Despite challenges of hospitality industry going through 'bad times', Olivier Harnisch says Dubai average revenues per room are still among highest in the world
Emaar Hospitality Group is in no rush to list its business on the stock exchange, the company’s CEO Olivier Harnisch told a packed audience on the opening day of the Arabian Travel Market in Dubai.
“Some of Emaar’s other units have gone on to IPO. But there are no specific plans for us to,” he said, referring to Emaar Development, a unit of Emaar Properties which went public earlier in November last year.
A lack of urgency to go public and raise funds could be the result of a hospitality market which according to Harnisch has remained resilient.
“I would question whether times are so bad for the hotel industry,” he replied when asked about how the industry’s average revenue per available room (RevPAR), a key industry metric, had fallen from previous years.
“RevPAR in absolute terms is still among the highest in the world even if relative to previous years it has become challenging. As hoteliers however, we know not to expect the pace of previous years.
"Short term demand and occupancy might fall but we’re still profitable, and you have to remember there has been a seven percent growth in tourist numbers in Dubai with over 2 million room nights now being added each year. Very high occupancy rates, close to 80 percent, are unique among other regions in the world.”
Emaar Hospitality Group is the hospitality and leisure arm of UAE-based property developer Emaar Properties. It runs three hotel brands under its portfolio: mid-market hotel chain Rove Hotels, luxury brand The Address, and Vida Hotels which occupies a segment in the middle.
Harnisch’s conference, on Day 1 of the exhibition being held until April 25, was held to discuss the Group’s portfolio of over 50 hotel projects in its potfolio, including a pipeline of 35 upcoming projects in the UAE, Saudi Arabia, Bahrain as well as the wider Middle East and The Maldives.
The company is looking to develop properties in 58 markets globally, a number that includes 28 markets in “key European cities” such London, Rome and Munich. Other markets the Group will announce properties in 2018 include Oman, “specifically Salalah and Muscat”, Saudi Arabia, as well as a property in Sub-Saharan Africa.
The company has experienced hardly any impact from the introduction of VAT, Harnisch added, calling it a sign of “market maturity.”
“It’s five percent, not 25 percent, so maybe that’s why it’s quite manageable. We haven’t seen any significant impact from it at Emaar Hospitality,” he said.
“We will soon announce our first quarter results and that should show that we at the top of the market including in terms of high RevPars,” Harnisch added.