Hilton Hotels will focus its Middle East business development strategy on Saudi Arabia this year.
The company’s vice president development Middle East, Elie Younes believes the KSA market, where it plans to roll out the first Garden Inn branded properties to enter the Middle East, is more resilient to the financial crisis.
“For a number of reasons, including the current climate, it would make sense to focus on Saudi Arabia today,” he told Hotelier Middle East.
“Saudi Arabia is definitely a sufficient market - it is more recession-proof than others.”
This is reflected in the content of the forthcoming Arabian Hotel Investment Conference (AHIC) from May 2-4, which will feature a Saudi Arabia summit on day two, led by HRH Prince Sultan Bin Salman Bin Abdulaziz Al-Saud, President and Chairman of the Board, Saudi Commission for Tourism & Antiquities (SCTA).
One of the panel sessions is entitled How to succeed in Saudi Arabia, with a focus on what the challenges are of investing in Saudi Arabia from a hotel industry perspective.
Hilton Hotels will open its first Garden Inn in Riyadh this year, followed by another in the KSA market within the next 18 months, according to Younes.
“Our geographical focus this year will mainly be Saudi Arabia, Abu Dhabi and some parts of the Indian Ocean and the Seychelles,” he revealed.
He stressed that in terms of investment, Hilton, which had recently formed a Middle East development team, was looking to identify owners with both money and access to land.
“So it has to be a local owner in each market,” he said.
“It is difficult to find a Saudi Arabian investor doing these types of transactions in Abu Dhabi. So we would be looking to try and find these kind of people on the ground in the respective markets.
Younes said there was still a “big gap” in terms of where Abu Dhabi was today and where it wanted to be in terms of its “master plan”, meaning there were opportunities for Hilton to fill this void with hotel product.
He also noted that while investors were much more cautious about investing during this climate, on the plus side, construction costs were decreasing.
“Developing a hotel today is 25% cheaper than yesterday and by the time it is constructed it is three years from today when all this recession will be done,” Younes concluded.
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