KSA's MENA Hotels and Resorts means business
Saudi Arabia-based MENA Hotels and Resorts, part of Al Hokair Group, has embarked on an aggressive growth strategy that it hopes will position it head-to-head with the region’s leading homegrown operators, such as Rotana and Coral. Louise Birchall reports
MENA Hotels and Resorts, the hotel-management arm of KSA-based developer Al Hokair Group, plans to become the region’s leading homegrown operator through an aggressive expansion plan involving conversions and new builds.
Owner and developer Al Hokair Group has 28 existing hotels comprising 3500 rooms in the GCC managed by operators including Holiday Inn, Golden Tulip and Novotel as well as a minority currently run under the MENA Hotels and Resorts brand.
MENA Hotels and Resorts director Fadi Mazkour (below left) tells Hotelier that around 50% of these owned hotels will be reflagged.
“By around 2013 we should have completed the plan,” he adds, saying that most of the reflagged properties would be in Saudi Arabia.
“There is a renovation plan of more than SAR 150 million (US $40 million) which will be put into these hotels for rebranding,” he reveals.
In a statement the group added: “We will continue to work in partnership with hotel brands like Golden Tulip, Novotel and Hilton Garden Inn, but the focus for Al Hokair Group has moved to developing MENA Hotels & Resorts, our hotel management company which was established in 2008.”
Rapid growth
There are already three hotels operational under the MENA brand, all in Riyadh: the MENA Hotel Riyadh was the first to open under the brand in 2009, followed by the 400-key, five-star MENA Grand Khalidiya, Riyadh and the MENA Suites Olaya, Riyadh which opened last year.
By the end of 2012, the group hopes to have brought this number up to five with the launch of the MENA Suites Hotel Al Khobar and a boutique 90-room hotel in Riyadh.
“By 2013 we’ll have about 10 properties operating and by 2014 we’ll have brought this up to 15-16 properties operational,” declares Mazkour.
Out of these, Mazkour says several will fall into the five-star MENA Grand category, while the rest will be divided as 70% four-star MENA hotels, and 30% MENA Plaza serviced apartments targeted at families and longer-staying clientele.
Guest markets will be “at least” 60% international business travellers, with “internal short visits or breaks from Saudi Arabia and other neighbouring GCC countries” making up the rest, according to Mazkour.
In terms of locations: “The majority of our hotels will be in Saudi Arabia, Jeddah, Al Khobar, Dammam, Riyadh, Yanbu and Dubai.”
“KSA is definitely a growing market compared to other GCC markets. The indication is very clear that hotel expansion and investment is happening in Saudi Arabia,” he added.
Outside the Kingdom
However, the operator is also venturing outside the Kingdom, with signed properties under construction in Oman, Jordan and Lebanon.
“There is no indication towards the opening dates; there are some delays in construction so they will not be due in 2012 for definite, it will be more like 2013 or the beginning of 2014,” explains Mazkour.
In addition, there are plans to restart construction on two signed MENA-run hotels within Al Hokair Group’s Al Sahara Kingdom project in Dubailand next year.
The Al Sahara Kingdom has been master-planned over a 50 million ft² area in Dubailand, the stalled multibillion-dollar real estate development backed by Dubai Properties Group (DPG).The project includes two four-star hotels, an indoor theme park, restaurants, residences and a retail souk.
“We will try to [restart construction] of the hotels and theme park in 2013, combined with the apartments and villas.” says Al Hokair Group deputy CEO Sami Al Hokair.
Furthermore, Mazkour adds there will be a MENA hotel in Abu Dhabi – though it has not been signed yet. The chain is also eyeing Mecca and Qatar.
“We don’t have any firm contact [in Qatar] yet but we’re under negotiation with a couple of investors.”
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Budget boom
Another of MENA Hotels and Resorts’ brands, yet to be launched, is Bayti Suites; a collection of budget suites to be located in residential areas for medium- and long-stay travellers.
To grow this brand, the company is planning to offer its services as an operator to the many small, unclassified independent hotels struggling to gain business licences under the Saudi Commission for Tourism & Antiquities (SCTA) ratings system.
“There are plenty of self-standing Saudi-managed hotel apartments looking for proper operators to look after the quality and increase income and revenue so they can gain a business licence,” explains Mazkour.
“Without licences these hotels will be out of business, but in order to qualify for a licence and a hotel classification they need to meet regulations set by SCTA in terms of fire safety, hygiene, room size and emergency exits. And they need an operator to help them to do that.
“So we’re offering these services for these hotels and will not ask for more than the minimum expected level of service; just a clean bed, towel and shower for clients. The hotels will be run on a budget concept and will make more revenue through our GDS systems and other networks.”
According to deputy CEO Al Hokair, the Bayti growth strategy will be the chain’s “niche”.
Ultimately, it is through the strategic development of MENA Hotels and Resorts brands — with $79 million currently invested in developments — that it hopes to compete with other leading GCC operators.
“MENA is a local, regional brand and if you look at the success stories of regional brands in the area, we aspire to take MENA Hotels and Resorts to such heights,” Al Hokair asserts.
“After two or three years, MENA Hotels and Resorts will be the biggest group in the Middle East, the same as Rotana or Coral, but a Saudi company,” he concludes.
MENA Hotels and Resorts brands
MENA Grand
• Luxury hotels
• Centrally located
• Generally large-sized properties with between 350 and 500 rooms
• Service facilities including restaurants, business centre, leisure facilities
• Targets business travellers and leisure tourists
MENA Suites/Plaza
• Quality residential suites
• Located in residential, leisure and business areas
• For medium to long stays
• Comprise between 150 and 250 suites and apartments
• Limited service F&B, business and leisure activities
• Targets businessmen, professional expatriates
Bayti Suites
• Budget suites in residential areas
• Targets medium to long stays
• Comprise between 50 and 100 suites