Rendering of The Westin Hotel & Spa (Abu Dhabi): Westin will make its debut in the emirate this year, marking yet further expansion for the brand.
Room for more
Relocated from EMEA Brussels HQ two years’ ago, Neil George has only marginally cut down on his air miles in his role as VP, acquisitions and development for Starwood in Africa and Middle East.
The fruits of his team’s labours are apparent with a tsunami of new deals flooding the markets recently — including a St Regis and Residences property in Amman; the conversion of Al Maha Desert Resort & Spa in Dubai to a Starwood-managed Luxury Collection; a first step into the emirate of Sharjah with a new-build Sheraton, followed up with a contract for a Four Points by Sheraton, and the coup of taking out the InterContinental Muscat under an agreement with Omran to replace the hotel with new brands, the W, Westin and Element.
In addition, an agreement was inked with the Emirates group and wasl Asset Management to extend the operation and management agreement for Le Méridien Al Aqah Beach in Fujairah and for four other Le Méridien and Westin properties in Dubai until 2025.
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Other activities include a new 200-room wing at Le Méridien Dubai and a second 200-room tower at the Four Points by Sheraton Kuwait, although a minor hiccup involved the recent termination of the management contract for Le Méridien Kuwait and postponement of a proposed Element hotel at ADNEC in Abu Dhabi.
In addition, the W Festival City deal in Dubai is being re-worked while the St Regis Dubai project is on hold.
Overall, George stressed that 2010 had been a good year, and that 2011 was set to follow suit.
“We are seeing a couple of interesting trends in the Middle East,” he said. “Following the downturn, some owners who have signed with brands that are not as well established (as we are) are now appreciating the importance of a global sales network, system and branding.
“They have reached out to us saying they have a hotel with a name on it, but could they convert in to a Starwood brand.”
Encouragingly, the second trend has been for projects that were halfway through with semi-built hotels that are being picked up and continued: “It makes no sense to leave them in that state,” said George.
All of which is contributing to the steady expansion of Starwood through the Middle East where George is close to sealing deals for at least three new-build Sheratons as well as a possible agreement to roll-out more Aloft hotels in KSA.
“It is difficult to assess the Middle East with a broadbrush but there is enormous interest in Saudi Arabia as a market and this is justified,” he said. “We see huge potential for Aloft and we are in preliminary talks with an organisation that should have the wherewithal to realise this.”
Another market of interest is Lebanon, where George acknowledges Starwood is under-represented: “Beirut can take pretty much all of our brands, and there are not many markets that can do this — and we are in advanced discussions on a couple of things there.”
Over in the UAE, given the luxury content entering the Abu Dhabi market, it is select service hotel brands that could be the next step in this city, he said: “There is a market for Four Points by Sheraton, Aloft and Element here, and in fact, we also see scope for these brands throughout the Middle East as markets mature.
“We currently have our focus in the upper upscale but we are seeing opportunities and are starting to move in to the lower star bracket.”
But, while select service and budget brands are the flavour of the month, George is also nurturing the ongoing demand for icon hotels and trophy properties that still have a role to play in the regional hospitality sector.
“We have a legacy of having been first in a large number of cities, but our assets here have aged, city centres may have moved and locations might not be so good now — this is true of other markets as well as the Middle East.”
As a result, two years ago, Starwood budgeted a US $6 billion spend on renovating and reprogramming the Sheraton brand, results from which are beginning to come through ... and this energising of the brand has resulted in the agreement to open in Sharjah: “We are actively working on at least three other Sheratons and will make an announcement within weeks,” promised George, adding that the new-look Sheraton Oman will also showcase some of the signature elements of the revitalised brand.
Meanwhile, as secondary destinations seek to expand in the wake of their fast-moving neighbours, Starwood has also captured a market for trophy assets, a term less indicative of vainglorious over-spending these days but more a message that these emirates mean business.
“It’s all part of the bigger picture with Luxury Collection brands in places such as Ajman and Ras Al Khaimah for instance,” he explained.
“These destinations are looking to have a beacon of worldwide excellence that can serve as a magnet in attracting tourism, creating a market and providing awareness and standards.”
And, a bonus from the Starwood point of view, financing in these smaller destinations is not dependent on the still cautious markets.
“There is no real evidence of banks loosening up on financing, particularly for projects in Dubai,” said George. “The whole sector has been tarred by the same brush — while there are some developments that should never have got started, there are sound business cases for niche projects.”
But one that has yet to feature on the Starwood radar is The Palm Jumeirah, where George is cautious about proceeding: “The stars have not yet aligned on that piece of land...,” he concluded.
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