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Furthermore, Sharpe is certain the manchise contract offers a higher return on investment for owners. With the manchise contract, the group trains existing team members to run the hotel as per Citymax brand standards, which reduces recruitment costs.
“It’s really important that owners get a return on investment, so for us it’s important that whichever general manager is in the manchise, we don’t move them out. So there’s continuity and there’s also most importantly, a return on investment because by that time, the owner should be comfortable with the general manager and the return he’s getting,” he explains.
Sharpe reveals that interest in the market has been particularly strong from Saudi Arabia, where the group has up to 14 potential partnerships lined up. Citymax is being cautious however, reveals Sharpe, particularly in selecting owners to sign with.
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“It’s not as easy as putting ink to paper. There’s a whole series of things that we have to go through. For instance, there are some owners we don’t want to do business with for one reason or another. So you have to do your due diligence.
But yes, the interest has been very good. There are owners who have offered us multiple properties ... up to five or six, and there are other owners who have cherry-picked the properties they want to manchise,” he says.
However, despite the interest from Saudi Arabia, Sharpe is wary of how often hotels in the kingdom are rebranded, stating: “It’s unbelievable; they’ll pull one sign down and put another one up without doing absolutely anything to the property — they just change the management contract.
“You have to get Saudi right, otherwise three years or four years down the road, you end up having to change the brand,” he warns.
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