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Wed 30 Nov 2011 11:00 AM

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Hard Rock Cafe resuscitates plan for MidEast hotels

US hospitality chain plans to open three branded properties by 2018, says CEO

Hard Rock Cafe resuscitates plan for MidEast hotels
Hard Rock International operates 15 hotels worldwide

Hard Rock International, the US café and hotel chain, will kick-start a stalled plan to launch branded hotels in the Middle East as it moves to broaden its portfolio, its CEO said Tuesday.

The Hard Rock business, which operates 15 properties worldwide, said in 2007 it would roll out hotels in Dubai and Abu Dhabi, but the plan was put on ice after the onset of the global crisis.

The US chain is now eying a portfolio of 40 hotels by 2018, to include a trio of properties in the Middle East. The UAE, Qatar, Egypt and Beirut are all potential locations.

“Given the global economic situation, one or two companies have paused for breath before making huge hospitality-related investments. We were pausing for breath but now we’re starting to move forward,” said Hamish Dodds, President and CEO.

“Strategically nowadays, we are not just focused on cafes but much more focused on hotel opportunities and casino opportunities. We felt we could probably get around 40 hotels by 2018. It would be nice to think that two or three would be in the Middle East.”

Privately-held Hard Rock, which was sold to the Seminole Tribe of Florida in 2006 in a deal worth $965m, this month launched its new restaurant in Dubai’s Festival City, after more than a year of delays.

The new outlet replaced the original Hard Rock Café on the emirate’s Sheikh Zayed Road, which was forced to close after 11 years of operation following the sale of the site.

The restaurant’s owner declined to specify the reasons behind the delayed launch of the new café, but alluded to tightening bank credit in the wake of the financial crash.

Dodds said it was a “complicated process”, made worse by “a difficult economic situation where banks were reluctant to lend”.

The new 26,400 sq ft Dubai cafe, the largest in the firm’s Middle Eastern and Asian portfolios, includes seating for more than 350 guests, a bar, convertible live music space and a 2,500 sq ft Rock Shop. Owners are targeting revenues of $8-10m in the first year of operations.

Franchisee Hard Rock Middle East, which operates six outlets in the region, plans up to five more cafes in the next three years, and to upgrade its existing assets.

It is likely to hire at least 250 new staff for the expansion.

“If we look at Doha, that might be a 12-month programme; we’re looking at Jordan and that might be a two-year timeframe. In Muscat, in Oman we’re still considering whether the market is ready for us,” said Dodds. “We’re also looking at Jeddah at the moment in Economic City. It’s a very preliminary assessment but a lot of the American brands have done well there.”

The firm is planning to upgrade is existing restaurants in Bahrain, Beirut and Cairo within the next two years, he said.

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