By Louise Oakley
Hospitality Management Holdings CEO Michel Noblet speaks to Louise Oakley about going it alone and why, at the end of the day, the hotel business is simply show business
In 2001, Michel Noblet made a bold move. He stepped down from his role as managing director for the Middle East at Le Méridien, a brand he helped found 30 years previously and worked with for three decades - 25 years as a GM and five in senior corporate roles. Two years later, he launched the Coral Hotels and Resorts brand with the opening of Coral Beach Resort Sharjah. Fast forward seven years and today, under umbrella firm Hospitality Management Holdings (HMH), Noblet is responsible for 30 operating hotels and four unique brands. Plus, there are 15 hotels scheduled to open this year, and numerous others in the pipeline.
The figures alone are testament to the success of HMH’s hotels, but nevertheless, back in 2003 Noblet took a big risk. So what made him decide to leave a brand he had grown from scratch, for which he had opened 80 hotels - 50% of the portfolio - and start all over again?
“That’s the beauty of challenging yourself,” explains Noblet. “I spent 30 years with my company so I reached, let us say, the position I was looking for. That’s when I said, look let’s turn the page, let’s do something else, that’s why I decided to open this company. The challenge was high, nothing is easy, but it was exciting.
“I was based in Dubai and my idea and philosophy at that time was to try to develop business with the people of the UAE. I had strong experience here, knew the people and had a strong network. I have the best partners possible, they are very well known - H.E. Sheikh Faisal bin Sultan Al Qassimi and H.E. Sheikh Mohammed bin Faisal Al Qassimi,” reveals Noblet.
Still, he was launching a company in a market already populated by international brands, so, at the time, what was the plan to stand out?
“When we decided to develop this business, as with any business, you need to be distinctive. My vision was not to be necessarily in competition with my dear competitors and colleagues, but to try to develop a niche market, which was at that time the non-alcohol segment. We are not shariah complaint, our philosophy is very basic, no alcohol in any of our hotels, and no pork. So at that time we were the first, today you have many companies offering a safe environment, no alcohol, etc.”
One might expect that this would mean a target market of GCC residents, but Noblet quickly dismisses that. In fact, he says, the client mix is 90% international - from Asia, America and Europe - and only 10% from the GCC.
“What you have to understand is that with any client, they don’t select a property because there is or there isn’t alcohol, their motivation is to find a good product, comfort, good service and security so this is basic but it works,” explains Noblet.
He adds, however, that the alcohol-free offering does appeal to many corporate clients, looking to send their top executives on important business and that the safety aspect that runs in parallel with a property without bars or clubs, also reassures business women travelling alone.
Indeed, all guests need to feel comfortable, relaxed and recognised, says Noblet, and creating this relationship with guests and retaining clientele has been his main motivation from the outset.
“The cost of the acquisition of the client is so expensive, so it’s better to do it right from day one. It’s not an easy job - our business is very emotional, psychology is very important,” says Noblet.
“They way you treat a client, the way you interact, they way you talk to him, the way you solve a problem is so important. Sometimes you have a client who is going bananas or is so upset - the manager must find a way to reverse the trend and to make this guest your best friend. It happens so many times. Sometimes little things make a difference.
“The main problem is to leave the client unhappy. And to regain his confidence - phew, that’s a big job. Then you have to invest a lot of money. Then you have to make some compensation, at the end of the day it is very costly so it is better to do the job properly.”
To ensure the job is done properly depends of course on having a good team, which Noblet says comes down to getting the hiring right. The hotel business is like show business, he says - guests are buying a dream, buying style, service and fun. So staff have to smile, look good and be interactive - it’s certainly not just a case of “standing like a stupid idiot pouring tea and coffee”, asserts Noblet.
Therefore, it’s the responsibility of each HMH employee to have the right attitude and of the management, the GMs in particular, to empower them to be able to fulfil this dream for the guest.
“The general manager has the obligation to meet each employee during the hiring process. Each employee walking into his property has to go and met the GM - it’s psychological, the guy feels important.
“When we have employees coming to Dubai for training from other destinations, I always insist that the GM tells them that everybody is welcome to come and see us at head office. We want the people feeling welcome. When we do that, when I see somebody coming here, I feel good whoever it is, not necessarily the executive, it’s about the people contributing to the success of the company at any level.
“I love it, I tell you for me it’s very important. These guys can make the difference, what I like is people taking the initiative and being empowered,” says Noblet.
That’s the guests and the staff covered, but what about working with owners? HMH has grown in parallel with the development of hotels in Dubai, which picked up pace year on year up until the recession took hold. But over the past few years, Noblet has noticed a shift in the way owners and operators do business. As far as he is concerned, the ball is now firmly in the owner’s court.
“First of all, they know their business,” asserts Noblet. “Before, in terms of hospitality, they were discovering it. Today they know better than the professionals, so their expectation is extremely high. They understand all parameters, average room rate, revPAR, GOP, NOP; they know what bookingonline.com is, what a CRS is and what a CRO is.
“You cannot fool the owners. So as a hotel management company you have to impress them. This is not from time to time, this is every day; they need to make sure that you are doing your job properly. You protect their name, their reputation and their asset in terms of business, as well as in terms of market value of the property,” says Noblet.
“There’s no point in having a property if you don’t maintain it. If you don’t maintain it then the market value after so many years [falls], the owner has to cash out and it costs millions to change everything, the chillers, the boilers, the laundry, the kitchen - in those cases the operator definitely didn’t do his job properly,” he says.
As with its guests and staff, HMH’s success in terms of securing new management contracts - by the end of 2011 it will have 44 hotels operating in the MENA region, plus one in South Africa - comes down to relationships. These have been developed thanks to the sheer determination of Noblet and the team.
“I think the success of our company is down to our determination. We have a very strong loyal team. Most of our key executives have been with us since the creation of our company. So there is a kind of stability. Our business model is very simple due to the fact that we have international experience and regional experience - the blending of the two is quite positive for us.
“Our success goes through the fact that we are Dubai-based, and when we go outside of Dubai we are exporting the Dubai business model, which I think is the best in the world The city is very much business oriented, people living in Dubai are very much excited and motivated by whatever they are doing and people take us very seriously, automatically your positioning is different,” says Noblet.
This could be even more important in the future, as Noblet reveals that he is currently looking at potential developments in Asia, a continent he is very familiar with from his tenure as managing director for Asia Pacific with Le Méridien.
However, despite the 15 hotels due to open this year - which will total 2400 rooms and make up 40% of supply - huge growth is not top of Noblet’s agenda.
“I’m not looking to be recognised as the guy that has the most hotels, this goes above my head, I am not interested. My obligation is to make my people feel good, to fulfil my commitment and my obligation to my partners and owners, to make a clean business and to have a kind of self satisfaction. If the people are happy, I’m happy. That’s the way I identify myself,” says Noblet.