Recession busters

Hotelier presents a round-up of the success stories from some of the most proactive hotel groups operating in the region

MÖVENPICK HOTELS & RESORTS

In 2010, MÖvenpick opened two milestone properties in Dubai. Mövenpick Hotel Jumeirah Beach, which opened in March, is a contemporary upscale five-star hotel with 294 modern guest rooms offering a “fresh, funky and distinctive experience”. In October, the group opened Ibn Battuta Gate,a five-star 396-room property inspired by the journeys of the 14th century Arabian explorer, Ibn Battuta.

Toufic Tamim, vice president sales and marketing — Middle East for Mövenpick Hotels & Resorts Management FZ-LLC, commented: Our portfolio has grown to 23 properties in the Middle East and the response has been strong. Our focus on offering quality of service and exciting dining experiences to our guests has helped us to ensure good business.

“We currently have 15 projects under development in the region and this is an indication of the growth prospects for the Mövenpick brand and how we have been able to identify opportunities, despite the global economic climate.

“Overall, our hotels are obtaining stable occupancies mainly in countries that have not been strongly affected by the global financial crisis, including Jordan, Lebanon, Saudi Arabia, Bahrain and Qatar. Dubai has experienced a rather significant downturn in ARR with low occupancy during the summer months. However, the market has rebounded swiftly after Ramadan,” said Tamin.

He added that MÖvenpick had seen a 15% increase in the corporate segment across its hotels in the region in 2010 over 2009, a trend he expects to see continue in 2011.

THE REZIDOR HOTEL GROUP

Rezidor area vice president Marko HytÖnen describes 2010 as a “ramp up year” for the group, with new inventory added to some of the eight hotels it launched in 2009 and the full opening of the 427-room Radisson Blu Hotel, Cairo Heliopolis at the start of 2010.

“I think for sure the Radisson Blu Hotel, Cairo Heliopolis was an important opening for us,” said HytÖnen. “Cairo is a key city within this region and we have wanted a presence there for some time — it was about finding the right opportunity. This is a brand new, 427-room hotel in the heart of the Heliopolis district. The hotel offers fantastic meetings and events facilities including a large ballroom and SEVEN meeting rooms.

“This is our second city hotel IN egypt following the opening of the Radisson Blu Hotel, Alexandria in 2009.”

HytÖnen said that Saudi Arabia and Egypt were the strongest performers in 2010, with guest demand growing for all inclusive packages in the latter.

“With Saudi, the economic growth, government spending and religious tourism have all resulted in an increase in activity,” commented HytÖnen. “Egypt has experienced unbelievable growth following the downturn and particularly the resorts have proven extremely popular this year — people are looking for adventures, open to trying new destinations and the all inclusive offerings in these locations make them very attractive options.”

He said that November looked to be the group’s best performing month across the region, and that that company has once again kept firm control of costs.

“We successfully implemented our 'Hedging 4 Turbulence' cost saving initiative in 2009, which resulted in annual savings of EUR 36 million (US $48.5 million) across the company. The impact of this really kicked in during this year where we have managed to do more with less. By keeping a tight reign of our fixed costs we have so far managed to maintain the 2009 level,” concluded HytÖnen.

Hospitality Management Holdings (HMH) continued to open hotels throughout 2010, with eight openings in the Middle East alone.

Most exciting was Corp Executive Hotel Apartments in Al Barsha, Dubai, said HMH CEO Michel Noblet, because “it was our first hotel to open its doors under the Corp brand, which has been designed keeping in mind the needs of business travellers. It has really come out as a very strong brand, extremely well received by our guests”.

Hotels under the HMH umbrella “did quite well during March, June and October, particularly in the UAE and in KSA,” continued Noblet. “This was mainly owing to the continued marketing, steady business activities and trade shows.”
In terms of positive trends, Noblet identified more travellers coming in to Dubai from the GCC and credited Flydubai “an instant hit”.

“We had more long-stay guests as serviced apartments became a popular choice for guests. People preferred to stay in serviced apartments with all expenses paid and no strings attached rather than getting tied up to long-term rental commitments,” said Noblet.

However, he acknowledged a “massive drop in corporate business in 2010 with more and more companies choosing to hold virtual meetings”.

“Even if there were meetings these were more at regional level rather than large international gatherings. Having said that, overall business was stronger than expected, especially in the mid-market segment,” said Noblet.

HILTON WORLDWIDE

For Hilton, 2010 was a busy year in terms of both new openings and signings. The company launched the first Hilton Hotels & Resorts property in Jordan’s Dead Sea, and also took over the management of the King Hussein bin Talal Convention Centre in Jordan. Meanwhile, over the course of the year, the firm signed new properties in KSA, Egypt, Jordan and Tunisia across the Hilton Hotels & Resorts and DoubleTree by Hilton brands.

Jean-Paul Herzog, president, Middle East and Africa for Hilton Worldwide, commented: “Regionally, several Hilton Worldwide brands and hotels were recognized as best in class and Hilton Hotels and Resorts brand was voted number one in the Middle East for the fourth year running by the BDRC Continental Survey. We launched two National Sales Offices for the UAE in Dubai and Abu Dhabi, consolidating sales teams from all the hotels in the country into one cohesive team.

We also collaborated with Time Out Dubai to launch Dubai’s first downloadable city guide. Other regional highlights include the re-opening of Verre by Gordon Ramsay at Hilton Dubai Creek and a visit by the master-chef himself in October to launch the much-acclaimed chef’s table”.

On a global level he added: “we also unveiled a fresh new brand identity for our core brand Hilton Hotels & Resorts and launched eforea: spa at Hilton. Finally, with added value remaining high on the agenda we saw a big increase in membership of HHonors, our loyalty programme — we now have 26 million members”.

KEMPINSKI HOTELS

Kempinksi hit the headlines in 2010 with the opening of its first hotels in Qatar and Cairo. Kempinski Residences and Suites, Doha is a 62-floor residence tower offering 370 fully furnished serviced suites. Currently the tallest building on Qatar’s dominating West Bay skyline, at the top of this towering skyscraper is two duplex Sky Villas with six bedrooms each.

Kempinski Nile Hotel, Cairo, meanwhile, is a boutique property designed by French architect Pierre Yves Rochon with 137 rooms and 54 suites with private balconies and views of the Nile.

Ulrich T Eckhardt, president MEA, Kempinski Hotels said that Emirates Palace in Abu Dhabi, which he describes as “an icon in the region, with multiple, creative events that drive ongoing loyalty”, and Kempinski Mall of the Emirates in Dubai were the group’s top performing hotels in 2010.

He added: “Our typical guest is someone looking for the European individual approach to luxury that we offer — a traditional, established, wealthy traveller who favours discretion, a guest on their once in a lifetime journey, or a younger, regular business traveller who is looking for a new, exciting experience at a new destination.They choose Kempinski because of the reputation of the brand and the fact that we actually have very different properties that appeal to their individual tastes”.

The biggest guest base was Western Europeans, Arabs and Russians, and though corporate business experienced a downturn, Eckhardt said “figures have steadily risen”.

In the past 12 months, Sofitel has launched two fantastic new properties in the Middle East, Sofitel Dubai Jumeirah Beach and Sofitel Al Khobar in Saudi Arabia, both meeting the new standards of the refined Sofitel network.

Sami Nasser, Vice President Middle East, Africa & Indian Ocean and general manager Sofitel Dubai Jumeirah Beach, said the Dubai hotel already had “a healthy mix of business and leisure, meeting demand for transient accommodation”. He added that hotels in Egypt were busiest during spring and summer, however, he said that Dubai hotels had a later peak season and were “extremely busy from September to December”.

Leisure business has also been on the up for Sofitel, with more bookings from emerging destinations including Brazil, China, India & Eastern Europe.

The success to date of the new hotels bodes well for the future, according to Nasser.

“We are opening more than seven hotels in the region over the next two years (between 2010 and 2012). We only recently opened Sofitel Al Khobar in Saudi Arabia, which has been a big success so far.

“Next we have properties coming up in Bahrain and Abu Dhabi and a Suite-Only property in Mauritius. There are full renovations going on in our Aswan Old Cataract and Luxor Winter Palace properties in Egypt — and these truly are legendary hotels. In Dubai, we have two properties coming up for 2012 — one on Sheikh Zayed Road and one on The Palm,” he revealed.

WYNDHAM HOTEL GROUP

US company Wyndham Hotel Group made significant in-roads to the Middle East market in 2010 with five hotel openings, including the first Ramada Encore in the region, located in Doha.

Wyndham managing director EMEA Michael Poynter said it was the first branded budget hotel in Doha.

“We are proud of being the pioneers of this sector in Qatar. It is also a first as it marks the start of our transition to a company that also manages as well as being a company which franchises hotels,” he said.

“We are also very excited in entering two new markets, Sharjah and Sharm El Sheikh,” he added. In addition, Wyndham opened two properties in Dubai and inked deals for its first Wyndham branded hotels in the Middle East; the Wyndham Grand Riyadh and the Wyndham Grand Regency in Doha.

In terms of performance, Poynter identified Lebanon and Dubai as the leaders.

“Lebanon was high on the list this year. The economical and political stability boosted tourism activity in Beirut and the Ramada hotel has benefited tremendously from the current market conditions,” he said.

“we cannot ignore Dubai. Although the market was down, the absolute values (occupancy and ADR) are still at a very good level compared to the other regional markets.”