Abu Dhabi National Hotels chief executive Richard W. Riley discusses the company's growth plans and its responsibility as a major player in delivering the vision of the UAE capital.
Abu Dhabi National Hotels (ADNH) plans to double its assets in three years and open 1500 rooms in Abu Dhabi by 2012. How will you achieve this?
We have purchased the land and we've done the designs and we have three properties under construction - the first one is called the Grand Canal. There was a management agreement with JW Marriott to run that hotel and because of the calibre of the hotel I didn't feel so sure about the management agreement, so we are actually in negotiation right now and hoping that we will be in a position to make an announcement [imminently]. It is amazing, it's a huge site...what's nice is we've got a facility next to the hotel which we call the Venetian Village, which is a retail restaurant complex which we will operate. We have some great brands, different from Dubai.
That project is one year away - the reason for that delay is not only constructional, it's also management. We made a decision and that decision is the right one I'm sure. So that set us back a bit, but what's interesting about that is we were the first into Saadiyat Island. I have lived here for five years and I'm a surfer from Hawaii, and trust me, Saadiyat is my favourite beach. We have a Park Hyatt going in there with us, it's a world class set-up. It's an amazing hotel, it's topped off and we are really one year away, so the reason I bring it up is because what has happened because of the slight delays to Grand Canal is that we will have two major openings a year from now.
We have another hotel that we are in the process of developing as well. When I say double the asset base, that includes our transportation company [and tours and catering].
ADNH also operates hotels under the Al Diar brand. Are there any plans to expand this?
Right now we have to consolidate the Al Diar brand. There's a market for these hotels so we have to work on the brand equity and we have to consolidate - that will be one of the things that I need to be successful with. We don't want to give up the brand, we do want to grow it.
Are you still working to develop the Yotel brand in the region?
We are still in discussion with the airport and our goal is to get a Yotel put in the airport and it's still on the agenda, but it's very slow to come. I think that is because of the re-design of the airport and the commencement of the new terminal etc. That was something we signed and we have every intention of going forward...if we can get that one launched then it leads to the next.
A big Yotel is going to open in New York next year, which nobody ever expected - 21m² rooms and very high prices so it's very interesting and a great concept.
Does ADNH plan to continue with the strategy of working with management companies or would you like to launch another brand?
I think Abu Dhabi always wanted a brand of its own and that's a little of the Jumeirah effect and at the end of the day it has to be the right thing, it has to be followed through. I think you have to find the white space... everything's getting so blended together so is there any white space left or are we just doing this? Are we doing this for the right reasons? It's a huge investment so if you really want to do it right you've got marketing, reservations, you've got your presence on the line, you've got development, the look, the feel, the taste, the brand - it is massively expensive. Or you can just put money behind it and buy your hotels and put your name on it. I don't want to get in to that, but you can look at that because that's happened right in front of our eyes.
What is ADNH's role in contributing to Abu Dhabi's tourism industry and the Vision 2030?
For us, Abu Dhabi Tourism Authority (ADTA) chairman Sheikh Sultan's Leadership Award [at the Arabian Hotel Investment Conference] was very important and we have spent time and effort at trade shows in support of the ADTA and we believe in what they're doing. We believe that the most important thing right now is to get the right products delivered, which will differentiate at the end of the road. Dubai has done an amazing job, it has great products, but what we have to do is make sure we're not replicating and people have a reason to go to Abu Dhabi - it's a different city but it's very important. We feel that our most important goal is to be a major player in delivering Abu Dhabi and to make sure that we don't make mistakes and so we looked at [our new] properties very carefully and we've been slow.
Are you not worried that demand will over-meet supply?
I think the hotels that will come to fruition will be slower than expected. When we first did this strategic study about a year and a half ago, we said 2013 would be a nudge year - in other words in 2013 hotels would be running 55% occupancy for the first time ever in Abu Dhabi since 2005, but that is now a push back to 2015. You'll also see that there is a slow down for buildings to reach the market and the whole thing will give us more time to deliver on the leisure side.
In the future, where would ADNH like to expand outside of the UAE?
Saudi Arabia has the infrastructure and is very attractive, especially the Riyadh side I believe. We were talking about Doha strategically a year ago and Doha has reached an in pass at this moment, it is challenging right now but it is good timing for us because by the time Doha turns the corner, that might be an option for us. I still think places like Algeria are exceptional for the future and even Libya and Syria. We are Abu Dhabi National Hotels so we will look at this region first, then the MENA region.
Now is a good time to buy but our pipeline is such that we have a lot of money tied up right now.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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