Majid Al Futtaim CEO for hotels wants more third-party operator concepts in the region

Majid Al Futtaim – Properties chief executive officer – hotels, Jalil Mekouar stated during a panel discussion at the ninth annual Hotelier Middle East: Great GM Debate 2018, that he welcomes the concept of third-party operators in the Middle East region.  

The panel discussion highlighted the issues arising for owners from booming mergers and acquisitions of hotel operators (M&A) in the region. While the M&A have obvious benefits for the operators, it signifies a change of management hands for owners who don’t necessarily see it as good news.

To contend with the growing number of M&As, Mekouar stated he welcomes the concept of third-party operators for properties as this could benefit in holding a long-term successful relationship with the operator of choice for owners but affording flexibility in terms of the management of the property.

“Before being disrupted by a third-party operators, let’s disrupt it ourselves,” noted Mekoaur exemplifying the large rate of successful third-party operator model in the US where nearly 85% of the hotels are franchised according to a study by HVS, a hotel consulting and services organisation.

Overall, Mekouar believes that third-party operators will help retain the brand value of the operator while also providing owners “a six to nine month” trial period to see if the interest of the third-party operator aligns with that of the owner.