Selim El Zyr is clearly in a good mood. Sitting in the penthouse suite of the Abu Dhabi hotel where it all began, the boss of Rotana Hotels is rattling off the jokes. On taking the firm public one day: “It’s like the agenda of every girl to get married, and the agenda of every Maronite in Lebanon to become president”. On his eventual retirement: “Maybe in another 40 years?” And on launching in Bahrain later this year: “The suffering begins in March,” he says, with a wink.
If El Zyr seems relaxed, he has good reason to be. Only 20 years since he co-launched Rotana alongside chairman Nasser Al Nowais, the chain has 46 hotels in operation across the Middle East, with another six due to open this year. When he hands over the reins to his successor at the end of 2013, Rotana will be overseeing roughly 100 hotels, either in operation or under construction. It’s the kind of growth rate that could soon see Rotana take its place in the pantheon of the Middle East’s few global brands, alongside Emirates and Al Jazeera.
But behind the genial exterior, El Zyr is every inch the professional.
“In business, there is no such thing as a trajectory all the way up,” he says, when we discuss the political changes that have swept the region over the past two years. “So this [investing] is a risk every businessman takes, and every businessman that makes a 10-15 percent return on investment is legitimate.
“People shout ‘that guy’s making 10 percent’ – of course! When I have to take the risk, I have to work day and night, I have to sustain losses if need be. Otherwise everyone just puts their money in the bank and there is no more business for anyone. So who is going to create jobs? It’s us – the investors.”
When it comes to contributing to the economy, few are doing more than Rotana. It has created thousands of jobs in almost every country in the region, and has refused to shut up shop or mothball any property, despite unrest bringing occupancy in some hotels down to as low as 10 percent in Syria.
Overall, El Zyr says that the group was “about 8 percent above 2011 in terms of end results” last year. It was dragged down by the countries affected by the Arab Spring, but that was more than compensated by the performance of new hotels, and by the rebound in Dubai — which El Zyr refers to as “the best in the neighbourhood”. Occupancy rates in the emirate sit somewhere in the mid-80s, and have stayed high despite the introduction of another 4,500 rooms during 2012.
The Rotana CEO also says he is excited about the slew of megaprojects that have been announced by the Dubai government in the last few months. Top of the list is Mohammed Bin Rashid (MBR) City, a sprawling development that is estimated to cost as much as much as $110bn. Included in the project are plans for an extra 100 hotels, but El Zyr says he isn’t worried about whether the market will be oversupplied.
“They are speaking about a period of time,” he says. “I think the growth of supply in Dubai has been extremely well managed – it has been orchestrated in an extremely professional way. Now if you dump 100,000 rooms onto the market, it will be a disaster. But these 100,000 rooms, if they take ten years to come it will be good, because the growth of Dubai has been unbelievable.”
Dubai hoteliers may be licking their lips at the prospects for this year, but the same is not the case an hour or so down the road in the UAE capital. Abu Dhabi’s market has been characterised by a logjam of high-end properties, all of which have launched at a similar time. Amid cutthroat competition, operators have been forced to slash rates in a bid to keep market share.
Rotana, which is based in Abu Dhabi, has had its fair share of problems, especially as occupancy rates in the city sit at around 68 percent. At the same time, however, it is working on adding an extra two properties in the area. “It’s more challenging,” admits El Zyr. “But it’s the same as every market in the world — it’s not easy any more. One of the things one has to do in a competitive market is assess prices and keep on comparing them with competitors. People will not only pay for the brand, people want a better deal.”
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