Operational Whizz
With Jagersbacher and Khneisser heavily focused on growing Hilton’s portfolio in the region, the operations team is set to have its work cut out. Once a hotel is handed over, it falls to Essam Abouda, vice president — operations, Hilton Worldwide, Arabian Peninsula and Indian Ocean to ensure it is ready to enter the market.
To do this, he has to get the right team in place and Abouda says this is the most challenging aspect of business in 2011.
“We have a substantial pipeline of 30 properties in the region, including Conrad, Waldorf Astoria and DoubleTree by Hilton properties. We will need another 13,000 team members over the next few years to launch and operate these hotels,” reports Abouda.
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“That is a big task we’ve got ahead of us, because not only do we need to recruit our new team members but we also have to train them. And retention is just as, if not more, important. Within this recruitment drive we also need to take into account localisation policies.”
To assist in this, Hilton is launching a company-centric training course in partnership with The Prince Sultan College for Tourism and Business (PSCJ) in KSA.
“The course has been designed to promote the hospitality industry as a viable career amongst young Saudis and will ensure quality vocational training from one of the world’s pre-eminent hospitality companies,” explains Abouda.
When it comes to hotel performance, Abouda acknowledges rate increases will be another issue.
“Stabilising rates is also a challenge that the industry will have to tackle as a whole,” he asserts. “Occupancy will continue to strengthen across the region but bringing back rates will take concerted efforts by all major hospitality companies operating here.
“Yield management is becoming ever more important and is something that is now done in real time, not on a monthly, weekly or even daily basis,” asserts Abouda.
“As with any product or business, there needs to be a ceiling and a floor price set for a particular category of product. An Aston Martin cannot be sold at the price of a Toyota Yaris just because there is a lull in demand — it is bad for the brand and it is detrimental to the industry.
“Clichéd as it sounds, hotels need to believe in the quality and value of their product and stick to it. Indiscriminately slashing or hiking rates just to attract guests will not help business in the long run and just devalues the quality of the industry,” he says.
The industry also needs to realise that guests are booking hotel stays in different ways, adds Abouda.
“In 2010, a large number of our guests contacted us directly, for information and for bookings, via our website, social media portals or CRS centres, rather than going through travel agents,” he reveals.
“We first launched a series of iPhone applications in November 2009 that included a portfolio of chain-specific apps, and recently we launched our seventh app for our luxury Waldorf-Astoria brand.
There has been an impressive consumer response and revenue generated from room bookings across Hilton’s brands via the mobile apps soared 200% globally and have continued to increase.”
As a result, the vast majority of Hilton’s business comes directly.
“About three quarters of our business comes to us directly through either Hilton.com or reservations centres on or off property,” says Abouda.
“We work closely and successfully with a number of distribution partners, including online third parties such as Expedia and are seeing general growth in online activity, whether through our own brand websites or the third parties as consumers shift increasingly to the internet to make purchases.
“Our robust websites, investment in marketing, Hilton.com best rate guarantee and online optimisation techniques has meant that our growth in direct online business has kept pace with the growth in indirect online business over the past couple of years. Our strategy is to balance these third party relationships with ongoing investment in our own online capability,” he adds.
Guests may be booking travel in different ways, but they are still all looking for one thing, concludes Abouda — value for money.
“The new generation of travellers is choosier in terms of budget and value — they will invest in a luxury holiday if they know they are going to get an adequate ‘bang for your buck’.
Hotels have to build up offerings in terms of service extras, promotions, loyalty programmes as well as facilities like spas, restaurants, meeting rooms etc to keep attracting guests,” says Abouda.
“Lowering rates might lead to short-term benefits, but in the long term, it is the value-adding elements like this that guests will respond to,” he asserts.
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May 2, 2011
Hilton (like any big brand name hotel chain in the region) would be advised to first train and retain staff at their existing properties rather than expand ever more. The quality of service you get in hotels in the Middle east is pathetic as it is- esp. in relation to the rates they charge. Figur...