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Fri 15 Aug 2008 04:00 AM

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The general point of view

General managers from a cross-section of Dubai hotels took time out from their busy schedules to meet HME at the Hyatt Regency Dubai to voice their views on the future of the region's hotel industry.

General managers from a cross-section of Dubai hotels took time out from their busy schedules to meet HME at the Hyatt Regency Dubai to voice their views on the future of the region's hotel industry.

Tell us about your role and the properties you cover.Mustafa Ainen:I'm opening a new Rotana property in Dubai - a 460-room five-star hotel near Media City. For a year now I've been managing this project, which will open hopefully by October this year.

We have two towers, a hotel tower with 260 rooms and suites with a club floor, and a residence of 200 units. In between we have three outlets - traditional cuisine from Abu Dhabi, an English pub and an all-day dining.

I think you just have to be realistic, and make the best of things while the going’s good.

We have something like 25,000ft2 of meeting space, 15 meeting rooms of various sizes - this is going to be a MICE hotel. We look forward to getting into the market, and hopefully will do by the end of this year, if the contractors deliver.

Henning Fries: I'm the GM of The Monarch and also responsible for the development of Refad Hotels. We are just about to open another property in Media City, hopefully by the end of this year.

We're slightly smaller - we just have 236 rooms and suites at The Monarch, which is located at the prestigious address of One Sheikh Zayed Road, the opposite side to the Trade Centre. At the moment we have four outlets up and running, we're hoping for another four by the end of this year, in which we have a collection of international cuisines.

The property encompasses hotels rooms and suites as well as residences, and they're probably amongst the largest rooms around; the largest suites are 1150m².

Our second property, at Media City, is a 264-room four-star deluxe property; it's going to be called The Square Media City, which will hopefully open this year. And its address is One Media City. Andrew Hendrian:I'm the GM of the Hyatt Regency Dubai, which I think may be one of the most iconic properties [in Dubai] with our trademark revolving restaurant on top.

We have 414 rooms, we have 317 serviced apartments, we have five restaurants, two bars, and what is probably one of the most popular nightclubs in the Middle East.

Of course we have quite substantial meetings space - it is quite popular with the locals for weddings and so on, and we have penetrated the MICE market over the past two years and been very successful with that.

People come here because the location is such that they want to come here, they want to come to the souks, and they can't leave without a visit to the revolving restaurant. Plus it was one of the first hotels in the area - Hyatt Regency's been there 28 years, so everyone knows it! Philippe Montaubin:I'm the GM for our upcoming Ibis and Novotel properties in Al Barsha, which are about 700m apart from one another. The Ibis will be opening in 2009, with 480 rooms, a main restaurant, another Cuban-themed restaurant and a lobby lounge pastry corner. There's no fitness or anything, it's really a pure accommodation product.

Then the Novotel will take about a year-and-a-half or so - it's just coming out of the ground. That one will be 460 rooms; there'll be a hotel, a residence, F&B will be two restaurants, two bars, there'll be a swimming pool, a gym, small boutiques - so there's that little bit extra.

Robert Kunkler: I'm the area general manager for the beach properties, so I'm responsible for all Jumeirah properties around the beach, and my base is Madinat Jumeirah.

The hotel that started the company in 1997 is of course the Jumeirah Beach Hotel, which has 600 rooms, 22 restaurants and bars; we started with 100% occupancy and it's never dropped much below 90%.

Then there's the world's most luxurious hotel, the Burj Al Arab, with 200 suites and quite a few outstanding restaurants including the new Junsui. The there's Madinat Jumeirah, with 44 restaurants and bars, composed of three luxury-brand boutique hotels totally 900 units, plus a sizeable conference, incentives and events area.

We have a few more things in the pipeline too, such as Jumeirah Living. There seems to have been a big shortage of availability for serviced apartments, so I think that concept will be important.

It is becoming increasingly common for hotels to offer a serviced apartment element; what's the reason for this trend?

Hendrian:Serviced apartments have become more popular because the way people either do business or come for leisure has changed; the businessman now prefers to stay in a one-bedroom apartment so it has that homey feeling. He has an internet connection, he has a kitchenette so he can fix his own coffee in the morning.

And if you're travelling as a family, you don't come to Dubai for a day or two, you come for a week or ten days, so for that the apartment set-up is also appealing.

Our Galleria apartments run at 90% all year round, so the demand for apartments has grown, from both a family and individual perspective. Ainen:If you look anywhere in Dubai, you can see that most hotels now are adding a serviced apartments element. With the hotels we are opening, like the 72-storey Rose Rotana on Sheikh Zayed Road, which has 480 studios and suites; we're also opening Arjaan, on the edge of Media City, which has around 200 units of one-, two- and three-bedroom apartments.

And our suite hotels or hotel-apartments are running at a much higher occupancy than normal four-star and five-star hotels all year round. Occupancy in properties like Villa Rotana is up in the high 90s, even in the summer.

Ainen: And it's no longer only Arabs or GCC nationals who form this business, it's all other nationalities too.

Fries: And another factor is that the average length of stay is also on the rise, because there's many more things to do and more incentives to stay longer.

Kunkler: Do you have more short-term or long-term leasing in your serviced apartments? Hendrian:We have around 70% long-term, a year or more, and the remaining 25-30% is short-term, say a week or a month.

Kunkler: Are there any particular differences between the Grand Hyatt apartments and those at Hyatt Regency, in terms of usage?

Hendrian:Yes; Grand Hyatt only has 155 apartments, and they have around 95% long-term, because of location. Often those who take on leases there are not individuals, they are companies - like Sony and others - so the individual changes but the apartment remains with the firm.

But it's different here because we are located near the gold souk and the spice souk and near a lot of different types of businesses, rather than big multinational companies. So the Grand Hyatt has retained almost 90% of the customers that were there when it opened.

Ainen:Another factor for the increased demand for this type of accommodation is the large number of projects in Dubai who get people out here for three to six months on a consultancy basis. And they don't want to put them up in a hotel because it's inconvenient; they'd rather put them in a serviced hotel apartment which is a little bit larger, so they have their own facilities but can also enjoy everything else in the hotel.

How has the past year been for your respective properties?

Ainen: Well of course although I've been on the project for a year now we are not yet operational, but regarding the pre-opening stage there have been a few challenges.

It's easy to blame contractors for late openings, but there are obviously some factors that cannot be helped. For example in the summer of 2007 there were about 300,000 illegal labourers who were taken out of the market, and 90% of them were in construction, so that caused a slow-down. Even government-owned companies, like Nakheel for example, announced delays; the Burj Dubai announced a delay of nine months.

It may not be related to similar reasons, but all contractors have this optimistic outlook that they're going to finish on time, so you go and do your mobilisation plans and recruit staff [too early].

But because I was there at the project, I could see when they said June it was going to be nearer September or October, so we adjusted ourselves. But the project is well into the final stages now.

Fries: Of course we only recently opened, and so far business has been good. We are trying to position a new brand, a new hotel, in a very highly competitive market, so we have slightly different challenges than other well-known brands. They draw on a lot of resources and brand awareness in the market.

But so far we're very happy with the way things have been going. Again we don't have our full operation up and running yet, and particularly the clientele we are trying to attract does appreciate a finished product, rather than going to somewhere that's half-finished. So that is something that we are having to bear in mind - the kind of market we're dealing with.

Kunkler:Everyone at our beach properties is smiling - the last four years, business has just kept getting stronger. In 2007 everyone thought that was as good as it would get, but 2008 is getting even better, and when we put out our forecast for 2009 it was for another strong growth in our performance.

Ainen: I remember when people were saying business in 2004 was a great concern, and 2007; and now it's all about what's going to happen in 2009, and whether there'll be saturation in 2012. But I think Dubai will just continue, with the new terminal three, Jebel Ali Airport, the extra A380s and all the international events that will take place here.

Hendrian: I agree; Dubai is blessed. For us, 2007 at the Regency was one of the best years we ever had during our whole 28 years in operation.

In 2006 we completed renovations, but of course if you renovate a property which is in operation you tend to lose customers, so 2006 was not very easy for us, but 2007 was excellent, and now 2008 is proving even better.

There does seem to be some uncertainty, what with the oil prices and worries about flying becoming more expensive, but somehow it's just not slowing down.

I think you just have to be realistic, and make the best of things while the going's good. With the present economic situation around the world there is some uncertainty prevailing in the world markets. Since 2003 there's been real growth, and that can't go on for another 10, 20 years.

Fries: I think here there are really two pillars: there's the leisure tourism side and there's the business side, and as long as the key drivers for both are continued, there's no reason to think that the demand is not consistent with the [supply] increase.

I don't think Dubai will behave any different to any other market: there will always pauses and increases again, but as long as the fundamentals of the business remain the same, there's no reason to think that it's going to go south. Ainen:I have been here for many years, and every time you think that there might be a down-turn in business due to a war or a threat or anything, Dubai comes out on top. I was here in the first Gulf war, and during the late 80s for the Iran-Iraq war, and Dubai and the rest of the UAE has never been terribly affected by that.

And there is no reason to believe that if, god forbid, there is any kind of situation in the future, that we won't still do well, thanks to the brilliance of the government here of steering business and marketing their vision.

Hadrian:I think what is also very important, and they have managed to do this, is that if anything happens somewhere in Israel or Lebanon it used to be referred to as ‘the Middle East crisis', but I think what the UAE and especially Dubai has done is a sensational job in marketing the city.

People are coming here and saying ‘it's safe, it's far away from trouble'. So the government has managed to deliver that marketing promise.

Which element do you consider more important to a hotel, F&B or spa?

Kunkler:I guess it depends on the configuration of the hotel. If you take Madinat, for us spa is very important. A vast percentage of our customers demand that world-class luxurious spa aspect to their stay, and it's a big part of the whole luxury offering.

We do our own spa brand now, Talise, which we will roll out through all our properties. And it's also an important element when it comes to revenues, because a good, well-managed spa can turn in an excellent performance.

In corporate hotels where the average stay in 2.2 days, then maybe the people there are in a rush and just want a quick massage on the run or something, but in leisure hotels a good spa is an added selling tool for the property.

Ainen: We have two hotels, the flagship Rotana in Abu Dhabi and in Villa Rotana, where we offer our own brand: Zen The Spa. Both are doing extremely well, but nevertheless for corporate hotels we are going with a mini-spa. We have five massage rooms at the new property, and I anticipate they're going to be really busy.

Regarding spa versus food and beverage, if you walk into a hotel and you don't have a spa, people may not comment on it; but if you don't have a quality restaurant, people will consider a hotel the lesser for it. Spa is getting important, though.

Hendrian: If you think about profitability and what's more important for the hotel, for us quality outlets have always been very important. If you have let's say 2000 square feet in a hotel, and you have to choose between a new outlet or a spa, what do you go with?

Fries:I think it's not difficult to compare by square metre; one would probably outweigh the other. But I think when you're making an entry into a market and trying to attract a certain kind of clientele, there are things you simply have to have.

If you have a five-star deluxe hotel, you will have a hard time trying to get away with not having certain elements, like a gym, a health club and a spa. I mean, we have a city-centre location, we're not a resort or beach hotel, but we have invested in an entire floor of the hotel being a spa with 11 treatment rooms.

We asked an outside operator, Mandara, to operate the spa for us. And this is proving to be the right decision, adding to and enhancing the value of the property's overall experience.

So it's no longer about whether you should have one or the another, it's about whether you can afford not to have one.

Montaubin:As business brands, Ibis and Novotel put a lot more on F&B, especially for Ibis. For Novotel we are looking at having a partnership with a specific operator for spa - but the definition of spa is very wide, depending on who you are talking with, because there's a lot of difference between offering pure massage and a full treatment.

We'd prefer to operate with someone who knows what they're doing, similar to Mandara. We're finding generally that our clientele is asking about fitness; so they want a gym or health centre, but they don't specifically ask for a spa in a city hotel. Massage yes, but not full spa treatments.

If you could change one thing about your property, what would it be?

Hendrian:We have a nice gold park by is, and I think it's an ideal location or two or three very trendy restaurants, and I've been working on that now for at least six years! Unfortunately, the whole area around the hotel is changing. So we don't know what's happening there, but we can't do anything there. There's a chance that the Metro might go through it. Philippe:Well regarding the City Centre hotel, where I was prior to joining the new project, I would try to get a bit more visibility from the outside, because all our food and beverage outlets are invisible.

That's one of our major headaches: we're invisible there, and then we cannot advertise in the shopping mall, where there's a lot of competition. So definitely an opening on the outside for our F&B area would be great.

They're working on it, for the renovation that's coming up; they're pulling down the Sofitel sign and it will then go up as one of our other brands, which should have an outside opening. It really depends on Dubai Municipality. Fries:A realistic answer is that I finally want to complete the construction work which is outstanding; an unrealistic answer would be I'd like the beach moved a little bit nearer! Ainen:Now we have the smoking regulations in hotels, where you can't smoke in the lobby or the lobby lounge or bar or any restaurant, I'd like the upcoming property to have more al fresco dining.

There'll be two restaurants, with big windows onto the street, and we're now trying to convince the owners to redesign it and open it up to al fresco seating outside. So that would be good for smokers. Of course we want people to kick the habit, but some habits are hard to kick and it's important to give guests the option.

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