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Mon 7 Jun 2010 10:24 AM

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Selim El Zyr

He founded one of the region’s most successful hotel chains and now he plans to build 100 more in the next three years.

Selim El Zyr
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Selim El Zyr
Eye on expansion: Rotana has 36 hotels in its portfolio and plans to expand the brand to over 100 across the Middle East and North Africa region within the next two to three years.
Selim El Zyr
Pure luxury: The Cove Rotana Resort is located on an idyllic water inlet on the Ras Al Khaimah beachfront and is an ideal destination for leisure and business travellers alike.

He founded one of the region’s most successful hotel chains and now he plans to build 100 more in the next three years.

It's not hard to see how Selim El Zyr has managed to carve a successful career in hospitality. Despite the hour long wait to get a meeting with him, the Lebanese businessman is positively charming when he arrives. He greets passers-by like long lost friends and is clearly as enthusiastic about hospitality as he was when he first told his bewildered father what he wanted to do 43 years ago.

"When I told my father I wanted to go and work at a hotel, he said ‘what are you going to do become a waiter?'" he laughs. "He didn't know much about hotels. I left Lebanon in 1967 and at that time there was maybe one flight a week, so travelling was an event."

If his father was once reticent about his son's choice of career, it's likely he soon changed his mind. After being accepted at the prestigious L'Ecole Hoteliere de Lausanne, El Zyr joined New York's renowned Waldorf Astoria before embarking on a 12-year career with Hilton International.

But it wasn't until he moved to the Gulf to work for Abu Dhabi National Hotels that he met his boss and future business partner, Nasser Al Nowais. The two established Rotana in 1992 and opened their first hotel, Beach Rotana in Abu Dhabi, a year later.

Rotana currently operates 36 hotels across the Gulf region but El Zyr plans to increase that figure to 100  across the Middle East and North Africa over the next two to three years. This year he will open nine new hotels and a further 10 to 12 every year until 2013-2014. "With the downturn in the economy, it's certainly becoming more challenging,"  admits El Zyr. "We used to sign between 10-15 agreements a year and now its seven to eight."

It is this tough economic climate that persuaded El Zyr to continue working despite his planned retirement.  It's difficult to judge whether or not he regrets the decision to stay; he clearly enjoys the challenge of expanding the brand - he is extremely hands on - but he says he is unlikely to stay for much longer.  "I want to say [I'm not hands on] but everyone will say otherwise," he laughs. "I enjoy it, I will keep on doing it as long as it's enjoyable but of course everything has a limit so I think two years is enough."Not that El Zyr plans to rest on his laurels during his last two  years in full time employment. On the contrary, the next few years are likely to be his toughest yet.  Although his long-term goal is to expand into the Subcontinent, Iran and Central Europe, he will spend the next two years concentrating on the MENA region. "We will soon become 100 hotel company," he says optimistically.

It's an ambitious plan considering the UAE's hospitality industry has been one of the hardest hit amid the global economic downturn. Luckily for Rotana, though, other markets such as Lebanon and Syria cushioned the blow during the hardest months in the UAE. Last year, for example, Beirut's revPAR (revenue per available room) jumped 62 percent to $146 per night compared to the previous year, according to the hotel benchmarking agency, STR Global.  Abu Dhabi's hugely underserved hospitality sector also provided additional security.

Today, despite the fact that Abu Dhabi's revPAR has overtaken Dubai's to become the most expensive in the region, El Zyr remains confident about the emirate's hospitality industry. "Dubai is enjoying one of the highest occupancies in the world in spite of the downturn. Of course, [we've had to drop the rates], you have to stay in the market and be competitive. Hopefully there won't be a price war but we are prepared for it."

For all his fighting talk, El Zyr knows that if Rotana is to succeed, he will need to look outside of the Middle East to new markets such as Iraq and Qatar. At last month's Arabian Travel Market, Qatar Airways announced a partnership with the hotelier to operate a Doha-based hotel, the airline's first foray in the hospitality sector. El Zyr says he hopes the tie up will be the start of a continued partnership with the Qatari flag carrier. "Qatar Airways is an emerging company, it is a quality company and we would like to grow the partnership."

In 2007, Rotana announced a tie up with the Lebanese holding group Malia to manage a five-star hotel in Erbil, in the Iraqi Kurdistan region. The $55m hotel, which is expected to be operational by the end of this year, will be the first of two hotels in Iraq that Rotana plans to manage in the next few years.

The second property in Baghdad's International Green Zone will open in 2012 and both are expected to cater to Iraq's growing investment community as well as the 300,000 United Nations suppliers and contractors that also operate in the country. "We are adventurous. Only an adventurer would go and sign an agreement in Baghdad [but] we calculated our risks and we know to be the first in the market is key," he says.Being one of the first hotel operators in Iraq is not without its challenges. El Zyr is having to deploy around 200 of his own staff from existing hotels to manage the first property until it has trained local staff to a standard he is happy with.

"There are plenty of experienced [Iraqi] CEO hoteliers that are around the world, we've tried to contact a few of them but not many are interested to go back. But there is an age group, that has been to college and university and who speaks the language, that we can train," he says.

Bringing in staff is likely to make staying at one of its Iraqi hotels a more expensive experience compared to hotels in other more established markets. "Bringing in 200 people to open your hotel costs a lot of money because you have to give them hardship allowances, fly them in and give them accommodation. It will cost more money, 20-30 percent more operating costs," he says.

Saudi Arabia is also a big market for Rotana's expansion. The group is scheduled to open 17 four and five-star properties including hotel apartments and resorts, comprising 5,500 rooms by 2012. In line with the kingdom's strict rules, none of the hotels will serve alcohol. Although the company has a non-alcohol compliant brand called Reyhaan, EL Zyr doesn't anticipate this will form part of his expansion drive.

"We have opened one hotel so far, the Rose Rotana in Dubai. We also have one opening in Abu Dhabi in the next two to three weeks and we've opened one in Mecca," he says. "They are doing well, there is a market for it - there is a niche - but it's not growing. You're not going to see hundreds of hotels not serving alcohol in cities such as Dubai, Abu Dhabi, Beirut or Cairo but they'll always be demand for a limited number," he says.

There has also been a huge amount of talk surrounding Rotana's initial public offering (IPO). The firm has been looking into the possibility of selling its shares for some years and although it previously appointed Shuaa Capital to arrange the sale, El Zyr  says its unlikely to happen for at least another two years, when the market has picked up.

"The dream of every private company is to go public but at the same time going public will bring in a lot of unnecessary hardness, as much as it brings corporate governance and transparency," he explains. "Going public [means] you are going to raise cash. What do we do with that cash today? Is it the best time to invest? That really is the billion dirham question. I think going public will have to wait for better days, in two-three years."

Regardless of whether Rotana lists its shares in two years or 20 years, what El Zyr has managed to achieve is no mean feat for someone whose father was once worried about his son's choice of career.