The view from the AHIC Advisory Board

Bench Events chairman Jonathan Worsley highlights the key issues and important topics that are expected to be addressed at next year’s Arabian Hotel Investment Conference in Dubai

I must admit that I enjoy our annual Arabian Hotel Investment Conference (AHIC) Advisory Board meeting almost more than AHIC itself. It is, of course, a low key and less hectic affair, but it really is a unique insight into the state of the industry from the very men and women who are shaping it. We are privileged to be able to bring together an advisory board of more than 40 members, which includes around a quarter of the Hotelier Middle East Power 50 (not all of whom were able to be with us on the day).

A selection of those who joined us at The Emirates Academy of Hospitality Management (EAHM) for the meeting included Richard Riley, CEO of Abu Dhabi National Hotels; Paul Bell, managing director of Aldar; Marc Dardenne, CEO of Emaar Hospitality; Wael bin Ahmed Al Lawati, CEO of Omran and HE Sheikh Mubarak Abdullah Al Mubarak Al Sabah, chairman of Action Hotels.

There were also representatives from Egypt, Kuwait, Morocco and Saudi Arabia. However, their interest was even more widespread with Libya, Afghanistan, Iraq, Syria and Iran deemed as of key interest to our Advisory Board. It was a true indication of how the scope of hotel investors is now truly regional compared to even three years ago; when the majority of members and discussions were focused around the UAE.

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Now onto the interesting stuff; what was top of mind for these industry leaders? Being a closed door meeting I am not at liberty to divulge names, but suffice to say that the large representation of owners and investors kept the operators on their toes. Without a doubt, ‘owner — operator’ relations were a key issue, with owners putting forward that operators have become more interested in protecting their brand rather than their owner’s investment.

Nothing new there, but given the increase in the variety of brands available in the region, it raised the question of how operators will keep their owners ‘faithful’. It was fascinating to see how the ‘power seat’ has well and truly shifted to that of the owners; a contrast to years gone by. The bottom line for operators, be aware; owners are more demanding than ever and expecting their assets to perform.

What everyone agreed on was the difficulty in raising finance and the problems created by a lack of liquidity in the market. Obviously there is no easy answer but it is interesting to see that throughout the region, everyone is facing the same dilemma. This brought us to the need for the industry to do a bit of ‘PR work’ to rebuild confidence, particularly with the increasing supply coming online (Abu Dhabi an example) and the resulting drop in occupancy and RevPAR.

Preceding the meeting, the students of EAHM were treated to a presentation by Jalil Mekouar, executive vice president of Jones Lang LaSalle Hotels, on the state of the industry. His message was that we are moving in the right direction “with hotel transactions up 41% on 2009, arguably the worst year ever for the investment community”. He continued: “the uncertain economic outlook will continue to have an impact in the short term, but the region remains an attractive destination for investment and the market remains robust for astute investors looking to potentially access medium to long term returns.” Now if we could just get the bankers to believe that this is the case!

Interestingly, retaining and attracting qualified staff came through as a key issue. This year’s meeting provided insight into the next generation of leaders in the hotel industry. The Advisory Board was broken into groups and each was assigned an EAHM student. Watching these final year students boss around some of the region’s most powerful men and women was amusing to say the least. The informed perspective from students was enlightening for all. It also indicated what a great job Ron Hilvert, managing director of EAHM, and his team are doing to help ease the ongoing issue of a ready supply of local talent. No doubt we all will soon be working for them!