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Mon 31 May 2004 04:00 AM

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Cheaper costs, less frills

Business travellers are likely to be spoilt for choice after Express By Holiday Inn enters GCC hotel market.

Business travellers in the region are set to see a swing towards the economy hotel market after Intercontinental Hotels Group announced it would roll out 30 Express by Holiday Inn Hotels within the next seven years across the region.

The investment in the project will top the US $400 million mark with $200 million invested in the Saudi market alone by the Saudi Real Estate Company.

The Express brand targets price conscious business and leisure travellers looking for short-term stays. The average room rate for the GCC will be around the US $65 mark.“This product is not targeting tourism, it is targeting your business economy traveller who needs convenience, technology and a consistently clean product at reasonable rates,” says Chris Maloney CEO, Intercontinental Hotels Group, Middle East and Africa.

Primarily targeting the GCC, the hotel chain plans to open 20 Express properties in the first five years with 12 openings in Saudi Arabia. First on the list will be Dubai, Jeddah and Riyadh by the end of 2005.

Rather than the most popular downtown areas, Intercontinental will look to open at airports, transportation hubs and commercial areas in order to highlight the business aspect of the hotels. Budget hotels are one of the fastest growing trends in the global hospitality sector.

By centralising the various administrative departments and streamlining operations at each of the hotels, Maloney believes returns for investors will come within two to three years.

The recent arrival and relative success of low cost carriers in the Gulf also suggests the budget hotel market has come at the right time. “It shows there’s a market for the cost effective, especially with the emergence of a middle class in the region and increased pan-Arab travel,” says Maloney.

However, Express is not the first economy hotel to open across the Middle East. Last year, Accor brought its lower scale Ibis hotel to Dubai. Rather than unveiling a host of properties, the French hotel group remained cautious in opening just the one.

“Our desire was not to launch just one property,” says Maloney. “We were looking for a partner who wanted to launch multiple properties as we feel it’s critical to establishing the brand in the GCC.”

Business travellers are likely to be spoilt for choice as Accor is also set to unveil 27 hotels across the Middle East, among them Ibis properties.

According to Maloney, Express will aim for 70% occupancy rates. The design will also cater specifically for the local market with rooms slightly larger to accommodate bigger families.

Despite the region’s volatility, Maloney is keen to point out Intercontinental’s commitment to the Middle East.“There’s no crystal ball, but we tend to put a realistic model together based on the last ten years. For us the key is to sell this product to pan-Arab travellers, so we won’t be marketing these hotels internationally,” concludes Maloney.

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