Taking action to adapt

Action Hotels chairman His Excellency Sheikh Mubarak Al Abdulla Al Mubarak Al Sabah explains why operators need to be flexible to meet Middle East-specific market needs.

You have four hotels currently under construction; what can we expect from these properties?
We currently have an airport hotel, which is in the northern part of the city of Muscat. It’s going to be the first Holiday Inn in Oman, and it is a very good brand catering for business and leisure and the local domestic market.

That will be opening Q1 2012 with 178 rooms with suites, and it comes with an office building next door which we are looking at using for some themed F&B outlets to cater for the local tourism market.

The capital is expanding quite rapidly…and they are up scaling the airport and doubling its capacity, so we have a very good position for the Holiday Inn there.

The next one we have is Ibis in Bahrain, currently about 318 keys of rooms and apartments, which is rare because Ibis hotels usually just have rooms.

We did a modular approach here where we eliminated one of the rooms and used it as a sitting room. Then we basically can sell it as a one-bedroom suite or two-bedroom apartment.

And that’s very important because most of the clientele in Bahrain are from the GCC and families from the Eastern Province. In a way we are changing the brand standards slightly to cater for the local market, and this is very important in the hotel industry.

This will be a dry hotel also, there’s going to be no alcohol there, which is also very unusual for a hotel designed to cater for the holiday market. That’s something we need to point out and stress in our Ibis in Bahrain. That also will be opening in the latter part of 2012.

We also have a project in Brisbane, until now we haven’t chosen an operator but most probably it will be a midscale operator, in the CBD district just in front of the casino.

Queensland is one of the fastest growing states in Australia, not only because of the GDP growth and raw materials being extracted, but it is also the sun state of Australia.

It has very reliable weather throughout the year, and the temperature is favourable for people who want to go on holiday or even retire and live there. And I think we have a very good location in a city where for the last 10, 15 years there have been no new build hotels. This will be a very big winner in my view.

The fourth property is a Staybridge Suites; this is a building we already have that we are converting into a serviced apartment. This will be the second Staybridge in the UAE after Yas Island in Abu Dhabi, and will be the first IHG flag in Ras Al Khaimah.

We thought there was added value to put in a long-stay property because of the local market — businesses and industries in Ras Al Khaimah require some sort of product which is not leisure-based. Most of the products in Ras Al Khaimah are leisure — they cater to foreigners or local residents in the UAE who go on weekends away etc, or for people who come on vacation. This is mainly catering for medium or long-stay business people and families who want to stay there for a week, a month etc. That will open first quarter of 2012.

You mentioned that in Bahrain you are altering the ibis brand standards; how important is it that operators are flexible with this issue?
I think they are pretty flexible, I would like to see some more flexibility to cater for the Middle East region. [In Bahrain], we have a pool in the hotel.

I went to Ibis in Morocco, all of them have pools you know. The Ibis in Jakarta has apartments, I went and looked at the brochure and found that out. The market here requires apartments, so you’d better do it.

Of course we need to differentiate the wood from the trees; we can’t ask a three-star hotel to be a five-star hotel, that’s abnormal. [For example we can’t have] the room service element because we know it will increase cost etc.

I’m not against that or else I should have gone for a four-star rather than a three-star property. The important element that needs to be looked into, especially in the Middle East, is issues to do with families and trying to cater for them, especially large families.

In our part of the world, they come by car and they’re used to bell boy service. We’ve introduced this in Kuwait now. The mentality is you must have a bell boy. There weren’t any mini bars and we insisted on having them in our hotels.

We’re not going to make money out of mini bars but the weather is hot, if you want to get a cold drink at night that’s one reason to have them, and another is that a lot of people have problems with medication, they need to keep it in the fridge. It’s not a mini bar, it’s a mini fridge.

These are the small issues, it’s the fine detail that matters. The devil is in the detail.

Will this flexible approach be needed to grow the midscale market?
You cannot be everything to everybody, but there are some issues where you need to improvise with the local market. The average family size here is different from Europe [6.5 people per family in KSA]; and the brand is different here from Europe.

That’s led us to move towards not only midscale hotels but branded serviced apartments, because we appreciate that in this region people tend to want to stay long-term in apartments. The average cost of a three-bedroom apartment is cheaper sometimes than a four-star room or two rooms.

In Saudi Arabia, which is the biggest GCC market travel-wise, the biggest customer requirement is the serviced apartments; they don’t want a hotel room. And that is why we’re building the Staybridge property quite a lot.

Are you looking at developing any properties in Saudi Arabia?
We’re looking at it, but in the current circumstances we want to focus on what we have now — but yes we are very keen on doing a couple of properties in the medium term, not immediately… but we may do something in the eastern province, probably by the end of this year.

We have a 16 properties’ land bank, of which five are open [in Salmiya and Sharq in Kuwait; Muscat, Oman; Amman, Jordan; and Melbourne, Australia] and four are under construction, so we have an internal pipeline which is enough to keep us going; it’s very capital intensive and we are focusing on that.

What do you predict will be the strongest markets in 2011?
This year is generally a tough year unless you’re in Dubai. Dubai is benefitting a lot from the region, we don’t have any hotels yet in Dubai. Kuwait is a strong market, Australia is a very strong market.