EXCLUSIVE: Q&A with Ali Hamad Lakhraim Alzaabi

Ali Hamad Lakhraim Alzaabi, president and CEO of Millennium & Copthorne Hotels, Middle East & Africa talks exclusively to Hotelier Middle East about opportunities and challenges for the coming year.

 1. Which hotels do you expect to open in the Middle East in 2014/beginning 2015?

• Millennium Executive Apartments Abu Dhabi, UAE
• Bab Al Qasr Hotel, Abu Dhabi, UAE
• Millennium Golf Resort Al Ain, UAE
• Millennium Executive Apartments, Dubai Marina, UAE
• Millennium Hotel Fujairah, UAE
• Millennium Hotel Muscat, Oman
• Grand Millennium Hotel Muscat, Oman
• Millennium Hotel & Convention Centre, Kuwait
• Millennium Hotel Hayel, KSA
• Millennium Kurdistan Hotel & Spa, Iraq
• Grand Millennium Hotel Sulaimaniah, Iraq

2. In total, how many rooms do these hotels comprise?

Almost 3,000 rooms.

3. What is your hero hotel opening in 2014 and why?

We have two key properties opening next year. The first one will add to our existing portfolio in Kurdistan, Iraq and that will be Grand Millennium Hotel Sulaymaniah. This property with iconic structure will be known as “Burj Al Arab of Kurdistan”. The property will be the first visible landmark welcoming any traveller coming in or out of Sulaymaniah. With a total of 250 rooms and all the facilities you would expect from an upscale property including luxurious rooms, signature restaurants, health club and spa and first class business facilities to cater to the business traveller.

The second property, Bab Al Qasr, will be located on the prime site of the Corniche in Abu Dhabi, adjacent to Etihad Towers and with exclusive views of the sea and Emirates Palace. This property will have hotel and serviced apartment components, with a total inventory of 667 rooms. The property will have a Moroccan-themed design and the Arabesque theme will be applied across not only the design but also the cuisine, amenities and luxury spa.

4. To meet the needs of your upcoming pipeline, how many staff will you be looking to recruit in 2014?

We will be looking to recruit over 2000-2500 staff and also providing the opportunity for our people to transfer within the Group as we encourage career development within the Company.

5. How can the hotel industry best entice new, young talent?

The hospitality industry has always been seen as a challenging industry to be part of, due to the perceived long hours and stressful environment. The first response to this negative perception is to change the image to a positive one.

Thankfully, the Middle East has always been known for its culture of hospitality and generosity, where not only guests are experiencing higher than average service and welcoming treatment, but also where the higher number of staff per room ratio has encouraged hotel companies in this region to invest more in training and development opportunities to nurture those talents. We see our hotels becoming schools by themselves, where any individual from any cultural background, nationality or educational institute will be provided with the chance to join a growing company, with growing opportunities and growing commitment to its people.

6. What do you think are the main challenges hotel GMs will face in 2014?

The continuous supply of rooms coming up in the market will force General Managers to be creative in finding unique selling points, in order to differentiate themselves and sustain competiveness. Not only this but customers will demand consistent levels of service and experience from hotels. Greater choice of hotels means more options for the customer, meaning hotels will need to stay on top of their game to retain the business.

Following on from our previous point we also believe that General Managers will require to invest in their employees in order to retain their services and limit the movement within the market. As the hotel supply broadens the consumer’s options it also provides employees with greater opportunities for movement. General Managers will need to ensure clear career development plans and fair remuneration packages are in place in order to retain their best employees and ensure the consistency of service previously mentioned.

We also believe one of the biggest challenges for GMs will be to keep abreast of the technological advancements continuing to impact the industry. The question remains as to whether hotels and their GMs will have the capacity to understand customers changing habits when it comes to booking behaviour. We now see customer adopting new distributions channels with recent studies suggesting 11% of hotel bookings are now coming via mobile.

The challenges will not just come from creating mobile/tablet compatible content to meet the new purchasing model but this will also extend to training staff on these new distribution channels. The ultimate challenge for hotels being to covert more online “lookers” to “bookers”.

In Dubai, there will be a number of challenges in 2014. For GMs with properties on the Beachfront the main challenge will be to retain healthy rates as more hotels continue to open to close to malls catering to the demand from Dubai’s reputation as a premier global shopping destination. On Sheikh Zayed Road the recent hotel openings are creating a hugely competitive situation and the serious threat of rate dilution prevails especially as we see the Expo 2020 decision drive more development towards the World Trade Centre area.

7. The rejuvenation of hotel F&B has been a hot topic in 2013, with some hotels restructuring F&B management, hiring at the corporate level, etc. What is your approach to reinvigorating F&B in 2014?

Our approach to developing our F&B proposition will be to have a dual focus towards the development and marketing of our “Homegrown” brands and the creation of strategic partnerships with recognised Franchise/3rd party brands. We believe this approach will provide a balanced portfolio of F&B concepts that meet market demands.

We recognise the importance of F&B as a significant revenue stream for hotels, particularly in markets such as the UAE and as such we are integrating our F&B division with the aim of strengthening our F&B operations at a regional level and re-focusing efforts into the marketing of our F&B outlets.

8. What are the key travel trends you are seeing emerge?

As mentioned, we see technology continuing to drive the latest trends in the industry. Hotel Groups will need to invest even more resources into Digital, in order to adapt to the changing distribution models for travel.

We see the increasing numbers of travellers making bookings through mobile devices set to continue as consumer confidence increases in secured payment processes through digital devices and more consumers adopt mobile for e-commerce purposes.

Social media will continue to have the powerful influence on travel purchasing behaviour. Sharing information is at the heart of Social Media and a consumer’s ability to share information instantaneously with friends or followers creates a very interesting dynamic for the hotel industry. The challenge for hotel groups will be to help drive the “conversation” so they will require a clearly defined strategy for Social Media as well as the necessary resource to successfully manage the brand reputation online.

9. What are you doing to target new markets such as the BRIC market and Generation Y travellers?

India in particular is a key target market. Historically, the region and specifically the UAE have had very close ties with India. Indeed, as we know the demographic makeup and the number of flights to the sub-continent both from Budget and International airlines has meant ties now are closer than ever. We are planning to increase our exposure at major Indian travel & tourism events such as the SATTE exhibitions. SATTE has been promoting India’s tourism for a number of years and it has evolved as a truly global exhibition to become the launch platform for many countries and tourism bodies from across the globe to do business in and with India. We are also working closely with DTCM and Abu Dhabi’s TCA to participate in their Indian roadshows which we hope will open up both the B2C and B2B markets in India.

10. What is your vision for 2014?

The region offers tremendous opportunities and we are looking to further strengthen our presence in key markets. We are looking to become strong players within the UAE and Saudi Arabia as those two markets would take almost 75% of our expected operations within the region by 2015.

We are growing very fast in KSA, with cities such as Madinah, Makkah, Riyadh or Jeddah; but we have also seen potential in sub-cities such as Hail, Jizane, Tabouk, Baha and Al Khobar.
All those cities are expecting to see at least one of our brands. We have other cities within KSA in development and we look to improve our market and fair share in existing markets such as Dubai, Abu Dhabi or even Doha.

The GCC has been key to support our brand recognition. Despite international travellers coming in the region, the GCC remains strongly a regional hub with feeder markets within the Middle East. Therefore improving our presence in both feeder markets and destinations, only help our company to sustain our growth, further promote the brands and support loyalty within our customer base.

Our commitment to the GCC translates our vision to further support our brand awareness and competitive advantage through this critical mass. We have opened last year our first property in Amman, Jordan and also in Sulaymaniah, Iraq. Iraq shows good potential and we have closed already other developments for the coming period with two new expected openings. We have other projects in Eastern Europe such as Georgia or even in Africa, with our first hotel in the continent expected in Durban, South Africa. As you can see, we have enlarged our map of operations and expected developments but we keep on looking at other key markets such as Turkey and other promising countries in Africa.

In terms of brand diversification, we look now at further expanding our budget brands as there is a growing opportunity in the region. Similarly, we have positioned ourselves as a key player in the serviced apartment offerings. The average length of stay is one of the highest in the industry for this region. Some markets have shown a clear need for extended stays due to the purpose of their visit. If you look at religious pilgrimages in Madinah and Makkah for example, there is a clear need for our guests to have a property that offers all facilities they require during a longer period of time.

We have also noticed more and more developments taking form of a mix component between hotel and residential units. Therefore it did seem strategic for us to develop a standalone brand dedicated to hotel apartment only.

This decision has shown to be fruitful as we have multiple properties signed already in cities such as Dubai, Jeddah, Doha and the first one is expected by to open early 2014 in Abu Dhabi.