As Accor opens its eighth Ibis hotel in the Middle East this month, Hotelier debates the growth potential of the economy segment with the experts behind this two-star, limited service brand
Accor Middle East has opened eight Ibis hotels since it launched in the region with the opening of Ibis World Trade Centre back in 2003.
The rate of growth is not exceptional, until you consider that four of these eight hotels opened in 2009 in the midst of the economic crisis and that three more are opening during 2010, when most chains are still a long way from celebrating recovery.
Accor Middle East managing director Christophe Landais said: “2009 was a turning point in Ibis’ presence in the Middle East, with the opening of four properties representing more than 1000 rooms.
We saw the strengthening of Ibis’ presence in Dubai, with the opening of two hotels at Mall of the Emirates and in Al Barsha. In addition to that, Ibis entered two new markets in the capital cities of the region — Muscat in Oman and Amman in Jordan”.
This year, growth continues with the opening of the 280-room Ibis Al Rigga in Dubai in March followed by properties in Manama, Bahrain and Kuwait “bringing the regional Ibis network to10 hotels and 2500 rooms” said Landais.
While the demand for limited service hotels has certainly been highlighted by the recession and its impact on the budgets of corporate and leisure travellers alike, the successful rollout of the Ibis brand is attributable also to the securities it offers owners and investors, said Accor Middle East director of operations Olivier Hick.
According to Hick, Ibis is a “crisis-proof” brand.
“Ibis, being an economic budget brand, structurally everything has to have a great return on the investment for the owners, it has to be an easy manageable hotel in terms of manning and staff, it’s a crisis-proof hotel — it proved that if you had a hit like last year it is easier to manage and we don’t need to take dramatic actions like other brands, because we are already operating on the minimum levels for everything,” said Hick.
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Ibis Al Barsha, Dubai general manager Philippe Montaubin expanded: “The structure of the economy hotels that we have allows us to sustain much better a crisis because we don’t have the same number of employees, we don’t have the same demand from the guests, therefore not the same expenses — so [the three-, four- and five-star hotels] have to drop their rates but they still have the same overheads; they’re going to drop down but they can only reduce to a certain number”.
On average, Ibis rooms rates in Dubai stand at AED 300-320 (US $82-$87) said Montaubin, with the rates displayed clearly at the entrance of each hotel.
“There’s transparency, there’s no secrets and it’s tax and service included and what you see is what you pay,” he said.
“Ibis DNA is we fill up the hotel first and then talk about the prices. So in terms of conquering markets, we go for corporate, we go for leisure, we go for families, depending on the size of the hotel that you have and the location. First we fill up the hotels and then we work on price, contrary to some hotels that want to keep a certain price range,” added Montaubin.
Staffing is an important element in Ibis’s “lean” model, said Bruno Debray, Novotel & Ibis Deira City Centre hotels director.
He said that Ibis hotels have approximately 40 staff for every 100 rooms. So while other brands cut back on manpower during 2009, which meant having to cancel additional services such as airport pick up, that was “not something we had to consider” said Debray, as the hotel was neither over-staffed nor had the promise of luxury service to fulfil.
And as well as benefitting from a lower head count, added Montaubin, Ibis utilises the ‘Player Programme’, which ensures every staff member has a second skill.
“You could be a receptionist and your second skill is as a waitress,” explained Montaubin.
This goes further than cross training and enables the hotel to perform well whether it is under crisis conditions or operating at full occupancy, said Montaubin
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