Do synergies exist?

When a hotel has a third-party concept within its property, are there any shared synergies or opportunities for collaboration? Atlantis, The Palm, Dubai’s Sascha Triemer calls it akin to a marriage, where everyone needs to gel together.

InterContinental Dubai Marina’s James Worthington says he has benefited from this especially in terms of recruitment. With a few people established in Marina Social who have worked on Jason Atherton’s projects before, Worthington has had their input with easing the process forward.

Story continues below
Advertisement

He says: “They’re going to help with the recruitment and so when the restaurant opens you will have the right feel, the right touch. It's not necessarily HR saying ‘Ok you get this, this and this’ — we’ve got these people in place to help move that process forward so when you walk in there it should have a familiar experience to London. It’s just making sure that HR, the team from the hotel and the team from Marina Social all work closely together.”

However, it depends on the kind of agreement signed. Hilton Worldwide’s Marc Gicquel says when there is a lease concept, it’s like a totally different company, which has a separate P&L and recruitment drive. “There are so much less synergies than a franchise,” he adds.

Gicquel continues: “It depends on the set-up. If it’s a rent, there are limited synergies in the sense that it is two different companies, two different P&Ls, two different teams, different recruitment. If it’s a franchise, that’s the same back-of-house, the same team, the same P&L. It’s just that there’s a franchise fee to be paid in exchange for some guidelines and some brand support, so there’s much more synergies with the franchise set-up than you can have with a pure rent.”

Maadad concurs: “IT, sales and marketing, everything is centralised with a franchise, everything is basically the hotel’s responsibility, whereas with a lease you’re on your own. You pay a rent and you run your business.”

Julien Besancon, cluster F&B manager, Hilton Dubai Jumeirah Resort and Hilton Dubai The Walk, also says there are some synergies around “how we sell the outlet as well because it is part of our F&B portfolio”.

He adds: “We are selling the other outlets in our operation and we also expose the outlets in our social media platforms so there is a synergy there. It’s not just the cost side, it’s synergies in how we sell and promote the outlet.”