Profit and product
At the time of opening, Derbas communicated his aim to bring new corporate business to Doha rather than compete for existing accounts. He says that now, there is corporate and consultancy business from Sunday to Thursday and weekend leisure business that “you cannot find anywhere in Doha”.
“This is not an easy segment to attract,” he says of the corporate market.
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“Firstly, it is price sensitive, secondly, you cannot compromise with their loyalty. Remember I said the first time, it is not about getting business from the competitor, that’s not our game. As a brand we’ve created our own market, we have our own business, we went to new destinations.
We were the first hotel to visit the luxury market in China, we went there three times for the Luxury Travel Market, we succeeded in Brazil, in South America. There is plenty of business in those destinations for Qatar to attract.”
The hotel has also made an impact in the market with its F&B offering, arguably providing the impetus for recent renovations and additions from other hotels. Brands such as Hakkasan, run on a management contract, are hard to compete with, and Derbas says the leased Opal by Gordon Ramsay and in-house Astor Grill are now catching up, with an 11th outlet — a terrace project with a lifestyle focus — under proposal.
“In terms of food and beverage offering, the 10 outlets are second to none, nobody in Doha has in one hotel this amount of signature outlets and venues. To be very honest, we created that competition,” he says of the expansion in Doha’s hotel restaurant scene.
The hotel has also launched a bespoke outside catering service, which Derbas says they are “starting to see the fruits of”, and established itself as the “the most expensive wedding venue in Doha”.
“I’m so proud of that and still the demand is there. We have 92 weddings already on the books for the remainder of the year; 22 are royal and each royal wedding is equal to 10 other weddings, in terms of value and PR. There is no room for mistakes,” he says.
So, what impact have these success stories had on the hotel’s performance and profitability? Dersays that by the end of the second year, the hotel was making profit.
“In 2012, which was opening year, we finished at around 30% occupancy. Last year we finished at 45%. In the first quarter of this year we’re at 67%,” he says. “This is what you call stabilised. For a big property like us, with 336 rooms, 67% is a great occupancy level because also we need to create that balance; I do not want a full house every night because I cannot focus on the same service I give at 67%.
“Also, we have a very healthy average rate, we rank number two in Doha for RevPAR, last year we were number five in our comp set,” reveals Derbas. “This quarter [Q1], is the first time since we opened that we have made a profit. We made a profit in terms of exceeding the budgeted profit. We are ahead of budgeted GOP for the first time since we opened.
The business is also maturing, says Derbas: “Our expenses when we opened were crazy, now we start taking all the fat out without impacting the guest experience, so we have become more experienced in what we spend and how we need to spend it.”
Strategies have included centralisation of food purchasing under one executive chef, and a pre-booking system for annual flights for the staff of 55 nationalities.
With business stabilising and an empowered team, Derbas is confident of continued growth for St. Regis Doha and the city itself.
“Each brand will create his own market,” he says of the pipeline, which according to Viability stands at 41 hotels. “I think the cake will be enough for everybody in the next five years, trust me. The golden years for Doha are from this year until 2020.
“You need to go to those emerging markets and try to source business,” he continues.
“For example; we secured a group from Argentina. They came during Ramadan; until now I don’t know why they came in August, its flaming hot outside, there is no alcohol service, they came and they just wanted to sit on the beach. They had a blast and they are coming again this Ramadan. There is business there, you just need to fish where the fish are.”
Stat attack
- 67% Occupancy in Q1
- 92 Weddings on the books
- #2 In comp set for RevPAR
- 336 rooms
- 700 Staff
- 55 Nationalities
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