(L-R) Ramsay Rankoussi, senior director business development Middle East & Africa and Elie Milky, vice president business development Middle East & Africa.
Rankoussi says that mid-scale options have been “justified from an investment perspective” as it is financially more efficient. He adds: “There was a gap in the market where there was real demand for that kind of accommodation at that price.”
Milky says there’s been a fundamental shift in the thinking of investors in this region. He explains: “Traditionally, investors focused on the luxury segment regardless of whether it was the feasible option or not. Today more and more investors are telling us that they need to make money. That’s why we launched Radisson Red — we didn’t launch a luxury lifestyle product, we launched an efficient lifestyle select product in the four-star segment. With Park Inn by Radisson, we made the mid-scale product more efficient by answering to the needs of the investor — by delivering higher returns on investment.
“The point here is, we lead the investor to value-engineer the investment that she or he is doing. For instance if a developer wants five or 10 food & beverage outlets, the advice is that maybe they should stick to three or four outlets. That would reduce their risk and their development costs, and that’s just an example of how we do it. It’s all location-related as well. If a location deserves an upper-upscale product like Radisson Blu, we will encourage the investor to go for Radisson Blu and then validate it by a third-party study.”
Rankoussi jumps in and adds: “That’s one side of the equation in what makes an owner choose an operator — the expertise and know-how in delivering a project and building it, and making it financially viable. But what we truly believe in at Rezidor is creating a relationship of comfort and trust.”
He says normally the hotel group signs up for long-term relationships with owners for approximately 20-30 years.
Milky notes: “We have been in the region for almost 40 years now with Radisson Blu Kuwait, and with most of our owners, we’ve got more than one property. This is where we have a track record.” And with this track record, the aim is to have 100 hotels and 20,000 rooms in operation by 2020 across Middle East and Turkey. Rankoussi says: “That [number] is almost existing today because we already have 80 hotels and 20,000 rooms in operation and under development. We have approximately 8,000 rooms in operation and approximately 12,000 rooms under construction, so the translation of this objective is the maturing of our openings.”
He continues: “It’s in line with the philosophy and the DNA of the group; we’ve always been focusing on emerging markets. Rezidor has the most diversified presence in terms of the amount of countries that we are present in and do business in, especially in this region. We are taking the advantage of first-entry mover in certain countries, and we see the potential in emerging markets. And that’s why we see Middle East and Africa as a key growth journey for us; we took the same journey 10 years ago when we entered CIS and Russia and today we are the largest operator there.”
Rankoussi re-asserts that 2017 is going to be a stellar year for the group. He expands: “This is a critical year that determines how we will create an impact in this region. We are almost doubling our portfolio over the next 18 months, with openings this year and the next.
“In terms of development activity, we are concentrating on what is missing, and on the UAE and Saudi Arabia; that’s not going to change. The rest is opportunistic: where we can find the relevance of bringing a hotel in this current environment, especially as the trading environment has not always been the most positive — so it’s also a matter of timing.”
Milky adds: “We are looking forward to the opening of many flagship properties, be it the Radisson Blu Hotel & serviced apartments in Riyadh’s Diplomatic Quarter, Park Inn by Radisson Dubai Motor City, Radisson Blu Waterfront, and more.”
Moving forward, he would like to see a mid-scale Park Inn by Radisson in Doha and a Radisson Blu Beach resort in Dubai, and establish a presence in Amman, Jordan, which is one of the capital cities where the group does not have a hotel. Milky concludes: “This year is an opportunity, not only to double within 18-24 months, but also improve our product offering and increase our brand awareness in the GCC and the Middle East. We’re focusing on what’s missing — we are being more selective and looking at where we need to be.”
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