Tarek el Sheif, the managing director of V.Five Continents Hospitality Group says that dry hotels are increasing in popularity as more GCC families an
Sharia compliant
Of course, the customer base is predominately made up of Muslim families, as el Sherif explains that GCC families who are travelling “would rather not be associated with places that serve alcohol”.
But while he says that GCC families prefer staying in a dry hotel, he doesn’t think there is a need to make any of the V.Five Continents hotels sharia compliant.
“I think a lot of people get mixed up with the idea of sharia compliant and dry hotels — they are two different concepts. In my opinion, if you look at the reality of these two concepts, a dry hotel is simply a hotel that does not serve alcohol, while a sharia compliant does much more than that,” el Sherif explains.
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“I have firsthand experience with my previous employer where we had a hotel that was built to be a dry hotel and then after some time it was decided it would be a sharia compliant.
When we made the conversion from a dry hotel to a sharia compliant hotel, guess what — we lost most of the Arab families because they wanted to go to the swimming pool together,” he adds.
Profit
While it is a sensible business decision not to alienate GCC families, there are many dry hotel naysayers who argue that dry hotels will automatically make a loss through not serving alcohol in their outlets.
But el Sherif argues that this is not the way to think about dry hotels: “The right statement for that is not ‘losing money’; it is that you are ‘not making as much money’,” he explains.
Though this sounds like splitting hairs, el Sherif points out that dry hotels were never intending to make money from alcohol in the first place.
“You know what to expect from a dry hotel , you set the budget accordingly and you achieve what you expect to achieve — so you are not making losses,” he continues.
“I always say to industry colleagues ‘why are you saying you are losing money — you know from day one you are a dry hotel so don’t complain about it’.
“I would assume that you didn’t budget to make revenue out of beverage — so don’t tell me you’re losing money. It is like you either want to open a small grocery store on the corner or you want to open a big supermarket. You cannot make the same money from the small grocery store,” he adds.
While the company is hardly a small grocery store — el Sherif reveals that it intends to expand from its current three properties to a potential 15 over the next three years — understanding its place in the market, and who its customers are, has seen the hotel group prosper despite launching during the global economic downturn.
And with more owners seeking out operators willing to run dry hotels, and an increasing number of GCC families travelling to new destinations in the region, V.Five Continents seems perfectly positioned to do very well indeed.
Expansion plans
V.Five Continents Hospitality
Group currently operates three properties: one each in Dubai, Abu Dhabi and Jeddah.
It has contracts signed for five-star hotels in Egypt and Kuwait (under its five-star brand Palazzo), and is also looking at launching properties in Doha, Egypt and Medina. Overall, the company is looking to have 15 hotels operational within the next three years.
Five continents
The company V.Five Continents was established three years ago in 2007, and is part of the mother company Emirates Associate Business Group (EABG).
V.Five Continents is a hospitality management company, and is one of around 36 different companies which are owned by EABG. At the core of the hospitality company is its decision to manage only dry hotels. It currently has three properties operational and is planning to have up to 15 hotels operational in the next three years.
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