Teeing off in Morocco

With a raft of development projects around the country, authorities are hoping Morocco will become a destination of choice for beach, golf, spa and luxury travel. Kathi Everden assesses the viability of hotel operations in the new hotspot

International flight numbers have doubled in six years to reach a weekly total of 1200, visitor arrivals are expected to top nine million in 2010 and at least 80,000 more hotel rooms are planned — healthy enough figures perhaps to justify Morocco’s designation as one of the ‘hottest markets for 2010’ in the recent Jones Lang LaSalle Hotel Investment Outlook report.

Indeed, rated number one for tourism business environment in 2010 by Business Monitor International, Morocco seems to exemplify the advantages of a sustainable government strategy that has wrought tangible benefits through the implementation of a cohesive plan encompassing infrastructure and human resources development as well as incentivising private sector investment.

Buffeted by the cool winds of the global recession in the past two years, some projects have foundered, but with government backing, there is renewed vigour among the survivors, and a successor to the initial Vision 2010 Plan is expected to be revealed this autumn to keep up momentum.

The original strategy aimed at tripling hotel capacity and included Plan Azur, with six beach destinations allocated to international developers — at Mazagan, Saidia, Mogador, Lixus, Taghazout and Plage Blanche — plus new resorts at Chbika, Tamuda Bay and Cala Iris. In total, these will add nearly 140,000 beds.

In addition, under Plan Mada’in, nine existing tourist destinations were scheduled for upgrade and expansion, including beach resorts at Tangier and Agadir, the imperial cities, Casablanca, Marrakech and Ouarzazate, while rural, adventure, sports and domestic tourism were also given priority to spread the benefits of tourism around the country.

Along with this ‘bricks’n’mortar’ strategy, the government has also implemented an open skies policy with Europe, encouraged the expansion of low cost airline services, allocated extensive budgets for airport, rail and road construction, and expanded training institutes for human resources.

Indeed, the Gulf’s Air Arabia has flown straight in to the market, establishing a hub at Casablanca last year and is already offering flights to 12 cities in Europe.

“We will be adding more routes and frequencies in the near future”, says CEO Adel Ali. “Our base is currently in Casablanca, but we will be looking at opportunities that exist from other cities as we organically grow.”

All of this has contributed to an arrivals total of 8,341,000 for 2009, a figure expected to top 9.4 million in 2010 according to Omar Bennani, CEO of the Morocco Tourism Development Agency (SMIT).

“Vision 2010 was a real success — 9.4 million tourists in 2010 represents 94% of our objective while we also reached 80% of hotel bed capacity objective, increasing from 90,000 to 185,000 beds,” he says.

“Tourism income for Morocco jumped from US$3.2 billion in 2001 to nearly $6.6 billion in 2007, and this healthy tourism environment encouraged many investors including Emaar, Qatari Diar, Alain Crenn Group, Orascom, Gulf Finance House, Kerzner and CDG Group,” he reveals.

Emphasising the concrete success of Plan Azur, Bennani says that Mazagan and Mediterranean Saidia were already up and running and it was planned that the first hotels would open at Mogador by the end of the year.

“This success has encouraged investor confidence with plans duplicated in other resorts — Laguna Smir, Fitnit and Dakhla,” says Bennani, adding that Vision 2020 would be as ambitious as Vision 2010, with continuation of launched projects and preparation of new ones.

“Sustainable development really will be at the centre of the new strategy, with all its components — economic, social, cultural, heritage and environment — allowing Morocco to develop its assets with real added value and differentiation.”
For the moment, investor sentiment is very much on the side of the authorities, applauding what is seen as one of the more enlightened approaches to the market, according to Chiheb Ben Mahmoud, SVP MENA for Jones Lang LaSalle Hotels.

“Morocco has carved a niche for itself on the global and regional tourism and hospitality investment landscape,” he says. “By moving to address the challenges of the new post boom financial environment, the country has emerged as a mature hotel investment market ... while the pace of development has slowed, a lot has been achieved over the past years.

“It has a sophisticated, deep and mature financial sector that supports hotel and tourism development and it is one of the few emerging countries with hospitality funds — the financial sector mechanisms and approaches to the sector are diversified and nuanced and this has helped to address the challenges of the regional and global post boom correction.”
Ben Mahmoud stressed that while no investor had exited the country due to a lack of (governmental) support, the market did operate on conventional commercial terms.

“It is not an industry under life support, a result of pure subsidies and financial incentives,” he adds.

Expanding on what was on the table, SMIT’s Bennani said that private developers qualified for a range of incentives.
“Morocco offers attractive land prices in areas that are covered by Plan Azur, plus subventions for other land acquisition, external infrastructure and training as well as exemption of import duties and VAT for investors and reduced corporate taxes for hotel owners.”

Meanwhile, existing hotels are reporting a turnaround in occupancies and rates, indicating Morocco has climbed out of its relatively shallow recession dip and setting the scene for growth to come.

According to CEO of the MKG Group, Georges Panayotis, stability of rates and demand during the financial crisis underlined the resilience of the Morocco product.

“Demand was somewhat affected by the crisis in the early stage of 2009, forcing hoteliers to reduce rates. Numbers returned but the consequence was a lower revPAR for the most part,” he says.

“The increase in occupancy continued in to 2010 and hoteliers have now begun to raise their rates — year-to-date revPAR in May 2010 grew by 3.7%, spurred by a three-point increase in occupancy and relatively stable prices.”

But, with a panoply of industry names set to debut, particularly in Marrakech, the question must arise as to how demand in the luxury sector can be ignited to justify expansion of the product in to the upper echelons of the travel sector.

The name game...

To a degree, Marrakech has been nurturing its future as an ‘A’ list destination for many years, with an iconic hotel that attracted the rich and famous throughout the 20th century – it was to La Mamounia that Winston Churchill allegedly referred as ‘the most lovely spot in the whole world’.

Scrubbed up and reopened after a multi-million dollar refurb, the property is set to compete against the world’s best as hospitality legends pile in to the city and its environs in search of the rich and famous, each with a USP designed to woo today’s luxury traveller.

The roll-call is impressive, from Mandarin Oriental, Baglioni, Rocco Forte Collection, W Hotels, Oberoi, Four Seasons and Park Hyatt through to newcomers such as The Address and Jumeirah and established hospitality giants InterContinental, Marriott, Park Plaza and Radisson Blu – altogether, some 1500 rooms in the five-star category are due to open within three years, according to recent data from JLL.

Some projects have been mothballed, with Raffles, Fairmont , Banyan Tree and Anantara going quiet on their plans, but the fall-out is to an extent giving those remaining breathing space to gird up for business, according to Alistair Emery, CEO of developer Ajensa, where Baglioni, Six Senses Spa and Jade Jagger villa designs are part of the package.

“Our project has not been affected, but we have benefited as a few resort plans have stalled,” he says. “The last 18 months have not been the ideal time to launch, but Morocco has not suffered as much as other countries and the location so close to Europe, while offering a different cultural experience, has helped.”

The Ajensa project, opening late 2011, claims space as its USP, aiming to attract a VIP clientele with exclusive villas and extensive facilities.

“We offer a boutique resort with just a few villas serviced by this hotel, set in 13.5 hectares,” says Emery.

“Many new developments now feature 200+ room hotels with golf courses, etc which is more mass market style.”
Also navigating the upmarket residence route is Four Seasons which has a 140-room hotel with 43 villas and riads readying for opening in early 2011, and general manager Jean Claude Wietzel reveals that all residences have already been sold to individual buyers.

“The entry of Four Seasons in to any market brings instant credibility and access to the hotel facilities and services were key selling points for the Four Seasons branded residences,” he says.

Dismissing the threat of too many, too soon, Wietzel says development in Marrakech was part of a plan that would bear fruits for all.

“We are basically still near the beginning of a long-term strategic government plan to position Marrakech as an exclusive, high-end destination and the addition of competitors is planned for and welcomed.”

New markets such as Asia and different sectors such as premium family travel were suggestions for broadening source markets, while others include Russia, the US and the Middle East, according to Patrick-Denis Finet, general manager of the new Mandarin Oriental opening in 2011.

“The arrival of Mandarin Oriental will enhance the awareness of the location as a luxury destination, helped by the number of luxury hotels scheduled to open in the not too distant future,” he says. “The city appeals to a fashionable crowd of sophisticated travellers.”

The eagerly-awaited resort is set in 53 hectares in the Palmeraie region, offering access to Marrakech and the mountains, while positioning as an exotic retreat with riad-style accommodation, spa and restaurant facilities is indicative of the trend towards stand-alone destination resorts.

Rocco Forte Collection is heading in this direction at Assoufid with a golf course, tennis and spa as well as residential villas coming soon; Jumeirah is planning golf and polo; Park Hyatt has golf as an USP; Jawhar resort has a spa and wellness resort with villas; while The Address will debut with hotel, villas, wellness villas, polo fields and tennis facilities.
According to CEO for Emaar Hotels, Marc Dardenne, this first foray overseas is also the first retreat property developed by the company, and as such will set new standards.

“The Address Jnan Amar Marrakech is setting a new niche in the industry with The Address philosophy of offering tangible guest benefits matched by superior service standards and a great locations — we expect occupancy levels to be strong from inception.

“The resort will have five focal areas — cultural, business, meetings and incentives, health and well-being and sports and recreation,” he adds.

But, while the big names have been drawn to Marrakech as a launchpad, many are also looking at other developments and areas, with The Chedi and Banyan Tree signed up for Tamouda Bay, Anantara in Mogador, Hyatt in Lixus and The Address announcing Tangier, for instance, while the bigger groups are multi-focused with Accor extending its network with openings in Mogador, Agadir, Tangier and Casablanca.

At Starwood, VP for MENA acquisitions and development, Neil George, cited the tourism infrastructure, planning and marketing as key reasons for entry in to the market.

“We believe the Casablanca market could benefit from our Westin or Four Points by Sheraton brands ... we would also like to have a hotel in the capital Rabat where Sheraton could be a great fit, and leisure destinations such as Tangier and Essaouira also represent a great opportunity.”

The group has a 150-room W Hotel opening in Marrakech next year, offering villas, golf and the W pizzazz, but George confirmed the group was in active discussions for various projects across the country.

Just how successful the import of a name can be was exemplified by the opening of Kerzner’s Mazagan resort last year, since when occupancies have been growing exponentially, according to Emmanuel Comble, executive sales & marketing director.

“It is a Sol Kerzner tradition to launch projects with big events that attract attention, and this was no exception ... Mazagan is now one of the iconic properties in Morocco offering a new concept of affordable luxury within gigantesque spaces, and we have seen 100% occupancy during several periods this year,” he says.

As the country’s first integrated resort — with a 500-room hotel, Gary Player golf course, ESPA spa, casino, 2000+ conference centre, Sanctuary night club, residential villas, and all beach and leisure facilities — Mazagan is aiming across the board for visitors, he adds.

“The meeting and event sector is an important element for instance, with groups already received from the UK and France as well as locally — we anticipate 50% of group business for leisure and corporate, and 50% individual clientele in future.”
While the main challenge has been to promote an unknown destination in Morocco, Comble said another aim was to translate the natural hospitality of the local staff in to international service standards.

“In 2010 alone, we have invested more than one million euros in the training of employees,” he says.
SMIT’s Omar Bennani emphasises the commitment to get this right.

“The tourism department has formalised a strategy to accompany job creation between 2008 and 2012 — this foresees the training of around 62,000 graduates nationwide in the sector of hotel business by 2012.”

Project Round-Up

Saidia — FADESA. On the Mediterranean, 17,000 beds are planned with beach as the prime attraction, as well as golf, spa and marina facilities.

Mazagan — Kerzner, SOMED, CDG, MAMDA and MCMA. Less than one hour from Casablanca, the site stretches nine miles and includes golf and conference facilities, with plans for 7600 beds.

Mogador — Thomas & Piron, l’Atelier, Colbert Orco and Risma. Near Essaouira on the Atlantic, it will feature 10,600 beds and at least three golf courses.

Lixus — Thomas & Piron and Orco. Around 12,000 beds are on the drawing board at this resort, an hour from Tangier on the Atlantic where the major focus will be on golf courses, an equestrian centre and marina as well as beaches.

Taghazout — Colony Capital and Satocan. North of Agadir, beach is the draw here with 18,000 beds in the pipeline.
Plage Blanche — FADESA. Some 19,500 beds are planned and eco tourism will be a focus amid the beach and dune coastline with an ecological park planned as well as golf course and spa.

Oued Chbika — Orascom. Located in the south between the Sahara and the Atlantic, the first phase will comprise eight hotels with 2,500 rooms, real estate, marina, golf course, congress centre, sports centre, spa and restaurants and retail.

Tamouda Bay — eight hotels and four golf courses planned.

Casablanca — marina, golf course and associated hotels are planned under a regional redevelopment scheme to double bed numbers to 20,000.

New terminals are underway at Casablanca, Marrakech and Oujda airports; a high-speed rail network is planned between Casablanca and Tangier, more than halving journey time to just over two hours.