Oil hits highest since mid-2015 as OPEC sticks to supply deal

Oil prices have gained 7 percent in October, marking the fourth consecutive month of gains. (Reuters)
Updated 01 November 2017
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Oil hits highest since mid-2015 as OPEC sticks to supply deal

LONDON: Oil rose to its highest since mid-2015 on Wednesday as data showed OPEC has significantly improved compliance with its pledged supply cuts and Russia is also widely expected to keep to the deal.
Brent crude futures were up 55 cents at $61.49 per barrel at 1210 GMT, having hit a session peak of $61.70 earlier, the highest since July 2015.
US West Texas Intermediate (WTI) crude was up 56 cents on the day at $54.94 a barrel.
The oil price gained 7 percent in October, marking the fourth consecutive month of gains.
“The bulls have it and momentum is strong,” Saxo Bank senior manager Ole Hansen said.
“We know how oil can easily run ahead of what is fundamentally justified and we’ve seen that in both directions in the last couple of years,” he said. “We really need to see demand growth pick up even more strongly than what is currently expected for the bullish outlook for to be maintained.”
Optimism has been fueled by an effort this year lead by the Organization of the Petroleum Exporting Countries, Russia and other producers to hold back about 1.8 million barrels per day (bpd) in oil production to tighten markets.
OPEC’s October output fell by 80,000 bpd to 32.78 million bpd, putting adherence to its pledged supply curbs at 92 percent, up from September’s 86 percent.
Analysts and traders expect Russia to stick to its agreement to curb its oil output by 300,000 bpd from 11.247 million bpd reached in October 2016.
Saudi Arabia and Russia are considering extending the agreement to potentially cover all of next year.
Should participants after that return to full capacity and US output also grow, a supply glut could return.
“We could rapidly ... go from a predicted deficit of around 260,000 barrels to a surplus of close to 1.5 million barrels. Prices would undoubtedly collapse,” said Matt Stanley, a fuel broker at Freight Investor Services.
Another factor will be US output, which has risen by almost 13 percent since mid-2016 to 9.5 million bpd.
“US crude oil production is 410,000 bpd below the April 2015 peak of 9.62 million bpd. We expect production to surpass this level before year-end,” Barclays bank said.


Industry heavyweights focus on talent acquisition, retention

Updated 24 September 2023
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Industry heavyweights focus on talent acquisition, retention

RIYADH: Talent acquisition, retention, and mentoring will be in the spotlight at the upcoming hospitality summit in the UAE as industry heavyweights gather to discuss the significance of investing in human resources and incorporate the concepts of environmental, social, and governance in the recruitment process.

The Future Hospitality Summit scheduled to be held on Sept. 25-27 at Hilton Yas Island in Abu Dhabi under the theme “Focus on Investment” will focus on the importance of prioritizing human capital investment, addressing talent shortage, recruiting, and retaining suitable workforce.

According to Mariam Al-Musharrekh, executive director of human resources at Miral — the summit’s host sponsor — recruitment retention, and development of talent are essential to meeting the increasing demand for sustainable, digitalized, and hyper-personalized guest experiences in the leisure, entertainment, and tourism industry.

“A heightened focus on attracting and retaining top talent, while cultivating and investing in their long-term growth and ensuring they have the best possible start to their careers will remain paramount for the growth of the industry,” Al-Musharrekh said.

“An organization’s workforce must be empowered to contribute meaningfully to sustainable practices by cultivating a culture of ethical governance, community engagement, and continuous learning,” she added.

Hospitality leaders will offer their perspectives on key aspects such as workforce skills, finding and keeping talent, and attracting Emirati and Saudi nationals in the hospitality sector.

As guest preferences continue to evolve and technology becomes more prominent in the hospitality industry, it’s essential to ensure that workforce skills stay current.

“The hospitality sector has gone through a revolution over the past few years through the integration of digital ecosystems within its operations. Following this revolution, recruitment, retention, and development remain a focal point for success within the industry, as hospitality professionals are key to driving hyper-personalized experiences,” Al-Musharrekh added.

“It requires passionate individuals who understand the delicate balance between technology and hospitality, and by dedicating more of our time and budgets toward mentorship programs, cross-training, and tailored development paths,” Dimitris Manikis, president of Wyndham Hotels and Resort in Europe and MEA, said in a statement.

Manikis said that increased investment is required in the recruitment and retention of individuals with the right qualifications and adaptability to meet the changing demands of the sector.

It involves supporting the upcoming generation and commencing from the foundational level. This entails collaborating with educational institutions such as schools and universities to establish internship initiatives that enable young talents to learn insights from industry experts and prepare for the future.

Paul Griep, director of Industry and Alumni Relations at Hotelschool The Hague, said: “I believe both education as well as the industry can make a true competitive difference by assessing which aspects of the hospitality journey can be resolved by technology and which aspects will need a more ‘human’ touch.” 

The Middle East, particularly Saudi Arabia, is making record-level investments in the tourism and hospitality sector. It is estimated that by 2026, there will be a demand for nearly 100,000 well-trained hospitality experts.

“Over the last few years, we have seen notable transformations in recruitment and retention practices, with the shift attributed to various factors including technological advancements and changing market dynamics,” Al-Musharrekh commented.

She also added that recruitment has become more focused and personalized as a result of the use of data-driven methodologies, assisting in the discovery of more suitable individuals

Sunil John, president of ASDA’A Burson Cohn & Wolfe in the Middle East and North Africa, said that the hospitality sector has emerged as one of the top areas for creating new jobs, especially for the youth but added: “To attract regional talent, the hospitality sector must underline the growth opportunities it provides.”

“Typically, in the region, the hospitality sector has been dominated by expatriate professionals — and there is an urgent need to nurture and build robust career choices for nationals,” John continued.

Griep added that the industry has a chance to do this “right” this time, viewing the demand for 100,000 skilled professionals as both the most significant challenge and the “greatest” opportunity.

However, he said that “this may not be the most sustainable and/or ethical which will be accepted at a lesser extent by newer generations.”

“Saudi Arabia can be the ‘lab’ where an array of new techniques, approaches to talent, and recruitment can be tested in action,” Manikis said.

Attracting and retaining talent in the hospitality industry requires a holistic approach that addresses compensation, work-life balance, career development, workplace culture, and societal responsibility.

Jeroen Greven, the managing director of the Emirates Academy of Hospitality Management, explained different approaches to attracting and retaining talents.

He said it is important to showcase “the unique opportunities and experiences” that the Middle East has to offer to attract potential candidates. Another approach, he added, is to increase collaboration with educational institutions to provide specialized hospitality programs.

Greven also added: “As the industry expands, a strategic mix of appealing incentives and employee-centric policies will remain central to securing and nurturing a skilled workforce.”

“Our approach to nurturing Arab youth talent involves forging partnerships with educational institutions, continuing to offer internships and mentorship programs, and remaining committed to creating an environment where young local talents can flourish and contribute meaningfully to the industry,” Manikis commented.

Moreover, ensuring the development of talent in a responsible ESG-driven environment is also important to ensure sustainable growth of the industry. Greven added: “Start by incorporating sustainability modules into training programs to raise awareness and foster a culture of responsible practices through continuous education on environmental and social issues.”

This can also be done by implementing mentorship programs where seasoned professionals guide talent in ESG considerations.

In May, the summit was held in Riyadh under the theme “Invest in Change,” as it emphasized the importance of the positive change that can be brought about by investing in time, intellect, and experience to keep up with the changing times and trends.

The summit focused on creating job opportunities for young Saudis by fostering the development of a skilled and talented workforce for the hospitality sector.


Sustainability tops agenda as summit set to begin in Abu Dhabi

Updated 24 September 2023
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Sustainability tops agenda as summit set to begin in Abu Dhabi

RIYADH: Principles related to environmental, social, and governance are top of the agenda as top names in the hospitality sector meet in Abu Dhabi for the Future Hospitality Summit on Sept. 26.

From increased calls on climate action in the tourism and hospitality sector to Dubai hosting the COP28 this winter, most of the discussions at this year’s event are expected to be centered around measures to reduce the industry’s carbon footprint.

According to the World Travel and Tourism Council, the sector contributes up to 11 percent of the total emissions in the world, and this figure is predicted to double by 2050.

With this in mind, industry leaders and most of the key players in the sector have already taken measures to ensure a greener future

Sustainability factor

Haitham Mattar, managing director of India, Middle East and Africa at IHG Hotels and Resorts, believes the tourism and hospitality sectors play a pivotal role in working toward a sustainable future.

“At IHG, we embrace our responsibility and opportunity to make a positive difference and (are) helping to shape the future of responsible travel,” said Mattar.

He added: “We are determined to contribute toward positive social and economic change, to stand up for key issues such as diversity, equity and inclusion, and human rights, and to make more responsible environmental choices.”

Mattar said IHG is working toward reducing carbon emissions, along with eliminating single-use items and moving to reusable and recyclable alternatives, as well as reducing the food waste from its hotel chain.

Jonathan Brown, chief portfolio officer of Miral Group, the host sponsor of FHS, believes the path to sustainability across the UAE’s leisure, entertainment, and tourism industry has been emboldened by a national strategy accentuating clean energy sources together with net-zero objectives.

Brown said: “Our ambition to accelerate the realization of the Emirate’s tourism growth and contribute to the industry’s ecosystem underpinned by a commitment to creating value for our customers, partners, and society, and positively impacting the communities in which we operate.”

He added: “Ultimately, the key to balancing growth with sustainable development lies in collective action, strategic partnerships, and long-standing investments.”

Richard Williamson, chief operating officer of Considerate Group, said the interest and investments surrounding ESG principles in the hospitality sector have picked up pace in recent years, and are a significant part of the agenda at events such as FHS.

“In 2023, we more often find a chief sustainability officer owning the agenda, with a dedicated ESG budget. Our role has evolved so that we now habitually provide advice and support to the CSO,” said Williamson.

He added: “This reflects the change in ESG engagement moving from a warm, slightly ‘wooly’ industry, to a more quantitative, data-led stage.”

Williamson believes the ESG evolution in the hospitality sector is being driven by four crucial factors: tightening regulations, stakeholder reporting requirements, asset-level carbon footprint analysis, and climate risk and resilience.

Fahad Abdulrahim Kazim, CEO of Millennium Hotels & Resorts, echoed those views and noted the hospitality industry’s investment in ESG and sustainability is becoming increasingly robust and essential.

“We are witnessing a significant shift as more hotels and resorts recognize the long-term benefits of incorporating environmental, social, and governance considerations into their business strategies,” said Kazim.

The executive added that industry leaders in the hospitality sector are steadily adopting energy efficient technologies, waste reduction initiatives, community engagement programs, and responsible sourcing practices.

“As consumer preferences align more with sustainable choices, the hospitality sector’s commitment to ESG is not just a trend but a necessary path to secure a greener and more resilient future,” Kazim noted.

Millennium Hotels & Resorts aims to reduce environmental impact through sustainable practices, including a reduction in single-use plastics, Kazim added.

“We seek to establish and nurture long-term relationships with residents and organizations by supporting local small and medium-sized enterprises. At Millennium Hotels & Resorts, we remain dedicated to leading this charge and setting a strong example for sustainable hospitality practices,” he said.

Kazim further pointed out that the biggest priority in the hospitality sector is striking the right balance between exceptional guest experiences and minimizing the environmental footprint.

Radisson Hotel Group’s Vice President of Business Development Elie Milky noted that the hospitality sector is witnessing a paradigm shift from sustainability being a “nice-to-have” to a fundamental core value.

“Investments in ESG reflect our ethical responsibilities and become vital for business resilience and long-term success,” said Milky.

He added: “As an industry that primarily revolves around physical locations, buildings, and transportation, we have a significant role in driving forward green building practices, efficient energy consumption, and sustainable transportation solutions for our guests.”

Paul Stevens, chief operating officer of the premium, midscale and economy division for Middle East, Africa and Turkiye at Accor, said the company has been a pioneer in bringing sustainable development to the hospitality industry for more than 30 years.

 “We drive transformation by collaborating closely with our hotel owners, partners and stakeholders to embed sustainability across all activities, making a positive impact on people and nature, which are two fundamentals at the core of our practices,” added Stevens.

According to the executive, the sustainable transition is not only just a strategic priority but is a fundamental necessity.

“ESG practices are no longer optional; they have evolved into essential requirements for staying competitive, attracting guests, and maintaining long-term viability,” he said.

Possible challenges

Talking about the challenges faced by the hospitality sector while reducing sustainability, IHG Hotels’ Mattar noted the most crucial to tackle is the lack of standardization.

He said: “For governments to set ESG targets, industry level standards are pivotal to mandate across different areas of sustainability. As an industry, standardization is a recurring topic of importance that appears in virtually every conversation, as well as across customer forums.

Mattar added: “It is the need of the hour for governments, businesses and trade bodies to harmonize efforts and as a result, maintain effective tourism and hospitality ESG standards.”

Stevens believes the hospitality sector faces intricate challenges when it comes to the development and execution of ESG strategies and deviating from traditional ways of doing things.

“The strategies are not one-size-fits-all solutions, each destination possesses its own unique challenges and opportunities, demanding a customized approach,” added Stevens.


Middle East to bolster global hospitality space with $1.9tn worth of projects

Updated 24 September 2023
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Middle East to bolster global hospitality space with $1.9tn worth of projects

RIYADH: Hospitality and residential projects worth $1.9 trillion are fueling a transformation of the Middle East, according to a report released ahead of a major industry conference.

Saudi Arabia, the UAE, and Egypt are at the forefront of this change, representing 90 percent, or $1.7 trillion, of the total investment, according to research by real estate consultants Knight Frank.

These findings were shared in anticipation of the Future Hospitality Summit, scheduled to be held in Abu Dhabi from Sept. 25 to 27.

The report stated that the Kingdom leads the regional investment chart with projects worth $1.2 trillion. The UAE and Egypt followed suit, with $300 billion and $200 billion earmarked, respectively.  

These ventures underline the Arab world’s goal of attracting 160 million tourists annually by 2030.

“The Middle East’s travel and tourism sector witnessed tremendous growth with a 46.9 percent increase in its contribution to the gross domestic product in 2023, which is the highest of any region in the world,” Turab Saleem, partner and head of hospitality, tourism and leisure for the Middle East and North Africa at Knight Frank, said.

He added: “This growth is being driven by a 14.5 percent increase in the number of jobs supported by the sector and a more than $107 billion increase in its overall contribution to the gross domestic product. Moreover, the sector has also created 0.9 million new jobs.”

Global commercial real estate experts Colliers also provide insights into the current landscape, revealing numerous advanced-stage hospitality-related negotiations. Several high-profile properties are poised for acquisition in the ensuing months.

James Wrenn, executive director and head of Capital Markets, MENA, at Colliers, said: “There’s a strong appetite for the hospitality asset class — particularly in Dubai and Ras Al Khaimah — from regional and international investors, buoyed by strong operating performance last year and the continued enhancement of the UAE as a top-tier international tourism destination.”

Additionally, Hala Choufany, president of global hospitality consulting firm HVS, expressed her hope for the industry’s growth in the region.

“The number of quality hotel rooms in the region grew fivefold from about 100,000 in 2010 to 540,000 in 2022, with occupied room nights growing from 27 million to 135 million. An additional 180,000 keys are expected to enter the region over the next five years, which is forecast to increase occupied room nights to 184 million by 2028,” Choufany said.

She added: “Today, the Middle East is expected to achieve higher growth compared to other regions, presenting attractive financial returns and providing long-term investment opportunities.”

The upcoming FHS in Abu Dhabi promises insights from over 100 industry leaders that will delve deep into the opportunities present in the region’s tourism sector, and is being held under the theme “Focus on Investment.”


Oman’s Q2 GDP falls 9.5% to $26.3bn due to drop in oil activities 

Updated 24 September 2023
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Oman’s Q2 GDP falls 9.5% to $26.3bn due to drop in oil activities 

RIYADH: Oman’s gross domestic product registered a 9.5 percent decline in the second quarter of 2023 compared to the same period last year, primarily attributed to a drop in oil-related activities. 

The GDP at current prices fell to 10.08 billion Omani rials ($26.3 billion) in the second quarter from the 11.14 billion rials recorded during the same period last year, according to the National Center for Statistics and Information. 

Citing data from the NCSI, the Oman News Agency reported that the decline was primarily due to a 18.3 percent decrease in the value of oil-related activities during the second quarter. This drop went from 4.46 billion rials in the year-ago period to 3.64 billion rials. 

A more detailed breakdown revealed that the value of crude oil activities slumped by 19.5 percent to 3.17 billion rials, and natural gas activities descended by 9.2 percent to 475.6 million rials. 

In the non-oil sector, revenue in the second quarter slipped by 3.6 percent. It fell from 7.12 million rials in the corresponding period last year to 6.86 million rials. 

Furthermore, earnings from industrial activities decreased, totaling 1.63 million rials in the second quarter, compared to 2.22 billion rials between April and June of 2022. 

During the second quarter, agricultural, forestry, and fishing activities contributed 206 million rials to the GDP, while services accounted for 5.02 billion rials. 

Additionally, the GDP at current prices for the first half of 2023 experienced a 2.4 percent decline, reaching 20.39 billion rials compared to the same period last year. 

Credit and deposits rise 8.7%  

Oman’s banking sector witnessed an 8.7 percent growth in credit and deposits, reaching 30.3 billion rials in the first seven months of the year. 

According to the country’s central bank, credit extended to the private sector also grew by 9.3 percent during the same period, reaching 25.5 billion rials. 

An analysis of this credit distribution by sector revealed that non-financial companies held a 45.9 percent share between January and June, followed by the individual sector at 44.5 percent. The financial sector accounted for 5.9 percent, while other industries represented 3.7 percent. 


Saudi National Housing Co. delivers over 30k units up to September  

Updated 24 September 2023
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Saudi National Housing Co. delivers over 30k units up to September  

RIYADH: In a bid to expedite first-time home ownership among Saudi families, the National Housing Co. has announced the successful delivery of over 30,000 units up to September 2023, in collaboration with property developers.  

The announcement coincided with the celebration of the 93rd Saudi National Day, further emphasizing the NHC’s objective of providing modern accommodations to over 300,000 individuals by 2025.  

This mission also aligns with the firm’s efforts to accelerate the pace of first-time home ownership, with the provision of diverse housing options and high-quality projects contributing significantly to the development of the real estate supply in the Kingdom. 

In a statement, the NHC explained that the delivery of the residential units is dispersed across 11 cities around the Kingdom, including Riyadh, Jeddah, Makkah and Al-Ahsa. They are also distributed across Dammam, Qatif, Alkhobar, Khamis Mushayt, Taif, Yanbu and Madinah. 

The company also stated that it is actively working on various future projects under construction, offering competitive prices while adhering to the highest standards of quality and sustainability within residential environments designed to enhance the quality of life.  

These projects integrate services, green spaces, vital facilities, and pedestrian paths to ensure safe and easy access to all amenities, it added. 

The housing company said this holistic approach is expected to boost social and environmental sustainability while promoting a healthy lifestyle for Saudi families. These projects are being carried out in partnership with the Real Estate Development Fund and financing agencies from the private sector. 

Established in 2016, the NHC aims to become a leader in the real estate development sector and foster strategic partnerships between the public and private sectors. 

The company said it is committed to providing high-quality projects in urban communities with modern designs and various housing solutions at affordable prices. This commitment aligns with the aspirations of future generations and aims to improve their quality of life, all in collaboration with experienced and efficient real estate developers. 

Under the housing program, one of the key initiatives of Saudi Vision 2030, the Kingdom aims to increase the proportion of Saudi households that own a house from 47 percent in 2016 to 70 percent by 2030.