous periods and forecasts
  • Preparing budgets and business planning
  • Financial statement and balance sheet production
  • Cash flow statements
  • Payroll control

Where money and resources were being thrown out it all directions without knowing how much was spent, how much was left, or even where it went to. This wouldn’t be very sustainable, not to mention comfortable.

Now imagine if this was in a hotel environment; how could you even accommodate guests? Hotel staff wouldn’t get their salaries, guests wouldn’t get what they paid for, no improvements would take place, and money would just disappear. That doesn’t sound too good, does it?

This is where proper hotel management accounting comes in. But before we delve into what accounting can do for hotel management, let us first understand what hotel accountants do.

Get in touch

Get in touch to find out how ALYA’s team of specialists in auditing & accounting for the hospitality &  health care sector can help your business to grow and succeed in UAE.

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