Samir Baidas, senior VP ? International Lodging Development, Marriott International Inc and Darroch Crawford, MD, Premier Inn Hotels MEA at AHIC.
Balancing act
For the hotelier, the budget boom can be a profitable one — but only if the product is right.
“This sector offers exceptional returns on investment and the region is starting to realise this,” Crawford observed.
“In the last year or two, more people are identifying the success of budget brands and realising the returns are exceptional. The whole project cost is considerably less – from building to operating. It’s a very efficient business model and those people who put return on investments ahead of ego are getting returns very fast.”
Guy Wilkinson, director of Viability, a hospitality consulting firm, added: “It’s been proven in several markets that the level of profitability is opposite to the number of stars. You have long-term value creation in a five-star product, whereas, in economy, you’re looking for direct return on investment.
| Advertisement |
“ROI in the economy sector is exceptional — we have some running at 70% GOPPAR, but it’s important not to try to be something you’re not,” Wilkinson warned.
Article continues on next page ...
Search our database of more than 2,700 industry companies
