CEO Interview: HMH's Laurent A. Voivenel

Hospitality Management Holdings CEO Laurent A. Voivenel explains how he hopes to breathe new life into the company by solidifying its GCC base and doubling its UAE presence, while at the same time introducing a new benchmark for budget into Dubai

Having travelled back to the UAE from a trip to Iraq the previous night, towering Frenchman Laurent A. Voivenel, CEO of Hospitality Management Holdings (HMH), squints as the sun streams through the floor-length windows of his Jumeirah Lakes Towers office in Dubai.

The CEO took the operational helm of the Dubai-based company in October 2013, following 13 years with Starwood Hotels & Resorts at properties across Dubai, Saudi Arabia, Jordan, Lebanon, Bahrain, Pakistan and Tahiti.

Carrying on the company’s hallmarks of honesty, integrity and transparency, Voivenel reports directly to the HMH board of directors, comprising chairman, HE Sheikh Faisal bin Sultan Al Qassimi; vice chairman HE Sheikh Mohammed bin Faisal Al Qassimi; and previous CEO of the company, Michel Noblet, who is now president.

Voivenel smiles, plonking himself down on a comfy chair and casually launching into conversation about the deal he was discussing with a developer the day before in Kurdistan.

“We have some potential good opportunities there,” he says, animated. “At the moment everyone is confused because of the media; they’re talking about Erbil and Baghdad and people associate them both with Iraq. Erbil is Kurdistan and it’s pretty well controlled because they know about safety and survival.”

He refers to Erbil as “a hub of security in that region” and even compares the city centre today to Sheikh Zayed Road: “Five years ago it was empty and now buildings are mushrooming everywhere”.

It is clear that Voivenel views Kurdistan in a completely different light to neighbouring Baghdad, home of Coral Baghdad, a hotel he wasn’t able to visit on his trip due to security issues. Since the most recent political crisis began, he admits “the situation is getting a bit tougher and business is way down because people are not travelling”.

Not dwelling on this point, Voivenel lists the big brands heading for Kurdistan such as Marriott and Starwood, and asserts that the goal for HMH is “not to miss the train”.

His ability to do so is facilitated by the comparatively small size of Hospitality Management Holdings.

“I was in Kurdistan on Wednesday and the owner asked me when I could send the letter of intent,” he explains. “I said, ‘tomorrow’ and he asked ‘you mean Thursday?’ I knew the gentleman was negotiating with another company who said they would send him the documents before the end of the month but my letter will be sent before noon today. This is certainly one of the advantages we have over the big names”.

Although the team is made up of just 20, all necessary departments are in place, from distributions to development and revenue management.

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“We may not be as internationally huge as the big names in Dubai but we have exactly the same types of benefits and structure,” explains the CEO. “This is what we’re about; owners do not want to wait three months for an answer.”

Reinforcing the company’s foundations is something Voivenel has tasked himself with following the events of 2011, when these were shaken and almost shattered by the eruption of the Arab Spring, which coincided with the economic crisis. As a result, the company lost eight hotels from its already modest portfolio.

“Things started to slow down, projects that were supposed to take place didn’t; contracts that were signed were cancelled because people ran out of money; others just got scared,” explains Voivenel.

Two hotels in Syria were lost; one of which was a brand new five-star Coral, and the other part of the collateral damage following the bombing of Aleppo’s Silk Road Souq.

Two hotels that were under negotiations in Libya couldn’t be taken forward and hotels in Yemen and Bahrain were shut down because of poor business and staff security issues. A heritage project hotel in Egypt was undergoing an extension, which was then stopped and the hotel was closed.

“We suffered; no doubt about it,” says Voivenel. “We lost quite a few hotels, but nevertheless the company survived and at the end of the day you look at crises not only as bad things but as an opportunity to grow a little bit stronger. Some smaller companies that weren’t organised went bankrupt and died.”

For this reason it is Voivenel’s mission now to solidify HMH’s presence in the GCC, which he says “will be a stronghold for us when it comes to stabilising our financial commitment in order to move forward”.

“When we have that foundation down and solid we can start to export our knowledge to some countries that may be foreseen as a bit more unstable or volatile, which was my main reason for going to Kurdistan,” he adds.

Demonstrating this foolhardiness, the company is also about to open its third hotel in Lebanon; Coral Beirut Concorde Hotel. “We are in Beirut; every single big company is in Beirut. Is it the safest country? Maybe not. If you want to be an entrepreneur at some point you also have to take some risks. You have to minimise the risks but you cannot avoid them.”

Treading forward with caution, Voivenel says he is “growing the path according to a very specific strategy”.

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“You have so much demand, but is all that demand worth it? If the owner doesn’t have the understanding of the brand and starts to interfere, damaging its image, then you can spend hundreds of thousands of dollars rebranding the entire company and identity. Our brand is more important to us that one or two management contracts”.

His prudence when it comes to preserving HMH’s reputation is demonstrated by the company’s recent withdrawal from Coral Hotel Doha due to issues with the owner. However, despite this, Voivenel is keen to re-enter the market when the right partner is found.

The same applies to Bahrain, even though the company lost its Ewa Hotel Apartments back in 2011, and the troubles still haven’t completely subsided there. He also hopes to enter Kuwait for the first time, asserting that the goal for the company is “to be present in all GCC countries by 2020”.

One confirmed new GCC market property is Coral Muscat Hotel & Apartments, set for a Q1, 2015 opening.
Additionally, the group has two Dubai projects in the pipeline; Coral Dubai Sports City Hotel & Apartments, also set to open next year, and another for which, at the time of going to press, no further details could be released.

Increasing HMH’s presence in the UAE, and entering emirates in which the company doesn’t yet have a presence such as Fujairah, Ras Al Khaimah and Abu Dhabi is another key goal, confirms Voivenel.

“Based on the history of the company, we have defined a new strategy when it comes to development. Instead of going to Libya, Syria and Egypt, let’s start by consolidating our foundations and doubling the number of properties we have in the UAE from seven to 14 to build a strong home base. Let’s not forget that we are a Dubai-based company and if we have cash we prefer to spend it here,” he says.

Focusing his efforts in Dubai, and further demonstrating his entrepreneurial spirit, Voivenel is looking to introduce what he describes as “the next star” — the Ecos brand. This will be the first truly budget, international hotel brand in the region, he says.

Launched a few years ago, but put on hold due to the Arab Spring, Ecos is set to provide a new benchmark for economy accommodation in the GCC. The first three projects are currently being considered for the UAE, one of which looks set to be constructed in Dubailand and open in 2016.

“It’s definitely going to be one of the very key brands of the group,” the CEO enthuses. “It’s not a hotel that’s been created for the UAE or for 2020. It is a budget hotel that has been created because we have anticipated the needs of our future customers. It will be much more economical than the Ibis, because we won’t have a pool, we won’t have restaurants, or a gym; we’re going after a different market.”

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Voivenel cites young people and families, particularly those driving over from Saudi Arabia, as a target. “If you look at the number of Saudi cars coming to Dubai, it’s enormous. Families can come and stay in a cheap, modern, clean hotel. Do you want to travel 25 minutes further into Dubai and pay AED600 (US $163) per night, or do you want to stay at Ecos for half the price?”

Ecos Hotels will cater purely for bed and breakfast and the initial project is expected to have 200–250 rooms and just 50 staff.

“Room service for a 250-room hotel requires around six or seven staff; a restaurant would be about 100 so you can drastically reduce staff numbers. We don’t want to reduce the quality, just the number of services.”

And Voivenel is careful to mention that he doesn’t mean overworking a smaller number of staff to cut payroll costs.

“If I could change something I’d like payroll and staff to become part of the asset and not a liability on the balance sheet, for one very simple reason — a beautiful property is nothing without its people.”

This is a lesson Voivenel says he learned during a meeting with an advisor to the Bill Clinton administration in Hawaii, who told him: “Laurent, you have everything to be great, smart as you are; you just have to learn how to be nice to people”.

“The reality was very simple, I had to stop taking myself seriously, but take the business seriously,” he says.
Taking the business seriously for Voivenel means implementing his core values, and never straying from these. He points to a sign on his office desk that reads: ‘Even if it’s my right, is it the right thing to do?’

“For me a value is non-negotiable,” he explains. “Whatever values I have, I don’t negotiate on them, regardless of the cost.

Voivenel highlights the alignment of his own values to those of the company, which under his management continue as those set out by his predecessor Michel Noblet. “Honesty, transparency and integrity — that’s what I want HMH to be,” he says.

Living by these standards is not easy in the Middle East hotel business, but Voivenel refers to King Louis XIV of France as his inspiration for how to deal with people.

“I think you need to keep your friends close but your enemies even closer,” he asserts, with a grin. And this is something Voivenel will continue to bear in mind as he takes forward a company that has had to fight for survival — but continues to stand strong nevertheless.