Saudi Arabia's first hotel chain comes of age

Al Hokair Group’s MENA Hotels & Resorts brand is set for regional expansion following the success of its first hotel in Riyadh, reports Viability director Guy Wilkinson

The Gulf region has seen a number of local hotel chains come to prominence over the past few decades.

The UAE has predictably been the hot bed of chain development activity, given its prominence as a tourist destination, with such established chains and brands as Al Diar (from Abu Dhabi National Hotels), Coral/HMH, Danat (National Corporation for Hotels), Flamingo, Habtoor, Jebel Ali International, Jumeirah and Rotana being joined in recent years by a plethora of start-ups, including The Address, Armani, Auris, Citymax, City Seasons, Essque, ETA Star, Flora, Gloria, Layia, Samaya, Shaza, Tamani, V. Continents and Vision.

Elsewhere in the GCC, Bahrain has its Elite Group of serviced apartments, Qatar National Hotels has its Merweb brand, while in Kuwait, Safir International is in fact the Gulf’s oldest chain, and Refad (including The Monarch and other brands) is growing fast.

In Saudi Arabia — by far the region’s largest hotel market, with 1140 hotels with 102,305 rooms in 2009 — there have surprisingly been only two chains to emerge, Dallah Hotels & Resorts, with three properties in the Western Province, and most recently, MENA Hotels & Resorts, which launched its first hotel in Riyadh in 2008.

Both these chains grew out of hotel owning companies, which is also true of the majority of the region’s chains and brands. MENA may be termed the first ‘new generation’ hotel operator in the Kingdom, in that the chain set out from the start to equal, if not exceed, the standards of the top international management companies.

MENA is part of the Al Hokair Group, headed up by Sami Al Hokair, which additionally owns and operates three unbranded hotels in Saudi Arabia, and has as no less than 22 others under franchise from different international chains: six Holiday Inns, 13 Golden Tulips/Tulip Inns, an upcoming Novotel and two Hilton Garden Inns (one operational, one to open soon).

In short, it is an owning company with a wealth of experience, which it is now putting to good use in offering management expertise to other owners.
The chain’s first property is the MENA Hotel Riyadh, a 164-key ‘lifestyle boutique hotel’ in downtown Olaya, which reflects the company’s four-star ‘lively, welcoming and affordable’ core brand ethic, including bright contemporary interiors with oriental accents, as well as the latest in technology.

The other three brands on offer are MENA Grand, soon to be embodied in a 400-room five-star property in the Khaldia district of Riyadh; MENA Suites, opening soon in Olaya; and Bayti by MENA, a limited service concept.

Some of the Al Hokair group’s existing portfolio of internationally branded properties are now being targeted for conversion, while further management opportunities are being sought in the MENA region.

Owner Appeal
So why would a prospective owner consider MENA Hotels instead of one of the longer-established international brands? “We tell them that we are owners ourselves, so we speak their language - we know intimately the concerns of hotel developers and owners in the region and understand perfectly well their objectives,” MENA’s director and operational supremo, Fadi Mazkour tells me.

“Our expansion plans are restricted to the MENA region that we know best, and as a result, we will always be geographically close to our owners. In this way, we can be more flexible than the big international brands in terms of responding to owners’ requirements, as well as in fees we charge.”

According to Mazkour, the MENA Hotel Riyadh has achieved 32% Saudisation of its workforce, from rank and file staff through to management. All the Al Hokair hotels receive support in achieving similar levels through the services of the Abdul Mohsen Al Hokair High Institute for Hospitality in Riyadh.

Mazkour claims that MENA’s various brand formulae have been carefully conceived to maximise owner returns, with the MENA Hotel Riyadh achieving a GOP of 62% in 2010.

“It’s a matter of optimised human resources, efficient distribution and real value creation through offering guests the same luxurious standards they enjoy at home,” he says.

MENA Hotels & Resorts is linked to the expected GDS, IDS and wholesalers, and will soon benefit from a central reservation office to be created for the Al Hokair Group hotels, which will be opened in future to Saudi properties outside the group.