By Richard Agnew
Can Stelios make a US$20 a night hotel work in Dubai? The cut price dream is coming to Dubai. Stelios Haji-Ioannou is set to launch his easyHotel chain in the emirate, drastically slashing hotel prices. But will it work?
|~||~||~|Can Stelios make a US$20 a night hotel work in Dubai?
The cut price dream is coming to Dubai. Stelios Haji-Ioannou is set to launch his easyHotel chain in the emirate, drastically slashing hotel prices. But will it work? Back in Britain, where Greek tycoon Haji-Ioannou is based, he has become known as the “cut price king”, and “people’s champion.” The reason is simple: Haji-Ioannou has a habit of spotting an industry where prices are too high, moving in, and dropping prices. He did it most successfully with his airline easyJet, which changed the industry in Europe. It made air travel around Europe available to the masses, caused huge problems for established carriers such as British Airways, which generally charged passengers whatever fare they felt like, and helped make Haji-Ioannou a billionaire in the process. Even today, Middle East budget airlines such as Jazeera Airways and Air Arabia have modelled themselves along the exact lines of easyJet. The concept was then applied to other ventures such as car rentals, the web, cinemas and even fast food: the earlier you book, the cheaper it gets. In some cases, almost absurdly cheap.
And nowhere is the tycoon more needed, than Dubai. The emirate is a magnificent place to live and work in, but most of all, to visit. The likes of Air Arabia have helped bring about cheaper air travel across the region. The launch of services on Virgin Atlantic between London and Dubai in March this year will undoubtedly bring down the cost of longhaul travel to the region. But what is really needed is cheaper accommodation. Dubai’s construction explosion means that within the next three years, some of the world’s biggest tourist attractions — most notably Dubailand — will be completed. Millions of extra tourists are certain to, or at least would like to, spend their holidays in Dubai. The five-star hotels on offer are not only likely to be booked up, but a barrier to many tourists given their costs.
Once Haji-Ioannou gets going, it may cost as little as US$20 a night to stay in Dubai. Everyone — from consumers to businesses — will benefit in the long run. ||**||GE sparks deal with Dubai|~||~||~|You have to hand it to Jeffrey Immelt, president and CEO of General Electric Holdings, the world’s second biggest company. When he took the top job four years ago, he appeared destined for failure. After all, who could possible succeed Jack Welch who, in my view, is the world’s greatest ever businessman? Well, Immelt has done a pretty impressive job, turning GE from a deals and cost-cutting led company to one that now focuses heavily on innovation and marketing. Immelt has been encouraging his top management to take risks and unsurprisingly, not to be afraid of failure.
And the latest piece of the new GE jigsaw to fall into place was revealed last week, when General Electric and Dubai Holding (DH) signed an agreement to co-operate in identifying and investing in high technology projects across the Middle East and North Africa. GE will identify and source opportunities for investment in key regional infrastructure projects, and Dubai Holding will selectively invest in projects developed by GE industrial businesses. It is a great deal for Dubai, and for GE.||**||Ringing the tones of success|~||~||~|On this week’s cover, we feature Jim Morrison, the fun loving founder of i-mate. Whatever anyone says about Morrison, and a lot has been said about him, the figures speak for themselves.
Listed on the London Stock Exchange, the company is valued at around US$500 million. That's impressive, to say the least. Even more impressive is the fact that profit margins are nearly 30%. i-mate is a relatively cheap product to assemble, and relatively expensive to buy. But everybody loves it, hence the huge success of the company.
Morrison, meanwhile, is doing his bit for the Middle East, now vowing to employ only locals. This comes on top of his US$15 million donation (from his own pocket) to a Dubai business incubator fund.
He is now one of the richest people living in Dubai. And long may it continue. ||**||