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Mon 2 Jun 2008 04:00 AM

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Pairing off or going solo? Developers and operators agree to disagree

The region's investors remain divided over how to work with partners, as demonstrated by one panel discussion at last month's Arabian Hotels Investment Conference (AHIC).

The region's investors remain divided over how to work with partners, as demonstrated by one panel discussion at last month's Arabian Hotels Investment Conference (AHIC).

MGM Mirage Hospitality president and chief executive Gamal Aziz said he believed it was essential that any joint ventures were true partnerships, saying that "100% of business" was conducted in conjunction with the firm's partners.

"It's all about involving partners, to employ the expertise and experience that they have in these markets," he explained.

By contrast, MAK Hotels Holding managing director Mohamed Fahmy said only 25% of business was done with partners.

The panel agreed that there were challenges involved in partnerships. MGM Mirage's Aziz commented: "Getting to the right deal takes a lot of working, a lot of compromise and a lot of flexibility".

Nakheel Hotels chief executive Joe Sita added that discussing how a property would ultimately operate could be a challenge.

"In many cases, the [owner's and operator's] interests are aligned on the development side, but there can be clashes on the operation side because operators want as much control as possible," he said. "But we feel we have something to contribute."

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