*446& £ %&$&.#&3
HOSPITALITY BUSINESS MIDDLE EAST BIRTHDAY BURJ
NOW TRENDING
LOCAL HOSPITALITY
Iconic Dubai landmark reaches 15-year anniversary status
Local market demands from the design sector in Saudi Arabia
UAE national team wins world championship
TOUR DE FORCE ACCOR CEO SÉBASTIEN BAZIN SPEAKS EXCLUSIVELY TO HBME
-*$&/4&% #: *.1;
EDITORIAL
THINKING AHEAD W
LWK DQRWKHU \HDU GUDZLQJ WR D FORVH WKH EXVLQHVV ZRUOG LV NHHQ WR UHÀHFW on the ups and downs of 2014. It was a year when the UAE saw real estate recovery bolstered by 2013’s Expo2020 announcement then six months later the worst hotel performance in 18 years. Record breaking pipelines for hotels, theme parks and cruise terminals were announced and the emergence of new source markets and the arrival of new LQWHUQDWLRQDO EUDQGV FRQ¿UPHG WKH FRXQWU\œV SUHVWLJH RQ WKH ZRUOG VWDJH Elsewhere in the GCC record breaking visitor numbers, airport expansions, hotel developments and leisure and cultural attractions created a buzz the market hasn’t seen in years. If 2014 was the year of anything it was dreaming big. 7KH ÀLS VLGH WR VXFK LV WKDW LW ZDV DOVR D \HDU RI ULGLFXORXV VWRULHV )URP Dubai’s ambition to take the record for world’s largest mall for the third time, to FHOHEULW\ UHVWDXUDQW RSHQLQJV DQG 'XEDL 7UDPœV ¿UHZRUN WKHPHG LQDXJXUDWLRQ the budget of which could easily have outstripped that of the project itself. But the diversity and surprises that entertained, delighted and at times worried the industry this year, are also in keeping with its future. On the record predictions for next year are surprisingly thin on the ground for this time of year but from this perspective I strongly believe that is the quiet before the storm and things are about to get hyper-local. No longer can a blanket prediction cover such a diverse industry that develops and performs at paces that are far from uniform. Outlooks and forecasts will no longer come from central sources, but from those on the ground. On that note my top 2015 prediction is that hospitality is about to break from its mainstream, homogenised past and become a diverse tapestry of industries, cultures and activities. Encompassing everything from Bedouin camps and cruises to sport and culture scenes, it will become the alternative industry its mainstream consumers have been demanding. The glitz will continues but so too will the heritage, the tradition and, as always, the Arabian charm.
MELANIE MINGAS EDITOR, HBME
1
hospitalitybusinessme.com
ISSUE Nº PUBLISHER Dominic De Sousa GROUP CEO Nadeem Hood GROUP COO Georgina O’Hara
32 DECEMBER 2014
EDITORIAL GROUP DIRECTOR OF EDITORIAL Paul Godfrey paul.godfrey@cpimediagroup.com D: +971 04 440 9105
IN ASSOCIATION WITH
DIRECTOR OF STRATEGY, EDITORIAL Dave Reeder dave.reeder@cpimediagroup.com M: +971 (0) 50 450 6745 GROUP MANAGING EDITOR EDITOR, HBME Melanie Mingas melanie.mingas@cpimediagroup.com D: +971 04 440 9152 ASSISTANT EDITOR Sophie McCarrick sophie.mccarrick@cpimediagroup.com D: +971 04 440 9150 SENIOR GRAPHIC DESIGNER Chris Howlett PHOTOGRAPHY Anas Cheru ADVERTISING GROUP SALES DIRECTOR Carol Owen carol.owen@cpimediagroup.com M: +971 (0) 55 880 3817 SALES MANAGER HBME Julie Caulton Email: Julie.Caulton@cpimediagroup.com D: +971 04 440 9112 M: +971 (0) 56 778 9793 PRODUCTION MANAGER James Tharian WEB DEVELOPER Louie Alma DISTRIBUTION MANAGER Rajeesh Nair PRINTED BY Printwell Printing Press LLC, Dubai, UAE PUBLISHED BY
Head Office, PO Box 13700, Dubai, UAE D: +971 4 440 9100 Group Office, Dubai Media City Building 4, Office G08, Dubai, UAE A publication licensed by IMPZ © Copyright 2014 CPI. All rights reserved.
2
hospitalitybusinessme.com
CONTENTS
P28
P42
INTRODUCTION P03 Ź EDITOR’S LETTER DATA P06 Ź GLOBAL DATA Snapshot of the most recent hotel performance and pipelines from around the world, with a special report on sports
PROCUREMENT P14 Ź SUPPLIER NEWS The latest product and supplier news
P19 Ź 4 CORNERS INTERN DIARY Hebah Al Blooshi discusses the importance of greener suppoly chains
DESIGN & TECHNOLOGY P20 Ź THE INTERNET INNOVATOR Jannah Hotels’ end-to-end ICT solution not only provides seamless connectivity but also remembers guests’ sleep patterns
4
hospitalitybusinessme.com
CONTENTS
P22 Ź TRANSFORMING TRENDS The latest design innovations from Saudi Arabia
P24 Ź STYLISH SERVICE Stylish new front of house ware reaches the Seychelles
DEVELOPMENT & INVESTMENT P28 Ź CRUISE CONTROL
P24
P64
Details of Abu Dhabi’s ambitious plans to be a cruise liner hub for the region
P32 Ź FORWARD TO 15 A review of the year past and an examination of key drivers for the market over the next 12 months
OPERATIONS P42 Ź A WINNING CHAMPIONSHIP The second Dubai World Hospitality Championship saw national success and evidence of growing hospitality entrepreneurship at work
P46 Ź A WELCOMING RECEPTION Zemri Dauti talks about FoH challenges
P60
P48 Ź DRIVING HEALTHY PROFITABILITY A roundtable discussion on tackling costs and increasing profits
P54 Ź COVER STORY Sébastien Bazin has been CEO of Accor for almost a year and a half - a group now opening a new property every two days
P64 Ź MEETING THE CHALLENGE Radisson Blu veteran Harald Buerkle discusses the resurgent Egyptian market
TREND TALK P67 Ź TECHNOLOGY SUPPORT Unconnected travel? Impossible
P60 Ź BURJ BIRTHDAY A decade and a half on, we look back at the iconic hotel’s achievements
hospitalitybusinessme.com
P68 Ź IT DANGERS
P67
Hackers are now targeting hospitality
5
DATA
STR GLOBAL: KEY MARKET PIPELINE, OCTOBER 2014 PIPELINE AND DEVELOPMENT DATA FOR STR GLOBAL’S KEY MARKETS
Manilla
MEA
646
HOTELS UNDER CONTRACT
ASIA PACIFIC 151,579
2,465
HOTELS UNDER CONTRACT
ROOMS UNDER CONTRACT
CHAIN SCALE SEGMENT: ROOMS UNDER CONTRACT
55,172 ROOMS UPPER UPSCALE
548,005
28,628
ROOMS UNDER CONTRACT
ROOMS LUXURY SEGMENT
6,969
27,833
ROOMS UNDER CONSTRUCTION IN SHANGHAI, CHINA. THE REGION’S HIGHEST
ROOMS UPSCALE SEGMENT
6,000+ ROOMS UNDER CONSTRUCTION:
ROOMS UNAFFILIATED SEGMENT
6,803 ROOMS MANILA, PHILIPPINES
6
21,327 CHAIN SCALE SEGMENT: ROOMS UNDER CONSTRUCTION
6,485
27,503
ROOMS JAKARTA, INDONESIA
ROOMS UPPER UPSCALE
6,159
15,952
ROOMS CHENGDU, CHINA
ROOMS LUXURY SEGMENT
6,097
14,429
ROOMS BALI, INDONESIA
ROOMS UPSCALE SEGMENT
hospitalitybusinessme.com
DATA
USA
3,358
HOTELS UNDER CONTRACT
CENTRAL/ SOUTH AMERICA
439
HOTELS UNDER CONTRACT
403,715 ROOMS UNDER CONTRACT
15.0%
+ YOY COMPARISON
+31.0% INCREASE IN ROOMS UNDER CONSTRUCTION
CHAIN SCALE SEGMENT ROOMS UNDER CONTRACT: GROWTH
70,970 ROOMS UNDER CONTRACT
CHAIN SCALE SEGMENT: ROOMS UNDER CONTRACT FOUR SEGMENTS ACCOUNTED FOR MORE THAN 15% OF THE ROOMS UNDER CONTRACT
14,628 ROOMS UPSCALE SEGMENT
GROWTH OF TOTAL MARKET, RATHER THAN SHARE OF TOTAL MARKET
9,127 ROOMS LUXURY
30,117 ROOMS UPPER UPSCALE SEGMENT
119,450 ROOMS UPPER MIDSCALE SEGMENT
4,105 ROOMS ECONOMY SEGMENT
ROOMS UNDER CONSTRUCTION
5,726 ROOMS MIDSCALE SEGMENT
11,091 ROOMS UPPER UPSCALE SEGMENT
43,752
14,620 ROOMS UPPER MIDSCALE
14,487 ROOMS MIDSCALE SEGMENT
13,118 ROOMS UPPER UPSCALE SEGMENT
2,575 ROOMS UNAFFILIATED SEGMENT
CHAIN SCALE SEGMENT: UNDER CONSTRUCTION
5,165 ROOMS UPPER MIDSCALE
4,911 ROOMS MIDSCALE SEGMENT
4,635 ROOMS UPPER UPSCALE
ROOMS AND THE UPSCALE SEGMENT
hospitalitybusinessme.com
7
DATA
STR GLOBAL: KEY MARKET PIPELINE, OCTOBER 2014 CONTINUED Paris
EUROPE
905
HOTELS UNDER CONTRACT
2015 FORECAST
235 HOTELS
36,788 142,785 ROOMS UNDER CONTRACT
10,399
OPENINGS YTD
ROOMS WITHIN 60 HOTELS UPSCALE SEGMENT
391
6,224
HOTELS
ROOMS WITHIN 41 HOTELS UPPER MIDSCALE SEGMENT
61,961 ROOMS
5,583
OPENINGS SCHEDULED Q4 2014
ROOMS WITHIN 27 HOTELS UPPER UPSCALE SEGMENT
74
5,045
HOTELS
ROOMS WITHIN 30 HOTELS AND THE ECONOMY SEGMENT
8,412 ROOMS, DOMINATED BY UPPER MIDSCALE AND ECONOMY
8
ROOMS
“THE UNDER CONTRACT DATA INCLUDES PROJECTS IN THE IN CONSTRUCTION, FINAL PLANNING AND PLANNING STAGES BUT DOES NOT INCLUDE PROJECTS IN THE UNCONFIRMED STAGE”
hospitalitybusinessme.com
DATA
HAJJ AND EID AL ADHA HOTEL RESULTS STR GLOBAL REPORTS POSITIVE YOY RESULTS FOR HOTELS IN DUBAI, MAKKAH AND MUSCAT Makkah
DUBAI Because Eid Al Adha fell on a weekend in 2014 versus on weekdays in 2013, the three-day celebration period of Eid 2014 saw year-over-year declines:
Daily Eid Al Adha Performance Comparison, in AED 10 Oct. - 19 Oct 2013 vs 02 Oct - 11 Oct 2014
-3.9% OCCUPANCY
-6.5% ADR
Occ 13
Occ 14
ADR13
ADR 14
100%
AED 1,400
90%
AED 1,200 AED 1,000
80%
AED 800
70%
-10.2%
60%
REVPAR
50%
The average RevPAR across the three days was $248 in 2014 and $276 in 2013. When comparing the holiday periods (six days in 2013 and four days in 2014), 2014 saw occupancy and ADR decline by 1.3% and 6.0% respectively.
10
AED 600 AED 400 AED 200
50%
AED 0 y
T
da hurs
S
day atur
y
y
da Mon
Eid 2014
da nes
Wed
ay Frid
Eid 2013
hospitalitybusinessme.com
DATA
MAKKAH Hajj, the Islamic pilgrimage to Makkah and Medina, is traditionally a driver of positive performance for hotels. Makkah was able to maintain high levels of
revenue per available room during this period, similar to last year. At the start of Hajj, Makkah was able to achieve RevPAR of nearly $533. In
Medina, hotels saw RevPAR increases beyond $266 for three consecutive days.
Hajj & Eid Makkah & Medina Daily Performance Comparison, in SAR 10 Oct. - 19
Oct 2014 vs 02 Oct - 11 Oct
2014
Makkah RevAR ‘13
Medina RevAR ‘13
RevPAR ‘14
2,000
2,000
1,500
1,500
1,000
1,000
500
500
0
y
a rsd
u Th
y
y
y
a urd
a nd
Mo
t Sa
a rid
ay
rsd
F
dn
We
0
y
a esd
u Th
y
rda
tu Sa
ay
nd
Mo
RevPAR ‘14
y
sda
e dn
We
y
da
Fri
MUSCAT In Muscat, Oman, occupancy rose during the 10-day period of Eid Al Adha, peaking at 81.0%. Total RevPAR experienced a year-over-year decline of 2.5% also resulting from the difference
in days when Eid occurred. Despite occupancy and RevPAR declines when compared to 2013 levels, ADR saw a slight increase of 3.2% during the three days of Eid; averaging at $290.
Occupancy, which began at its lowest point of 47.2% on Thursday, 2 October, reached its peak of 72.7% two days later on Saturday, 4 October.
Muscat Daily Eid Al Adha Performance Comparison, in OMR 10 Oct. - 19 Oct 2013 vs 02 Oct - 11 Oct 2014 Occ 13
Occ 14
ADR 13
ADR 14
100%
AED 120
90%
AED 110
80%
AED 100
70%
AED 90
60%
AED 80
50%
AED 70 AED 60
40% ay ursd
Th
hospitalitybusinessme.com
ay ay Frid Saturd
S
ay und
M
ay ond
sday sday hursday Tue Wedne T
ay ay Frid Saturd
11
DATA
SPORTING EVENTS WORTH $80BN ACCORDING TO A.T. KEARNEY THE GLOBAL SPORTS INDUSTRY IS GROWING FASTER THAN GDP, WITH EVENTS WORTH $80BN IN 2014
O
n the global stage, sporting league and special events will generate $80bn this year and in the Middle East, sports contributes $45bn to the economy, with growth forecast as annual F1, golf and tennis tournaments are boosted by the 2022 FIFA World Cup in Qatar. At the release of their latest report, at the Doha GOALS Forum, Nicolas Sultan, Principal at A.T. Kearney Middle East, based in Doha, commented: “The sports sector has witnessed substantial growth in the region, and is progressively becoming a major driver for economic development
and investment in infrastructure in the GCC, as well as being leveraged for branding of nations along with the global events hosted here. In terms of sport revenues, the Middle East is experiencing the fastest growth, with revenues projected to grow at 10% per year over the next three years. “It is imperative that strategic and operational challenges be tackled effectively by the various players in the sports industry eco-system, in order to ensure that the most value is extracted and a sustainable industry is built for the
future,” Sultan added. HE Sheikh Faisal bin Mubarak Al Thani, Executive Director of Doha GOALS, commented: “Job creation and economic opportunity are two of the foundations of Doha GOALS. More than just stadium and facilities construction, sport presents huge potential for nations to generate earning power for themselves and their citizens, from the growth of sectors such as construction and financing through to tourism and hospitality. We look forward to continuing the discussion at this year’s Doha GOALS Forum.”
MAKING PROFIT FROM SPORT
SPORT: THE GLOBAL SNAPSHOT
TOP REVENUE GENERATORS,2013
2009 – 2013
35%
SPONSORSHIP
27%
TICKETING
WINTER OLYMPICS, WORLD CUP, SUMMER OLYMPICS, UEFA EUROPEAN CHAMPIONSHIP
= +$18 bn 7 %CAGR PEAK YEAR 2012 = $78.2BN GLOBAL REVENUES
40%
FOOTBALL MEDIA RIGHTS
33%
TV RIGHTS (US ONLY)
FUTURE GROWTH
2017 PROJECTED $90.9BN ON CURRENT GROWTH CYCLE
36%
SPONSORSHIP (US ONLY)
= +$15 bn from 2013
The authors would like to thank their colleagues Guillaume Bochu and Nicolas Cantau for their valuable contributions to this paper.
12
hospitalitybusinessme.com
DATA
THE SPORTS MARKETS NEXT FOUR-YEAR CYCLE WILL BRING CONTINUED GROWTH
Sports market revenue ($ billion)
+5% +7%
76.1 +6%
58.4
90.9
14.8
17.7
11.9
46.5
2005
2009
2013
CAGR (%) 20052009
20092013
20132017
Football
8%
9%
5%
U.S. Sports
5%
5%
4%
Formula 1
3%
4%
4%
Tennis
2%
5%
3%
Golf
3%
2%
4%
Others
11%
9%
9%
Total
6%
7%
5%
2017f
Sources: AT Kearney analysis
FOOTBALL IS KING IN EUROPE, WHERE IT ACCOUNTS FOR THE VAST MAJORITY OF SPORTS REVENUES
Sporting events market ($ billion, 2013)
32.8 1.2 0.6
Others
29.0
1.2 2.7
Golf
0.9
1.0 0.2
27.1
Tennis
26.3
Formula 1 U.S. Sports Football
9.7 2.0 0.4 1.5 1.7
0.6
4.5 0.3
0.2
3.6
4.0
Asia Pacific
Latin America
0.6
EMEA
% Global sports market
North America
43%
38%
13%
6%
1 NFL (U.S) football), (MLB (baseball), NBA (basketball, NHL (Hockey), NASCAR (motor sports), NCAA (college sports). Sources: AT Kearney analysis
IMPORTANT FIGURES
71%
OF F1 REVENUE COMES FROM SPONSORSHIP
hospitalitybusinessme.com
$4 bn
EARNED BY FIFA IN TV RIGHTS AND MARKETING, 2013 WORLD CUP
$5 bn
NFL EARNINGS FROM TV DEALS WITH FOUR NETWORKS
172%
GROWTH IN RIGHTS REVENUE FOR FRENCH LIGUE 1
13
PROCUREMENT
SUPPLIER NEWS THE INDUSTRY’S LATEST PRODUCT AND SERVICE INNOVATIONS
IMPROVING INTERNET STANDARDS Al-Hokair, a group with a long involvement in property ownership and development of Saudi Arabia’s hospitality sector, has commissioned Swisscom Hospitality to serve all its 31 properties in Saudi Arabia and Dubai with advanced broadband Internet services. The centrepiece of Swisscom’s broadband Internet solution is a nextgeneration internet gateway, which offers hoteliers a robust technology backbone in view of constantly growing guest connectivity needs and resulting bandwidth requirements. The Swisscom gateway supports 3,000 simultaneous users on a given hotel property, scaleable for more if needed, and allows data to flow at 1Gb per second, thus matching the speed of modern fibre optical technologies.
INSPIRING DESIGN Hansgrohe, the German bathroom manufacturer, has unveiled “iSpecify” a new website for architects, interior designers, and bathroom planners, which allows for easy and efficient project specification with Hansgrohe and Axor products at Downtown Design. After an eight-month development and implementation phase, “iSpecify” has gone live in the Middle East. Dirk Schilmoeller, sales director Middle East for Hansgrohe said: “Our new Web site, iSpecify, has innovation at the core and we are pleased to have it introduced in Middle East at Downtown Design that represents originality and creativity.” iSpecify enables inspiration by simply browsing through a selection of global references.
14
hospitalitybusinessme.com
PROCUREMENT
SMART TELEVISION TECHNOLOGY Ericsson has introduced ‘Ericsson MediaFirst’, a new end-toend cloud-based platform that embraces all content sources and delivery networks. Per Borgklint, Ericsson SVP said: “MediaFirst brings the agility, innovation and economic benefits of modern cloud technologies and web services to Pay TV operators. Ericsson is equipping operators and service providers to drive their business in an agile fashion and define, rather than react to, the future of TV.” Ericsson MediaFirst TV Platform is based on an open and standardsbased approach and architected to be cloud agnostic, enabling delivery on public and OpenStack private clouds.
RESTORING AQUATIC ECOSYSTEMS Interface is to expand its Net-Works programme in partnership with Zoological Society of London (ZSL). It is an initiative designed to tackle the growing environmental problem of discarded fishing nets in some of the world’s poorest coastal communities, which has collected over 38,600kg of discarded fishing nets, helping 4,500 villagers in communities in the Philippines to earn supplemental income equal to 84,000 additional meals since 2012. A Net-Works tool kit will be released in Q1 2015, to help additional partners set up NetWorks collection hubs in pursuit of inclusive business.
A NEW ERA OF LAUNDRY LG Electronics latest commercial washing machine has made its Middle East debut in Qatar. Equipped with the Inverter Direct Drive System, it provides what LG describes as “reliable, efficient, intelligent and stylish” new offerings in total laundry solutions to commercial customers across the region. Enhancing efficiency in alignment with Qatar’s commitment to reduce energy consumption, the increased efficiency capabilities of LG’s new commercial laundry offerings is a result of its Inverter Control and Direct Drive System working together to use less energy and water, without compromising performance.
hospitalitybusinessme.com
15
PROCUREMENT
UNIFIED COMMUNICATIONS IPMagiX has introduced customer-driven hospitality tools that not only enhance day-to-day operations but also improve guest experience. Hossam Megahed, CEO to IPMagiX commented: “We are the first Arabic developer dedicated to delivering unified communications solutions that empower Middle East hotels to communicate directly to their guests while giving high consideration to the in-room needs.” IPMagiX focuses on business technology. This entails a comprehensive analysis of the client’s business nature in order to employ the most suitable applications to solve challenges and pain points that are being encountered daily.
KEEPING WIFI COST EFFECTIVE Aruba Networks has launched a multifunctional and affordable, dual-radio AP-103H hospitality access point (AP), to provide ultra-fast, secure and scalable WiFi. The AP-103H maximises mobile performance in moderately dense WiFi environments while minimising interference from cellular networks. It uses existing structured cabling systems to provide secure wired and WiFi network access. The compact, cost-effective AP-103H delivers wireless data rates up to 300Mbps per radio employing 802.11n technology with two spatial MIMO streams. This 2×2:2 AP features dedicated 2.4-GHz and 5-GHz radios and integrated omni-directional antennas.
SUSTAINABLE WATER SOLUTIONS Delta Faucet Company, a leader in sustainable and innovative water solutions, is continuing to expand on its partnership with UAE building and construction group, Mac Al Gurg, with the opening of a new showroom in Abu Dhabi. “We’ve been growing very fast in the Middle East. With the upcoming Expo2020, there is great potential for Delta Faucet to get involved in the region’s hotel expansion plans. From a global perspective we see the Middle East as a key growth market and are committed to offering water solutions to residential and commercial buildings in the area,” said Ken Roberts, vice president, international, Delta Faucet Company.
16
hospitalitybusinessme.com
PROCUREMENT
SUPPLIER DIRECTORY The industry’s latest COMMERCIAL DISTRIBUTION LIST
Rikan General Trading LLC
Emerson FZE (Insinkerator)
Tel: +971 4 391 4438
The Hotel & Restaurant Supply Co.
World Area Headquarters
Fax: +971 4 390 4873
202, API World Tower
PO Box 17034
Shaikh Zayed Road
Jebel Ali Free Zone
P.O. Box 42830
Dubai
Tel: +971 4 325 2500
Tel: +971 4 811 8100
Unasco Building, Al Quoz 4
Email: riaz@rikan.ae
Fax: +971 4 883 5063
PO Box 73042
Email: mohamed.karam@emerson.com
Dubai
Coffee Planet LLC
Tel: +971 4 341 5537 4 Corner General Trading LLC
Fax: +971 4 341 5536
Head Office & Distribution Centre
Interface Europe LTd
Dubai Investment Park 2,
PI Business Suites Building
P.O Box 473513
Office 505, Al Barsha
Shura Trading
Dubai
Cluster G, Dubai Arch Tower, Jumeirah
Contact: Mike Walden
Lakes Towers
Mob: +971 (0)55 383 2520
Tel: +971 4 399 6934
Dubai
Tel: +971 (0)4 884 7248
Fax: +971 4 399 6823
PO Box 124219, Dubai
Email: mike.walden@4cornersuae.com
Email: sandra.crasta@interface.com Tel: +971 4 451 6363 Fax: +971 4 451 6262
Bond Interiors PO Box 15758
National Bank of Abu Dhabi PJSC
Dubai
Abu Dhabi
Tel: +971 4 271 1727
Contact: Bassem El Boustany
Vingcard
Tel: +971 2 611 2046
PO Box 341162
Fax: +971 4 271 3797
Dubai Silicon Oasis
Email: tarek@bondinteriors.com
Dubai Desert River LLC
Tel: +971 4 326 2136 / +971 43 342 556
Al Quoz
Fax: +971 4 326 2851 / +971 4 334 2558
Burgess Furniture Ltd
PO Box 74054
PO Box 500466
Dubai
Design House Al Sufouh 1
Tel: +971 4 3233636
Barr + Wray FZE
Dubai
Fax: +971 4 3233686
Dubai Silicon Oasis
UAE
Le Solarium Building, Office 401
PO Box 341246
Tel: +44 208 894 9231
iNFOR
Email: sbateman@burgessfurniture.com
Dubai Internet City
hospitalitybusinessme.com
Dubai
Building 2, Room 206
Tel: +971 4 320 6440
Dubai
Fax: +971 4 320 6441
17
ADVERTORIAL
STYLE AND QUALITY
Enjoy your coffee with Nespresso Since 1996, Nespresso has provided business-to-business solutions, designed to meet the needs of some of the most discerning hosts in the world’s foremost hotels and restaurants as well as those of our business customers. Today, the business-to-business team at Nespresso provides a range of products and services to professional customers in more than
Zenius machine.
50 countries worldwide. The business solutions offered by Nespresso focus on YDULRXV EXVLQHVV FKDQQHOV PDLQO\ 2IĹľFHV HORECA and Travel, providing services DQG VROXWLRQV WR DQVZHU WKH VSHFLĹľF QHHGV of our customers in each sector. There is a Nespresso coffee for every taste and occasion and each Nespresso Grand Cru offers unique aromatic notes
to meet individual taste preferences. Nespresso offers its professional customers nine Grand Cru coffees all with distinct aromas, tastes and levels of intensity: 3 Ristrettos, 2 Espressos, 2 Lungos and 2 Decaffeinated coffees. Nespresso provides a range of machines dedicated to professional use that meet the different needs and expectations of our customers. Nespresso SURIHVVLRQDO PDFKLQHV DUH VSHFLĹľFDOO\ designed for intensive, high volume usage and are adaptable to all space and YHQXH FRQĹľJXUDWLRQV IRU TXLFN DQG VLPSOH preparation of the highest quality coffees. The Zenius machine is the ideal machine for small or bigger companies DOLNH ORRNLQJ IRU TXDOLW\ DQG VLPSOLFLW\ ZLWK TXLFN FRIIHH DQG KRW ZDWHU preparation at the touch of a button. Exceptional quality coffee and hot ZDWHU DUH SUHSDUHG TXLFNO\ DW WKH WRXFK of a button. The fast heat up allows the machine to be ready in approximately 35 seconds. Nespresso is available in Bahrain, Jordan, Kingdom of Saudi Arabia, Kuwait, Lebanon, Oman, Qatar, United Arab Emirates For more information about the Nespresso machines, coffees and services please visit www.nespresso.com/pro
PROCUREMENT
SPREADING THE WORD BASED ON HER RECENT FINDINGS, 4 CORNERS INTERN HEBAH AL BLOOSHI REVEALS TO SOPHIE MCCARRICK THAT THE MIDDLE EAST REGION NEEDS TO RAISE FURTHER AWARENESS ABOUT GREENER SUPPLY CHAINS IN ORDER TO ENSURE THEIR SUCCESSFUL IMPLEMENTATION
N
ow in her third month of investigating supply and distribution chains within the UAE’s hospitality industry, 4 Corners intern and student at The Emirates Academy of Hospitality Management, Hebah Al Blooshi says one of the major challenges of moving forward with the one-stop-shop supply concept, is awareness and understanding. Based on her findings of a number of Dubai-based properties, Al Blooshi reveals that ‘Hotel X’ (a ‘mean’ hotel from the sample) uses 85 separate food and beverage suppliers that generate on average 225 individual delivery drops per week, resulting in a near 25,000km of travel on a weekly basis. Commenting on this scenario, she says: “The one-stop-shop concept however, consolidates all suppliers into one. Reducing the kilometres to just 200 per week, therefore reducing the carbon footprint by 99%. If Hotel X opted for a consolidating company like 4 Corners, they can magnificently reduce not only their C0² emissions, but save time, money and resources.â€? During Dubai’s recent Speciality Food Festival, an event welcoming hospitality companies from all over the world, Al Blooshi met with a number of hotel F&B professionals to discuss their views on the importance of greener supply chains. And many were completely unaware of what the one-stop-shop distribution concept is. “Various companies from across the region, in particularly Saudi Arabia and Kuwait were interested in learning what the greener supply chain is all about. They expressed that they’d not yet heard of such a concept or come in touch with any similar companies offering these
hospitalitybusinessme.com
HEBAH AL BLOOSHI STUDENT AND INTERN
THE ONE-STOP-SHOP CONCEPT CONSOLIDATES ALL SUPPLIERS INTO ONE. REDUCING THE KILOMETRES TO JUST 200 PER WEEK, THEREFORE REDUCING THE CARBON FOOTPRINT BY 99% services in their countries,� she remarks, adding: “Not only were they realising the environmental benefits of reducing their delivery drops, but were acknowledging the long-term advantages for themselves when looking at costs and sustainability within their hotels and restaurants through cutting down on paper work, billing and order time, plus labour costs.�
CHANGING MENTALITIES Reviewing proven results of 4 Corners’ one-stop-shop concept with clients Al Blooshi says, created a sceptical mental attitude among several visitors. “They were not grasping the fact that
it was possible for one company to make such a drastic change, despite providing them with evidence of this happening in the UAE daily,â€? she relays. “It’s a trust issue really,â€? she adds. The intern believes another delay in the roll-out of this eco-friendly concept is that there are too many decision makers to go through when making a final decision on which suppliers are selected. “Sometimes the procurement manager wants it, however the accountant disagrees. This shows signs of foul play along the line, or dodgy barter deals that may be occurring behind the scenes,â€? she expresses. It also comes down to government backing. With international experience and a base in the UAE, 4 Corners is able to import and export, however when it comes to exporting to places such as Saudi Arabia, further logistics come into play. “There is much more paperwork involved and regulations set out that you need to DGKHUH WR WKHUH ZKLFK PDNH LW GLIÂżFXOW for companies wanting to implement this system. In addition, there is also a lack of suitable, temperature controlled vehicles with the necessary partitions in some countries,â€? Al Blooshi says. Considering the possibility of further expansion across the Middle East, she says that now is the time to push boundaries and raise awareness of the concept. “It’s here and operating, we now just need to spread the word. It’s inevitable, particularly in Dubai, that we’ll see more of this supply method, creating a sustainable region. There is definitely space for growth, people just need to come on board and trust us to make the change with them. It’s all about the trust.â€?
19
DESIGN & TECHNOLOGY
THE INTERNET INNOVATOR INTRODUCING THE UAE’S FIRST END-TO-END ICT SOLUTION, CEO OF JANNAH HOTELS AND RESORTS, NEHME DARWICHE TELLS SOPHIE MCCARRICK HOW PROVIDING A 50MB FREE INTERNET CONNECTION TO ITS GUESTS TODAY WILL TOMORROW TRANSFORM INTO A PROVIDING A MATTRESS THAT CAN REMEMBER HOW YOU SLEEP
I
n August 2014, hotel WiFi enthusiasts Hotel WiFi Test, released a report that ranked the quality of internet connection in hotels in the world’s most visited cities. The report concluded that, while 29% of tested Dubai hotels were found to have “poor” WiFi, seemingly progressive, established destinations including Las Vegas, Paris and San Francisco, were generating results of 57%, 53% and 48% respectively. When the report took a per brand view on the topic, it concluded that Homewood Suites, Hilton Garden Inn and Hampton Inn had sub-standard WiFi in 90% and 83% of properties respectively, with
Radisson topping the league at 17%. On average, an adequate hotel internet connection has a download speed of 2Mbps. Representing a first in the UAE, Jannah Hotels and Resorts in partnership with ICT provider, Huawei, has spearheaded the launch of the region’s fastest hotel WiFi at Jannah Place Dubai Marina, which officially opened on November 28, 2014. Inauguration of the new 133key property saw completion of the internet solution project, which included implementation of a network infrastructure comprising switches, Jannah Place, Dubai Marina; the 133 key property opened last month.
20
routers, WLAN, IT servers and the latest unified communications and collaboration solutions. As a result guests are provided with free, 50Mb internet to all of their personal devices in all areas of the property. Commenting on the project, Nehme Darwiche, CEO of Jannah Hotels and Resorts, says: “In recent years we have noticed that our guests wanted highspeed WiFi connectivity on demand and more interactive hotel guest services. While developing our flagship Jannah Place Hotel in Dubai Marina, we knew it was the perfect opportunity to deploy innovative technology that could allow us to offer this service to our guests.” By deploying the latest solutions in WiFi, unified communications and IT servers, Jannah aims to satisfy the demands of increasingly tech-savvy guests who typically require high speed connectivity for business and entertainment applications. “When I first learnt about hospitality, I was taught how a traveller always wants to feel at home whilst away. Through the Internet people are now able to stay connected via things like Skype and feel
hospitalitybusinessme.com
DESIGN & TECHNOLOGY
as at home as possible,” Darwiche says. The private developer and operator aims to roll out the system in all its properties within two years, allowing visitors not only to connect with family and friends easier, but also access other hotel services such as room service, much quicker. In partnership with Enterprise-Systems and systems integrator Ibtekkar, Huawei deployed the solution within one month, ensuring that all guest and hotel services would be operational in time for the official hotel launch. Sufian Dweik, vice president of Huawei Enterprise in the UAE, remarks: “In a highly competitive industry, getting guests seamlessly connected on their personal devices is arguably the most important service to provide hotel guests. Hotels have generally found it a challenge to provide enough bandwidth to accommodate the connectivity needs of its guests, however together with Jannah we are now changing this. Deploying powerful WiFi means a more stable and reliable service, providing a user experience that is uninterrupted.”
BANDWIDTH BANDIT Reflecting on his years of experience in the hospitality industry, Darwiche explains he first noticed the growing demand for more efficient internet whilst working for a previous employer. “I could see how detrimental it was becoming to not offer free, quality WiFi. I started reading reviews, sending out surveys and became increasingly inquisitive into the needs of a guest. The main complaints were always based around the access to free Internet, and secondly the strength and speed of the service,” he says. In addition to having the in-house convenience of a free connection, guests are also freed from extensive roaming charges. “Free Internet access should be a standard in today’s industry,” Darwiche continues to comment in reference to the topic of guest satisfaction.
hospitalitybusinessme.com
THE TOP WIFI CITIES ACCORDING TO HOTEL WIFI TEST 1
Stockholm
Sweden
4
2
Hong Kong
Hong Kong
8
3
Amsterdam
Netherlands
17
4
Tokyo
Japan
19
5
Rome
Italy
28
High speed internet is only the start of Jannah’s plans for digitising hospitality.
“Many hotels do not realise the value of investing in quality internet. Many operators, I feel, focus too much on providing amenities when now it’s actually more important to provide these guests with a strong Internet platform to use their devices on. It’s not just about providing the fastest internet, you’ve got to have the right structure, network and operations implemented along with it, in order to make it work,” he adds, noting that the accessibility also allows for guests to have much closer communication with the hotel management through social media. “If I go to a hotel and I’m unhappy with the check-in, I can hashtag the hotel and tell them frankly that their check-in is not that good! It’s much quicker and effective.”
INSPIRING INNOVATION Moving forward, Darwiche explains this project will not be the last technological innovation from the group, with the focus in future to centre around the “intelligent
guestroom”... beyond temperature and lighting controls. Taking the basic concept of hospitality and combining it with everything that is possible in the realms of technology, the theme moving forward will build on the personalisation seen elsewhere in the industry, but with a twist. “Now we have this solution successfully implemented, we have to keep the business moving forward. I want to be at the forefront of technology innovation within hotels, I want to create something that is unique to us. So, we have begun research on the making of intelligent guestrooms, exclusive to Jannah,” he reveals. Contemplating his future in innovation, he concludes: “Before I leave the hospitality industry, I want to see the launch of a mattress that will remember how a person sleeps. This will be a revolution of the hotel business. History teaches us all the time that pioneers always survive, innovation will keep hospitality moving forward.”
21
DESIGN & TECHNOLOGY
1. PERSONAL, REGENERATIVE, CALM SPACE The bathroom emerging as an increasingly important space for personal regeneration and privacy; there has been a shift towards creating a sensory bathroom experience where body, mind and soul can relax and recharge with the aid of nature-inspired fittings, lights and features. Furthermore, bedroom design is being influenced by increased understanding of the importance of sleep on one’s personal health. There has been a movement towards integrating natural elements and rustic materials such as wooden floorboards, brick and aged stone walls, plus neutral and soft charcoal colours in these spaces.
2. FENG SHUI The ancient art of spatial arrangement and its effect on the flow of energy has been gaining popularity for a number of years. There is now significant interest in harmonising guestrooms to make them clutter-free, clean spaces with good quality air and light; allowing travellers access to a universally-welcoming space, where they feel at ease and relaxed when staying away from home.
3. DIGITISATION Changing the way people communicate and connect, digital technology has provided designers and architects with more tools to create individual and customised spaces. The seamless integration of technology within a guestroom or suite is now more commonly seen in every room from the bedroom to a bathroom. Electronically-controlled fittings are becoming increasingly common for lighting and airflow, with complex systems often being combined and operated via universal touch screen panels in central locations.
22
hospitalitybusinessme.com
DESIGN & TECHNOLOGY
TRANSFORMING TRENDS THE DESIGN SECTOR IS CONTINUOUSLY ADAPTING TO PERSONALISED PREFERENCES AND HOSPITALITY GROUPS ARE COMPETING MORE THAN EVER, SIMPLY TO STAY AHEAD. ORGANISERS OF SAUDI ARABIA’S EXCLUSIVE INTERNATIONAL DESIGN EVENT, DECOFAIR 2014, WHICH TOOK PLACE LAST MONTH, SHARE THE TOP FIVE TRENDS INFLUENCING THE MIDDLE EAST MARKET TODAY
4. SUSTAINABILITY Today, the issue of sustainability is at the forefront of society, leaving the design industry pressured to implement environmentally-responsible practices. Catering to the requests of hoteliers, designers now have increased awareness and understanding of materials, using products based primarily on sustainability and recyclability factors. Additionally, architects and designers are more focused on maximising the use of natural light, which not only reduces energy consumption, but also contributes to the health and wellbeing of the guests.
5. ARABESQUE Architects and designers in the Middle East are embracing traditional design, especially in the hospitality industry, as the region experiences high growth in tourist and expatriate numbers. Largely aware that visitors enjoy immersing themselves in the local culture, many designers are encouraged to fuse traditional Arabic style with modern influences through the use of mosaics, intricately-carved furniture, Arabic calligraphy, rich upholstery and curtains, hanging lamps, Arabic trimmed doors and windows, and the recreation of the Majlis. This contemporary re-interpretation is giving rise to a new and distinctive Arabian style.
hospitalitybusinessme.com
23
DESIGN & TECHNOLOGY
STYLISH SERVICE FROM CHRISTIAN LACROIX FOR SOFITEL TO GWEN STEFANI FOR W’S HOTEL BARS, SIGNATURE STYLE IN 5-STAR SERVICE IS NOTHING NEW, BUT W MALDIVES’ COLLABORATION WITH INDIAN/KUWAITI DESIGNER TAHIR SULTAN, BRINGS A TOUCH OF CLASS
H
e was the first Kuwaiti designer to grace London Fashion Week in 2012 and has interned with John Galliano and Alexander McQueen. Now Tahir Sultan is turning his hand to style-sensitive hospitality with a uniform collection for W Maldives; the boutique lifestyle, paradise island get-away, run by general manager Jean-Marc Ma-Poon. Debuted at Fashion Forward Dubai in October, Sultan’s collection hits Maldivian shores this month. The fashion knits graduate from Central Saint Martin’s School of Art and Design in London, named the collection “Infinite Days and Infinite Nights”, taking inspiration from the hotel and its natural surroundings. According to the hotel, his flip-flops are a must-have item on the island, inspired
24
DESIGN & TECHNOLOGY
The collection will be worn by all guestfacing associates at the W Maldives property.
hospitalitybusinessme.com
25
DESIGN & TECHNOLOGY
TAHIR SULTAN IS TURNING by the house reef he saw when diving at the property; the colours on the sole of the shoes are apparently completely unique to the Maldives. Explaining the design concept and how it complements that of the property, GM Jean-Marc Ma-Poon, says: “We are striving to provide our guests with an escape from reality. Guests have the opportunity to experience the tranquillity of the destination by our iconic overwater AWAY Spa, our private island Gaathafushi, our luxury sailing yacht ‘Escape’ and private pool in each retreat, perfect for a chilled out afternoon. Saying that, we also embrace our passion for music, design and fashion by offering unique design concepts around the island such as the retreat re-style, Alec Monopoly, and so on. “We also host renowned resident DJs to provide our guests with the opportunity to chill out to soft beats at sunset session in SIP Bar or to party the night away in 15 Below, our underground nightclub. In short we provide a luxury escape that is fit for jetsetters, romantics, explorers, Yogis and the trendsetters who live and breathe the energy and vitality of the W brand.”
26
HIS HAND TO STYLE-SENSITIVE HOSPITALITY The uniforms are inspired by the Madivian islands and the W brand.
hospitalitybusinessme.com
DEVELOPMENT & INVESTMENT
CRUISE CONTROL FORECASTS BY ABU DHABI TOURISM AND CULTURE AUTHORITY ESTIMATE THAT EACH SHIP TO VISIT THE EMIRATE’S NEW PORT ZAYED WILL GENERATE $21M IN POTENTIAL TOURISM REVENUES. FOLLOWING THE ARRIVAL OF THE FIRST SHIP OF THE 2014/15 SEASON, SULTAN AL DHAHERI, ACTING EXECUTIVE DIRECTOR OF TOURISM AT ABU DHABI TOURISM AND CULTURE AUTHORITY, TELLS HBME ABOUT THE DEVELOPMENT
I
n September 2014 the world was shown the first glimpse of Abu Dhabi’s new permanent cruise passenger terminal, Port Zayed. The concept design was unveiled to crowds at flagship industry convention Seatrade Med, held in Barcelona, Spain, marking a seminal moment for the region’s cruise industry. The 2014/2015 cruise season is set to be the busiest yet, with 93 ship calls scheduled and 220,000 passengers
expected. This is an increase of 24% and 16% respectively, as the 2013/2014 cruise season saw 189,709 passengers and 75 ships visit Abu Dhabi. The new terminal is due to be fully operational by the 2015/16 season and by the 2019/20 season more than 300,000 passengers are expected on 130 scheduled ship visits. Developed by ADPC and supported by Abu Dhabi Tourism and Culture Authority
The Port Zayed Terminal concept design, as unviled in Barcelona this year. Above, the first ship of teh 2014/5 season arrives.
(TCA), the new 8,000sqm cruise terminal at Port Zayed will feature 24 hour operations and customs, a channel length of 11 nautical miles, with three dedicated cruise berths and no height restriction. A promise of “seamless disembarkation” is supported by a new multi-entry visa introduced earlier this year costing $55. It is expected to make tourist travel between the UAE and neighbouring countries significantly
CONFIRMED CRUISE ITINERARIES t Carnival Group t Cunard t Costa Cruises t Holland America Line t MSC t P&O t Princess t Royal Caribbean t Seaborne t Aida
28
hospitalitybusinessme.com
DEVELOPMENT & INVESTMENT
Sultan Al Dhaheri, acting executive director of tourism at Abu Dhabi Tourism and Culture Authority.
easier, removing a primary barrier for the industry’s development. Such features were the result of extensive collaboration between project stakeholders with input from all cruise lines, ship handling agents and ground shorex service providers. Sultan Al Dhaheri, acting executive director, Tourism Abu Dhabi TCA, explains: “The port, but more specifically the cruise terminal, is often the first experience the cruise passenger will have of a destination, so first impressions count. “We are also ensuring an exemplary passenger experience through provision of facilities expected of a leading international cruise terminal. Behind the scenes service is also a priority; baggage handling, immigration and security processing will be seamless,” he adds. The project is also supported by an Industry Development Committee for the sector, engaging both public and private stakeholders to ensure the operators are presented with a destination that is competitively priced, credible and a viable alternative for them to consider.
hospitalitybusinessme.com
TCA is also drafting special home porting conditions and initiatives to incentivise cruise operators, providing a range of value-added services relating to porting, marketing and promotional activities to encourage cruise lines to consider home-porting in Abu Dhabi. “We are committed to developing and delivering joint tactical destination marketing campaigns with individual cruise lines to boost Abu Dhabi’s profile in their destination itineraries and ultimately trigger sales of their product. This is supported through travel trade training, roadshows and workshops, and a comprehensive pro-active publicity campaign across sector publications and consumer media,” Al Dhaheri adds.
FIRST SEAS The launch went successfully with the first ship, MS Rotterdam arriving on October 25. A group of 40 tour operators, leisure managers, consultants and agents participated in the first dedicated travel tour at the port. The ship’s current cruise route started in Rotterdam and will continue from Abu Dhabi toward Cape Town, South Africa with 1,400 passengers and 600 crew. Abu Dhabi’s cruise passenger arrivals have increased five-fold since the sector began in the emirate in 2007 with anticipated arrivals this season reaching 220,000 passengers from 95 vessel calls. Al Dhaheri explains the ambition by
PORT ZAYED: AT A GLANCE
8k sqm CRUISE TERMINAL
11
NM CHANNEL LENGTH
259m CHANNEL WIDTH
3
CRUISE SHIP BERTHS
29
DEVELOPMENT & INVESTMENT
saying: “We already attract some of the biggest names in world cruising. Ultimately, however, our capacity to build cruise tourism business will rely on a combination of good planning, good infrastructure, strong marketing and industry co-ordination. There is no reason why given these circumstances, a target of 300 calls and over 600,000 passengers per year in 2030 would not be achievable.” It is estimated that each ship passenger will spend an average of $300 per shore visit and crew $150, supporting local tour operators, retail, F&B, culture and transport. Cruise and stay itineraries will also bolster hotel performance. “The economic impact of being a turnaround port would be even greater as we would benefit from longer lengths of stay, additional accommodation use and increased vessel servicing. By home porting, this initial research indicates that Abu Dhabi’s cruise credentials will be heightened, contributing upward of $21m in incremental revenue for the tourism sector, per ship,” he adds. As with airlines, the brands bringing the passengers to port will be just as crucial as the port itself. To date, TCA and ADPC has secured itineraries with Carnival Group, Cunard, Costa Cruises, Holland America Line, MSC , P&O, Princess, Royal Caribbean, Seaborne, Aida and TUI, with two further specific growth areas, to tap.
CRUISE PASSENGERS PORTS
2006
2012
2015f
2020f
2030f
DUBAI
8,000
386,000
450,000
700,000
850,000
ABU DHABI
35,000
180,000
250,000
450,000
600,000
REST OF GCC*
8,100
308,000
408,000
498,000
650,000
TOTAL
51,100
874,000
1,108,000
1,648,000
2,100,000
*(Qatar, Oman, RAK)
“We anticipate within the next two years we will attract at least one high end home-porting vessel that will draw its passengers from a variety of international source markets,” Al Dhaheri adds, sharing intentions to promote Abu Dhabi as an alternative home port to destinations such as the Caribbean, Australia, Southern Africa or South America. It’s a stark contrast to the situation only two years ago, when Royal Caribbean was
Abu Dhabi is working with Dubai and Oman to strengthen the regional industry.
30
the sole operator in the region and itself suspended operations due to security and political concerns. Constant promotion by a consortia of quasi government cruise ambassadors from Abu Dhabi, Dubai and Oman have been crucial to the sector’s success since and their efforts are beginning to pay since the establishment of the Cruise Arabia alliance. Al Dhaheri recalls: “By working in partnership with our colleagues in Dubai and Oman, we can present a strong and captivating regional destination that has the ability to compete with the world’s primary cruise hotspots. “The Cruise Arabia alliance and our collaborative approach is already delivering results. We are focussing on raising awareness of the diverse shorex experiences the region can offer passengers. This focus will embrace international, regional and domestic markets to generate demand and create a commercially viable and competitive destination for the world’s leading cruise lines.”
hospitalitybusinessme.com
Would like to thank all our sponsors.
dwhc.ae/sponsors
ANALYSIS
32
hospitalitybusinessme.com
ANALYSIS
FORWARD TO 15 AS 2014 DRAWS TO A CLOSE, MELANIE MINGAS, TAKES A LOOK BACK AT A BUSY YEAR AND INVESTIGATES THE KEY TRENDS AND DEVELOPMENTS THAT WILL SHAPE 2015. INFOGRAPHIC BY RUSHIKA BHATIA
hospitalitybusinessme.com
33
ANALYSIS
2
014 was a year of big talk. From the announcement of record breaking projects across the region, to Dubai’s worst hotel occupancy in almost two decades, the highs and lows were diverse and surprising. Commentators, asset developers and hospitality owners, are today detaching themselves from the trend predictions of 2013, which saw guest facing apps, Expo2020 and Tripadvisor occupy a significant amount of focus and are instead looking at the wider development and integration of the hotel industry, with those of the leisure, family and business tourism markets. This year’s ATM and AHIC centred around one message: growth. Rotana, FRHI, HMH, Hyatt, JA Resorts and dozens of others announced significant expansions plans across and beyond the UAE, with other hotspots including Saudi Arabia, Indian Ocean and Oman. Many of those announcing expansion plans named the MEA region as their
fastest growing globally. Supporting these plans came news of a wave of new leisure and theme park developments, including the gargantuan Mall of The World, announced in July as the world’s first temperature controlled city that will also be home to the world’s largest mall – the third time Dubai will have won such a record. Such projects will be significant in localising the success of a global leisure and entertainment industry said to be worth $38.1bn over the next three years. A few short months later came Cityscape Global, which saw the announcement of theme park and leisure projects that will re-define the UAE’s hospitality landscape.
MICRO MACRO The region’s usual level of immunity, which has seen a bounce back from economic downturns and geo-political crises has begun to wane somewhat. ,Q $EX 'KDEL GLYHUVL¿HG VRXUFH PDUNHWV continue to drive the success of Yas Island,
Yas Island
34
with a 14% growth in Chinese visitor numbers to the island in the last year. More than 51,000 Chinese tourists checked into Abu Dhabi hotels in H1 this year. Yet there is caution among Yas Island hoteliers over the projected visitor numbers Aldar Properties says the island’s new mall will bring. In its first 12 months, 20 million people are expected to descend on the new retail and leisure destination and Aldar has calculated these visitors will equate to thousands of additional room nights for the island’s hotels. However the number of new hotel developments in the locality and the conversion of projected to actual visitors could weave a different narrative as 2015 plays out. In contrast, Saadiyat Island is poised to take centre stage in 2015 as the completion of its museums nears. In Oman, warnings voiced in Q4 predicted too few hotels and flights would cap the local market’s potential and ability to achieve growth targets. The warnings were heard despite the high hopes of 2013, when the Sultanate changed its weekends to align with the UAE and rest of GCC, therefore enhancing the ability to align rates and capture a greater weekend market. Across the wider region, investment in the African market could be undermined by the ongoing Ebola crisis sweeping through the continent’s westerns countries; continuing violence in Iraq and Syria could force drastic measures in Turkey and a significant drop in the price of oil could throw many of the GCC’s development budgets into turmoil. Standard and Poor recently revised its Brent crude oil price to $85 per barrel for 2014 and $90 per barrel for 2015 and beyond however, in contrast the Brent price is currently hovering around $83. Any price below $85 has been rumoured to impact the development plans of at least half the GCC countries, with Saudi Arabia no doubt expected to bail out its most vulnerable neighbours. Warnings from the IMF in October projected a $175bn shortfall and when
hospitalitybusinessme.com
ANALYSIS
Proposed Bollywood parks entry
FIVE TO TEN YEARS AND THOSE AREAS WILL BE INTERESTING AND THAT’S WHERE INVESTORS WILL LOOK AT YIELD AGAIN IMF Middle East director Masood Ahmed spoke at the launch of the regional economic outlook in October this year, he warned that if prices hit $75 for a “prolonged” period, GDP would be affected across the Gulf, reducing fiscal surplus from $275bn to $100bn. Further complicating the picture, the rise of AirBnB and Dubai’s delay introducing its Holiday Homes regulations, will continue to play out in 2015, says Martin Ostermann, Middle East development and strategy for Meliá Hotels International. Ostermann explains: “I think every investor and developer will be looking to this in the market, which may open a completely new dimension. The holiday homes licence has gone very quiet and every time you mention it to somebody
they don’t know what to do with it but it would bridge the real estate and tourism industries.”
SME SPRINGBOARD Using the hospitality industry to drive local business, SMEs outside of Abu Dhabi and Dubai, flourished this year through a series of grants from Khalifa Fund and the promotional platform of the Dubai World Hospitality Championship. The event has allowed stay at home cooks and chefs to sell their traditional Emirati foods to shops, restaurants and hotels and in this year’s competition the UAE National Team took the top spot internationally. The outlook for hotel revenue is also looking strong with predictions that internal struggles in the OTA market could
see market dynamics and business models forced to adapt. Taras Ettl InterContinental Hotel Group’s VP development MEA, predicts: “Investors and operators are discussing this passionately, both in meetings and between themselves, but OTAs are simply here to stay. “Like any other successful business model, they will also get competitors in future and they will face pressure to lower the exorbitant fees they charge to the hoteliers. Operators are asking about the value OTAs actually bring and nobody has an answer for it. For the longest time, this has been the threat that wasn’t taken seriously but now it’s directly demanding everybody’s attention.” Continuing to forecast greater internal competition and a resulting drop on B2B rates, he adds: “I am confident their rates will come down. One thing everybody has learned from the operator side is that you need to think constantly about how you position yourself and invest to upgrade your own technology. We are investing billions to try and see we are a step ahead,
35
ANALYSIS
Kingdom of Legoland Dubai
instead of chasing such phenomena.” 2014 also paved the way for the leisure industry’s strongest performance yet in 2015 and beyond. A number of projects were announced from global brand tie-ins to world record breakers and entirely new areas such as Expo City and D3 across the UAE and wider GCC. Commenting on the location of these and other developments, Ostermann says: “If we go into the micro in Dubai, focus will remain on the seafront where today you see single, two story commercial and residential developments on prime land. “We are definitely looking quite positively at the D3 Design District and more cautiously, but with an interest, at the Expo City area and Jebel Ali expansion. I think we will see growth within the existing boundaries of Dubai as well as on the perimeters.” Noting the successful urban regeneration of cities such as Doha, Ostermann says similar models could be replicated in areas such as Deira,
36
capitalising on heritage rather than developing away from it. “We wouldn’t be surprised if that follows the natural progression of cities like London or New York, where you have that dedicated are of the city, everybody lives outside and then F&B venues open up and it becomes livelier. Five to ten years and those areas will be interesting and that’s where investors will look at yield again.” What all this combined provides the market – and the local business entities behind it – is opportunity. The local market is a positive stage for investment and the subsequent opportunities for operators are growing. Radisson Blu Dubai Deira Creek GM Tim Cordon says: “Initially, growth was sparked by landmark 5-star properties, which introduced demand and drove high rates. We then moved into differentiation, with mixed use, multiple brands and a product mix. “You could argue the next stage has already started, with serviced
apartments and mid-market hotels, further diversifying the offering, and the final stage will be stabilisation. This is outside of any global economic factors and will bring market sophistication. As we head towards 2020 that’s where we are going.”
INTERNATIONAL EYE Elsewhere, this year’s trade shows saw the textbook discussions on guest use of iPads and Gen Y travel trends, but the conversations with more substance gravitated around the rights of tourism industry workers. Spurred by the introduction of minimum wages in US cities – unions secured up to $15/ hour for hotel workers in LA, for instance, one of the highest in the country. Debate in the Middle East is still focused on the payment of service charges and retention of trained staff by new neighbouring hotels offering marginal salary increases. This will become increasingly critical as more hotels look to outsource service staff and manual labour, thus reducing
hospitalitybusinessme.com
ANALYSIS
their exposure to the industry’s practices and essentially turning a blind eye to the welfare of those working on its premises. At WTM last month, a session on tourism industry employment became a platform for Wolfgang Weinz from International Labour Organisation to make the following statement: “If these staff are not looked after, this will reflect on how they interact with your guests. What brings people back is the memory of whether we are well treated. You don’t need to be a hotel tourism expert to assess or to know if the atmosphere is friendly and helpful, even children can tell.” Other areas for concern saw discussions held on animal welfare and environmental protection mechanisms. Elsewhere, analysts have been talking about everything from “Poshtels” – design-led hostels, predominantly in the UK – to the potential of new messaging apps in markets such as China, and the e-commerce impact of wearable tech. As it draws to a close, it would be safe to say 2014 was a year of ups and downs both here and overseas and the impact of everything from IMF forecasts, to disease and geopolitical and social developments, were even more evident in industry. In a world where everything is increasingly interconnected, the ability of such factors to cause havoc on travel trends and essentially, industry performance will only continue and, as so, beyond our control. Where focus should lie moving forwards is in aligning with how the consumer is re-shaping the future of business. The message dictated by an increasing share of the seven billion people on earth is one of CSR and ethical trading. Outside the Middle East, people are increasingly, genuinely, worried about climate change, supply chains, the safety of their food, their personal and national security, tax evasion. The list goes on. In a volatile world, the ability of a business to mitigate these concerns, to any extent, could work wonders.
hospitalitybusinessme.com
2015 OPENINGS: THE HIGHLIGHTS
t InterContinental Dubai Marina, opening Q1 2015 (pictured) t Palazzo Versace Dubai, opening Q1 2015
t R Hotels property, opening: Q2 2015 t St Regis Dubai, opening Q2 2015 t W Hotel, opening Q3 2015 t The Westin Dubai, opening Q4 2015
InterContinental Dubai Marina
37
INFOGRAPHIC
LOOKING TO THE FUTURE TRENDS, DEVELOPMENTS AND OPPORTUNITIES
The GCC hospitality industry is expected to grow at an annual rate of 9.5% to $35.9bn by 2018. Average occupancy rates are likely to be in the range of 68% and 74% between 2013 and 2018 while ADR is likely to average between $225 and $263 during the same period. 2014 HIGHLIGHTS
Market occupancy and maturity – Dubai recorded worst monthly occupancy in July 2014
61% 5-star
Lack of transactions in hospitality industry
30%
9%
4-star
3-star / budget
Diversification D ive v rsi rsific ficat fic ation at o of on o hotel products –m more ore e mi m midscale i dsc d ale than th an lux lluxury lu u ry in i total current pipeline
Sources: STR Global, Frost & Sullivan, Viability, Colliers, TCA Abu Dhabi, Alpen Capital, PwC
38
hospitalitybusinessme.com
INFOGRAPHIC
KEY TRENDS TO BE EXPECTED IN 2015
WHO WILL BE LEADING THE PACK?
SERVICED APARTMENTS
TOP 3 GCC OPERATORS TO 2020, BY KEYS CONFIRMED
60%
17%
9.593
7,912
7,707
of regional supply in Dubai
expansion of Dubai inventory to 2018
Hilton
Starwood
Marriott
36%
83%
Doha inventory to 2017
of demand in Saudi Arabia comes from local market
WELLNESS TOURISM
$50BN
10-15%
global industry
annual increase in medical tourists
500,000
22
annual visitors forecast for UAE by 2020
hospitality earmarked for Dubai
TOP 3 DEVELOPMENT CITIES, BY KEYS CONFIRMED
28,419
13,724
Dubai – Top 3 chains Marriott 2,596 / Starwood 2,530 / The Address 2,448
Makkah – Top 3 chains Hilton 3,378 / Anjum 1,743 / Marriott 1,497
10,777 Doha – Top 3 chains Hilton 1,385 / Katara 1,142 / Rotana 1,100
PROJECTS INFRASTRUCTURE DEVELOPMENTS
$804.9BN
$20BN
$140BN
global industry
investment in Qatari tourism infrastructure
on transport infrastructure
$32BN Continued development of DWC area airport project to be supported by new residential and business district
REVENUES
Mall of The World – 180m visitors 8m sqft mall, 100 hotels, 20,000 hotel rooms, 3m sqft medical tourism district, Meraas Dubai Parks and Resorts – $2.7bn total project, including: Motiongate, Bollywood Park, LEGOLAND Dubai Canal – $5.4bn, 75km length, four hotels, 450 restaurants IMG World of Adventure – $1bn entertainment and leisure hub could attract 20,000 tourists a day, year round, park of City of Arabia Bluewaters – to feature world’s tallest big wheel, Dubai Eye. Project could cost $1.6bn Majarat Oman – $103m project to attract up to 500,000 visitors annually
$22.8BN TO $35.9BN Total regional room revenues by 2018
hospitalitybusinessme.com
Louvre Abu Dhabi – part of Saadiyat Cultural District, a $27bn development set on Abu Dhabi’s next big island destination
39
EVENTS
COMING TOGETHER MARKING A STEP CHANGE IN THE GROWTH AND DEVELOPMENT OF THE UAE PROFESSIONAL HOUSEKEEPERS GROUP, A NETWORKING EVENING BROUGHT PROFESSIONALS TOGETHER.
F
ounded in May 2003, the UAE Professional Housekeepers Group is commited to provide a platform for exchange of best practices as well as provide the ability to network among housekeeping professionals in the UAE. To do this, it is working on developing a regional association of housekeeping professionals, encouraging UAE nationals to consider a career in the hospitality profession, providing a forum for the exchange of information and ideas, promoting leadership, education, resources and opportunities and actively contributing to the implementation of environmental friendly work practices As well as ensuring that UAE housekeepers are not only up to date with the latest developments in the cleaning industry but are also aware of the latest trends for guest amenities and operating equipment, a key on-going role of the Group is to share experience and best practice amongst members. The first major stage in this
40
development was a networking evening, sponsored by Rikan, held at the Al Murooj Rotana in Downtown Dubai on the 26th November - the first of a regular series. Chairwoman and driving force behind the Group, Tatjana Ahmed, welcomed the 40 or more housekeeps to the evening and gave a brief update on some other activities, before Russel Stokoe, Marketing Manager (Key Accounts) from Rikan gave a brief presentation in which he stressed that, despite the sponsorship, Rikan staff were there to enjoy the evening rather than make a sales presentation. He then called for volunteers for an ice bucket challenge - this challenge, sometimes called the ALS Ice Bucket Challenge, involves dumping a bucket of ice water on someone’s head to promote awareness of the disease amyotrophic lateral sclerosis (ALS) and encourage donations to research. Five brave souls volunteered to take the challenge with Rikan committing to donate Dhs 500 for
each of them. Doused in icy water, the volunteers were: £ Venkatesh Parthasarathy "TTJTUBOU &YFDVUJWF )PVTFLFFQFS 'JSTU $FOUSBM 4VJUFT £ Lakmal Mawella )PVTFLFFQJOH .BOBHFS 5IF 1BMBDF %PXO 5PXO £ K iran Patil "TTJTUBOU )PVTFLFFQJOH .BOBHFS (SBOE )ZBUU %VCBJ £ D ilshan Fernando )PVTFLFFQJOH .BOBHFS . 4FSWJDFT £ S atheesh Ghandi "TTJTUBOU )PVTFLFFQJOH .BOBHFS 1BSL )ZBUU "CV %IBCJ
Each was also given a voucher to spoend on Rikan products. The money raised is being given to a charity of the UAE Professional Housekeepers Group’s choice. After a relaxed tone had been set for the evening, attendees then enjoyed a buffet meal and the opportunity to mingle and network.The next event is being held on the 14th of December, venue in Dubai to be confirmed.
hospitalitybusinessme.com
EVENTS
THE COMMITTEE MEMBERS Tatjana Ahmed (SBOE )ZBUU %VCBJ $IBJSXPNBO BOE GPVOEJOH NFNCFS Jeanette Clift "M #VTUBO 3PUBOB )PUFM 4FDSFUBSZ BOE GPVOEJOH NFNCFS Laetitia Lasry 5IF 1BMBDF %VCBJ .FNCFST 4FDSFUBSZ Nadine O’Connor +VNFJSBI $SFFLTJEF )PUFM 5SFBTVSFS Pamini Hemaprabha ,FNQJOTLJ )PUFM .BMM PG UIF &NJSBUFT *4 $PNNVOJDBUJPO
hospitalitybusinessme.com
41
EVENT
UAE WINS WORLD HOSPITALITY CHAMPIONSHIP UAE NATIONAL TEAM CLINCHES THE TOP SPOT IN ITS SECOND COMPETITION AT THE INTERNATIONAL DUBAI WORLD HOSPITALITY CHAMPIONSHIP
T
he UAE culinary team has been named the winner of the Dubai World Hospitality Championship, beating some of the world’s best chefs in the International Competition. They weren’t the only Arab team to be highly commended in the competition with national teams from Syria, Tunisia, and Kuwait also scoring highly. Ahmed bin Hareb, President of Dubai World Hospitality Championship, said: “We are pleased with the outcome of this year’s Dubai World Hospitality Championship. It was very inspiring to watch our local, regional and international participants’ creativity, innovation,
42
perseverance and sportsmanship as they competed in each category. Their worldclass talents and skills in the fields of hospitality and culinary arts are worth noting. DWHC was also successful in terms of showcasing our local traditions to our international guests. We hope to exceed the success of this year’s edition next year, in line with our unyielding commitment to position Dubai as a leading international destination for hospitality and industry.” The competition took place from October 30 to November 1 at the Dubai World Trade Centre. The closing day saw the visit of HH Sheikh Mohammed bin
SMART JUDGING The judging committee at the Dubai World Hospitality Championship used smart technology during arbitration of the events competitions. The arbitration process at DWHC 2014 was based on various criteria, including taste, preparation, time, quantity of food, presentation, cleanliness, color, smell and coherence. Smart and electronic equipment based on smart arbitration application and programme were used.
hospitalitybusinessme.com
EVENT
The three day championship welcomed royalty, celebrity chefs, international chefs, and local Emirati performers.
hospitalitybusinessme.com
43
EVENT
Rashid Al Maktoum, Vice President and prime Minister of the UAE and Ruler of Dubai, for the second consecutive day HE Sheikha Lubna bint Khalid Al Qasimi, Minister of International Cooperation and Development and Head of UAE Committee for the Coordination of Humanitarian Foreign Aid; and Mona Ghanem Al Marri, Director General of the Media Office of Government of Dubai, also attended the event, along with leading figures from Vogue Fashion Show. The championship witnessed 12 globally renowned culinary masters, Emirati professional and amateur chefs and more than 700 chefs vying for top honours through showcasing their creativity, mastery and professionalism in crafting international and Emirati cuisine. Importantly, DWHC is the first and only event of its kind that highlights the rich and intricate traditions of Emirati cuisine.
WINNERS t Tradition Cooking Category of the Emirati Competition: Umm al-Quwain t University and College Category: Dubai t Team Category: Ras al-Khaimah t Family Category: Dubai t Public Cuisine Category: Dubai t Professional Category: Aisha Saeed Suroor Al Katbi, Sharjah t Amateur Category: Saeeda Mufreh Al Musaferi t Gulf Creations Category: Kuwait t Food Innovations Category: Halima Ali Al Dhahiri, Fujiarah t International Competition’s top recognition: UAE t DWHC Photography Competition: Abdullah Al Raisi, Mohammed Al Suwaidi and Em-On Gabriel won the first three places, respectively. t Heritage Category: Baraa’ Al Aisawi in
HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and prime Minister of the UAE and Ruler of Dubai, HE Sheikha Lubna bint Khalid Al Qasimi, Minister of International Cooperation and Development and Head of UAE Committee for the Coordination of Humanitarian Foreign Aid were among the VIPs.
Hospitality; Roger Alfonso and Ahmed Al-Khazar in the second and third places.
44
hospitalitybusinessme.com
EVENT
Celebrity chefs included Chef Osama Al Sayed (opposite page) and Chef Joe Barza (below).
hospitalitybusinessme.com
45
HoD
A WELCOMING RECEPTION EQUIPPED WITH 11 LANGUAGES, ZEMRI DAUTI SPEAKS ABOUT HIS EXPERIENCES AS CHIEF CONCIERGE AT MÖVENPICK TOWER AND SUITES DOHA, AND HOW OPERATING IN A DEVELOPING MARKET CAN MAKE KEEPING UP A CHALLENGE
W
hat’s the most enjoyable part of your current role?
Interacting and engaging with guests from many different backgrounds and cultures. Communicating with most of them in their native language gives me an exceptional pleasure and this is absolutely the most enjoyable part of my role as I can speak 11 different languages. What’s the greatest challenge you face day to day in your role?
Our service quality is something that we don’t compromise under any circumstances in our property, striving to satisfy each and every guest and providing equal levels of service quality to all our guests. So at times, simultaneously attending to everyone in a timely manner can sometimes prove to be a bit of a challenge, but this is part of the job that we love to do, pushing yourself and the team to ensure that the guest’s needs are met. What are the unique obstacles you face working in your current role?
46
Because Doha is in a constant progressive state and as many would call it ‘booming’, there is always something going on in the city; whether it’s a new restaurant opening, a new event or even changes in city/desert tours. As a concierge, you need to ensure that you are in the know and very well aware of all these things happening around you. It’s pretty exciting actually, because you get to be very well informed about everything that’s going on around you in the city, and of course, to have a front row seat and to be part of the development of the country. How can your role be developed further to enhance the hotel’s bottom line?
Concierges have a special bond and relationship; we should all continue to work together to show visitors and travellers that we are an untapped source of unique information; sure you can look up just about anything online these days, but a concierge can give you that extra personal touch that no machine can ever give you. Being part of the Les Clefs d’Or Qatar, hopefully the role of the
PROFILE Name: Zemri Dauti Job title: Chief concierge of Mövenpick Tower and Suites Doha Time on property: 4 years Time in industry: 11 years Career to date: t 2.5 years with Intercontinental Beach and Resort - Doha t 1.5 years with Sheraton Jumeirah Beach and Resort - Dubai t 1 year with the pre-opening team at Anantara Qasr Al Sarab Desert ResortAbu Dhabi t 1 year with Anantara Desert Island t 1 year with Armed Forces Officers Club - Abu Dhabi t 4 years with Mövenpick Tower & Suites Doha
concierge will continue to shine in hotels, and continue to give that distinctive and personal flair to what we do.
hospitalitybusinessme.com
UAE PROFESSIONAL
HOUSEKEEPERS GROUP
15-12-2014
GET CONNECTED - WITH A NETWORKING EVENING TO REMEMBER Come along to the Movenpick Hotel, Jumeirah Lakes Towers at 6:00pm, December 15 for an evening of information, fun and the best networking in your sector! You’ll not only get professional updates from top keynote presentations, but an exclusive VIP facilities tour. Then - not to be mIssed - the chance to hone your motivational skills with an expert session from top Life Coach and former world-class footballer Allan Nielsen. Plus, of course, networking while enjoying canapes and drinks in the luxurious, 5-star setting. SPONSOR
Keynote agenda for the UAE Professional Housekeepers’ Group networking evening Registration and networking: 6:00pm Welcome keynote: 7:00pm Enjoy professional presentations and VIP tour Exclusive Life Coaching and Mentoring session with Allan Nielsen Venue: Movenpick Hotel, Jumeirah Lakes Towers, Dubai
BROUGHT TO YOU BY
TO FIND OUT HOW TO PARTICIPATE IN THE DECEMBER EVENT PLEASE CONTACT Sales Manager Julie Caulton julie.caulton@ cpimediagroup.com D: +971 4 440 9112 M: +971 56 778 9793
Organised by:
ROUNDTABLE
DRIVING HEALTHY PROFITABILITY HOW CAN THE HOSPITALITY INDUSTRY MAXIMISE CASH FLOW AND DRIVE PROFITABILITY THROUGH EFFECTIVE PROCUREMENT STRATEGIES, STAFF PRODUCTIVITY AND WASTE MANAGEMENT? HOTELIERS, SUPPLIERS AND FACILITY MANAGEMENT COMPANIES MEET TO DISCUSS THE IMPORTANCE OF MONITORING A HOTEL’S BOTTOM LINE.
W
hich area of your business is the largest cost centre?
Joseph Fernandes: Definitely the hotel’s food and beverage division. Denis Nobre: The last two years we have noticed a substantial rise in payroll costs, it’s always accounted for around 25% of our overall revenue, however we are now witnessing a trend of this hitting 29-30% in some of our hotels. This is mainly due to rising costs of housing our staff, visas
expenses and transportation costs. Shahzad Khan: We are working internally every year to lower our utility costs, which currently account for 45% of our overall revenues. How can efficient human resource management contribute to healthier revenues? S.K: Accor has a regional academy for training, however the difficulty we find
in the Middle East is that many staff are continuously on the look-out for higher salaries. They are not entirely interested in the training provided because they know their role with us will not stretch longterm. So essentially it’s a waste of money for those transient staff and hurts our bottom line. D.N: I agree with you, and with labour costs increasing rapidly we’re sometimes forced to comprise when it comes to
Top left to bottom right: Rashid Bahar, business development manager, TSSC; Steve Lynch, managing director, Orwell International; Belinda Ellaby, client relationship manager, Dynamic Learning; Shahzad Khan, director of finance and administration, Pullman Dubai Deira City Centre; Juan Carlos, Orwell International; Joseph Fernandes, purchasing manager, Radisson Royal Hotel; Denis Nobre, financial controller, Radisson Blu Dubai Media City; Ranjit Sharma, purchasing manager, Dusit Thani Dubai; Craig Campbell, senior manager FM Operations/Mobilisation at OCS Group; Eden Nebreja, marketing manager, TSSC; Jane Fraser, business development manager, Cannon Hygiene; Virginie Michaud, vice president, project development, Jannah Hotels and Resorts.
SPONSORS
48
Waste Reduction Equipment
hospitalitybusinessme.com
ROUNDTABLE
RASHID BAHAR BUSINESS DEVELOPMENT MANAGER, TSSC
SHAHZAD KHAN DIRECTOR OF FINANCE AND ADMINISTRATION, PULLMAN DUBAI DEIRA CITY CENTRE
training. Our margins are also effected by the need to offer higher salaries in order to attract experienced staff. So we minimise on certain training in order to retain financial balance, which in turn effects standards, making this a very important point of focus in many hotels right now. It’s a snowball effect. Belinda Ellaby: Recent research actually shows that in this region 46% of employees are expecting to move jobs in the next two years compared to the global average of 26%. D.N: I think this is because of opportunities available here. Staff retention is a big issue in this region and in order to fight this we try to push our staff welfare services as much as we can to provide them with a working atmosphere and living environment that they want to stay in. B.E: There is a huge risk of losing staff to higher salaries surrounding this area, particularly in the UAE, however it isn’t all about the money. The quality of life provided, training and working moral all come into play too. Ranjit Sharma: One of our KPIs at Dusit Thani is that a certain percentage, depending on department, must be dedicated to training in order to maintain quality. However, we then run the risk of sending staff for training that costs a lot
hospitalitybusinessme.com
STEVE LYNCH MANAGING DIRECTOR, ORWELL INTERNATIONAL
of money, for them to come back further qualified and then tell us they’re leaving. So we make them sign a contract that notes they will be responsible for training costs if they leave within a certain amount of time following the training.
JANE FRASER BUSINESS DEVELOPMENT MANAGER, CANNON HYGIENE
making them do the unnecessary, or not making them do enough. What are the main obstacles that suppliers face when dealing with new potential clients? B.E: Our relationship is primarily with
How do hotels achieve economies of scale on the training side of the business? R.S: We do appraisals twice per year with
all of our employees and thoroughly analyse their progress, achievements and needs. So we can work out what training precisely is needed, so that we are not
HR and development, however the tender goes to finance and all they look at is that bottom line. They don’t look at the fact that we could be increasing productivity by 10% within ten months or the quality and outcome of things we do, they just see the price. There’s a big issue of getting through.
49
ROUNDTABLE
Rashid Bahar: The main issue we have
with new customers is that they don’t know our background, how long we’ve been in the market, the quality standards we abide by, etc. So, although they like our product, when it comes down to it they go with the supplier who is offering the best price. Sometimes products can look the same but they’re not. So it comes down to price or quality and many times we’re not given the change to explain ourselves because we’re judged immediately on price. Craig Campbell: It also comes down to relationships in this part of the world, who you know and who has used what supplier before. Maximising cash isn’t just about looking at what’s the cheapest right now, because in the long run this isn’t the most cost effective method. Another issue I find in the Middle East is that clients are reluctant to go into longterm contracts. With our services we are able to help our customers substantially over a two to three year period, however very few are wanting to take this leap. Why is this? Virginie Michaud: Jannah is still relatively new, but yes generally we would look at one year contacts. S.K: The difficulty we have entering into longterm contacts with suppliers is that it takes a lot of time to analyse the return coming from this investment. We steer away from anything longer than one year. D.N: It’s the same with Radisson and we’re also given less leeway to enter into long-term contacts. It’s a three year contact, we require head office approval and justification. We try to avoid getting into long contracts so we don’t run the risk of losing money during the course. C.C: Something interesting that is being used in the UK now, but not so much here is penalty and reward management, which means outsourced companies or suppliers work on a KPI scheme in order to ensure goals are met on a monthly or quarterly basis. If they don’t, a penalty is issued. It’s a new scheme and we’re trying to bring it into this market. It’s a motivating way of working for the supplier and peace SPONSORS
50
of mind for the hotelier. B.E: One of the challenges hoteliers
face is that people come to hotels for an experience, and the customer is king. With outlets such as hospitals, people go to them because they have a need, whereas people go to hotels as a luxury, and so as a hotel is my brand is all about service, hoteliers need to be fully in control of who is providing that service. Due to this, many general managers put the majority and pressure of the front of house staff and F&B employees to create the optimum climate and upsell the hotel. However, I question, who is creating the correct climate for these people to work in? It comes from the top and consistency from longterm providers is needed for this. Is it more cost effective to outsource or keep everything in-house? S.K: Outsource. We are currently working
with two or three companies and it works very well, we outsource our engineering department and they are included in everything we do and are treated like our everyday team members. Jane Fraser: What many hoteliers don’t realise, we don’t want to work as a supplier or a contractor, we want to work as a partner and work together with the
hotelier. There shouldn’t be a ‘them’ and ‘us’ when it comes to outsourcing services, it works better as a united team. Hoteliers, do you view outsourcing as a partnership? R.S: Yes, we do feel like our suppliers are our partners because we have to trust them to provide us with what we need. However, it does matter how long you have been working with that company to create a feeling of trust. J.F: Outsourcing definitely comes with its benefits because you have people doing the necessary tasks, however our company is not responsible for things such as their medical insurance, holiday leave, visa requirements, etc. We save on these. C.C: Outsourcing not only generates financial savings, it also promotes less stress for the hoteliers and the leaves them not having to worry about things such as health and safety, etc, as it is the outsourcing company’s job to ensure standards and regulations are maintained. Looking at the process behind recruiting outsourcing companies, how is it possible to break down the barriers between the supplier, HR, procurement and finance departments, to make sure vital information isn’t lost along the
Waste Reduction Equipment
hospitalitybusinessme.com
ROUNDTABLE
S.K: Not so much for us. If ever in need of further assistance Accor has a regional preferred supplier list that we refer to. From a supplier perspective, how do you make your services cost effective for hoteliers?
way? V.M: Although we’re relatively new to
the market, we have implemented weekly meetings with all department heads to ensure effective communication and that things aren’t lost in translation. S.K: We are also starting to do this now, I think it’s a new trend. We directly deal with the client and responsible department at the time of contracting to understand what is going on. If they can prove that it will be cost-effective and offer other benefits, finance does not have a problem
EDEN NEBREJA MARKETING MANAGER, TSSC
hospitalitybusinessme.com
with it. The first priority is the brand and its standards, so this doesn’t necessarily mean always going with the cheapest option. J.F: Our procurement managers come to us with in depth reasons as to why they want to use specific companies, especially if they are more expensive than others.
J.F: Looking at the deployment of labour, it’s making sure you have staff assigned to work at the right times of the day and when it’s busy. It’s about looking at the foot-strategically so that there’s not say 12 staff working the floor early hours of the morning when its quiet, as opposed to 25 during the busy period, this is where we can make savings. C.C: We can also determine things such a labour deployment according to occupancy rates. It’s about efficiency. S.K: We also do this, in low seasons and quiet times of the year such as Ramadan, to make the period more cost effective. So we don’t need the whole housekeeping team on the floor when we’re only at 50% occupancy. How empowered do you find average mid-level management in the hospitality industry? Does everything
How many of your procurement
require head office sign off?
software to streamline the process or is
S.K: It’s a process, everyone has a say
still very much relationship led and who
in what company is chosen during this process, however at the end of the day the
you know?
JUAN CARLOS ORWELL INTERNATIONAL
BELINDA ELLABY CLIENT RELATIONSHIP MANAGER, DYNAMIC LEARNING
RANJIT SHARMA PURCHASING MANAGER, DUSIT THANI DUBAI
51
ROUNDTABLE
final call rests upon the general manager or higher management to make the final call. The GM has to approve everything. Are hotels turning waste into commodity and if so, how? Steve Lynch: In my experience the views of waste management within the hospitality industry has always been looked upon as something with little value and dealing with well-dressed dust-bin men. However in the past three years we’ve noticed a change in this and the waste reduction industry has been refined, particularly in the UK, USA, and now here now that new regulations are coming in to control the management of waste, and they are very strict. Another thing that is changing things is the rising costs of waste collection and disposal. Plus the introduction of heightened health and safety regulations. Hoteliers are now more LQWHUHVWHG LQ WKH SUR¿WDELOLW\ VLGH RI ZDVWH reduction and management. It’s now treated as a serious industry and health and safety made it that way. Do hoteliers see waste management as a potential revenue driver from a cost centre? What strategies do you use? S.K: We do follow Accor’s programme of
Planet 21 and EarthCheck internationally, however it’s all very much company led and has not yet been enforced upon us by the government to further implement
CRAIG CAMPBELL SENIOR MANAGER FM OPERATIONS/MOBILISATION AT OCS GROUP
52
programmes. I think once the authorities take a stronger stance in this sector we’ll see more and more hotels looking for suppliers who can help us with our waste reduction and management. R.S: We work with a company who takes our cardboard, used oil and other specific products, who give us back money for these things. Aluminium cans are collected, and after a period of time we give them all to an initiative implemented by the Dubai Municipality, who weigh the cans and provide us with a certification for being environmentally friendly. Awareness is growing, so I think it’ll just take time to catch on a little bit more.
VIRGINIE MICHAUD VICE PRESIDENT, PROJECT DEVELOPMENT, JANNAH HOTELS AND RESORTS
V.M: We don’t have a specific waste
management structure at the moment, this is one of our next areas of focus. However, we do offer guests the option to no have their towels or bedding changed, etc. This is becoming an ever more important subject and I feel in a few more years the UAE in particular will move forward substantially in this area.
HBME would like to thank Radisson Royal Hotel, Dubai for its warm hospitality and hosting this discussion.
JOSEPH FERNANDES PURCHASING MANAGER, RADISSON ROYAL HOTEL
DENIS NOBRE FINANCIAL CONTROLLER, RADISSON BLU DUBAI MEDIA CITY
hospitalitybusinessme.com
OPERATIONS
TOUR DE FORCE IN HIS 16 MONTHS AS CEO OF ONE OF THE INDUSTRY’S FASTEST GROWING CHAINS, SÉBASTIEN BAZIN HAS SEPARATED ACCOR’S INVESTMENTS AND SERVICE ACTIVITIES AND DEVOTED UNPRECEDENTED RESOURCES TO THE GROUP’S ON-LINE ARABIC PRESENCE. EYEING A 30,000 ROOM PIPELINE IN THE MIDDLE EAST WITH AN GLOBAL OPENING RATE OF ONE HOTEL EVERY TWO DAYS; THE POSSIBILITY OF BUYING OUT ITS NEAREST FRENCH RIVAL; AND ENORMOUS FURTHER INVESTMENTS IN ITS DIGITAL TOUCH POINTS, ONE OF THE INDUSTRY’S MOST POWERFUL CEOS TALKS EXCLUSIVELY TO HBME.
54
OPERATIONS
S
ébastien Bazin is a man who various elements of the business. to be an investor and operator, let’s likes to set goals. In October of He elaborates: “If we want Accor to be use this to a true advantage and not this year French hospitality group able to evolve to be transformed we have a disadvantage. The financial market Accor announced it had achieved its to start with the diagnosis, which is, in is accepting it today because we have milestone of 100 operational and under a very schizophrenic kind of way, that separate reporting, balance sheets, PNL, development hotels in the Middle East. Accor has been conducting two different quarterly numbers in all our different Stop and smell the roses? Not likely. types of business without knowing it activities and they can benchmark each Within weeks of hitting the target, and these cannot be handled by the same unit to its operational targets. Bazin and his team travelled to the region person.” “But you need full transparency; you to announce a new set of objectives, Explaining the mechanics of the profit need to show your weaknesses and your which would effectively double what and loss, revenue and margin service strengths. The market may permit me to they had just achieved. It wasn’t the only model and the balance sheet nature of the keep those [divisions], but I don’t know big news to come from the group since investor element, he adds: “The frame of yet. We are still in the transformation Bazin was appointed CEO in August mind and the experience you need has to period, so we will come back on whether 2013. be done with two different heads and two we should keep both in two or three years Over the last 15 months, Accor has different hands. from now, but not today,” he adds. launched a fully Arabic adaptation of its “It’s only been nine months since the SUBHEAD Web site and booking portal Accorhotels. implementation in February 2014 and Bazin’s appointment initiated what has com, which itself had a target to increase results have been better than expected transpired to be a, relatively, prolonged local sales by more than 50% over the because everybody knows exactly what period of stability for Accor; course of 2014; YTD, the succeeding the leadership of no addition of a 16th language to IN A NUTSHELL, DIGITAL less than four CEOs between Accor’s on-line presence has 2006 and 2013. spurred Web traffic to increase OPPORTUNITY IS NOT A THREAT Immediately prior to Bazin, 55% and bookings by 33%. Yann Caillère, was at the Yet the most significant IT’S FOR ME AN ENORMOUS helm replacing previous chief change was Bazin’s first; executive, Denis Hennequin, an entire restructure of how OPPORTUNITY TO BE MORE on an interim basis between the company conducts its April and August 2013. operations. Essentially, it EFFICIENT AND ENHANCE Since Bazin moved into the was this idea that led to position of CEO that August, his graduation from Accor COMMUNICATION BETWEEN THE Caillère has been named board member of ten years CEO of Parques Reunidos, a and European MD of Colony HOTELIER AND THE GUEST leading leisure operator with Capital, to lodgings company involvement in Dubai’s theme CEO. park pipeline. Proposing a division of Accor’s asset their mission is and we are not going While Bazin staunchly maintains that management and owner services, Bazin to go back on it. We’re going to stay he hopes to lead Accor on a longterm broke down the business, isolating its this way for the next 20 or 30 years,” basis, he is open about disclosing that activities to secure its future growth. In he continues, while voicing caution that every decision he makes is done so with the words of the Wall Street Journal it this is not a one-size-fits-all solution to his own successor in mind. was the act of “splitting hotel rooms from driving profits. There are few regional and global bricks and mortar”. “Most of the hotel industry is 90% leaders active in the industry today who But all wasn’t immediately positive. predominant on hotel service, which is could bring such business acumen to the When the division happened it pushed about being a franchise owner manager; leadership of a global hospitality chain. share prices down 7.5% and rumours the financial market has been demanding Crediting 30 years of finance industry persisted the move was preparation for those companies go asset light so they expertise and an undergraduate degree in a sell off of one of the divisions. But the have a lesser volatility and in the end Economics from the Sorbonne University board was clearly confident of Bazin’s result in greater free cash and margins, of Paris, Bazin also has direct hospitality vision and today evidence is emerging which is good for being a listed entity. experience in the buyout of luxury hotel of the split cushioning market forces on “Since Accor’s DNA has always been
hospitalitybusinessme.com
55
OPERATIONS
chains Fairmont and Raffles, acquisition and hotel asset management of from La Générale des Eaux, Club Méditerranée and Accor, a stake in Lucien Barrière Group and investment in Accor. His appetite for such transactions remains. Since speaking with HBME last month, he has confirmed reports in French newspaper Les Echos, which claimed Accor had submitted a nonbinding bid for its closest French rival in
the budget market, Louvre Hotels, with a $1.5bn buyout of the group and its 1,100 hotels in 47 countries. Bazin is quoted as saying: “They are the number two in France…. We just can’t not look at it”. If Louvre’s owners Starwood Capital proceed with the deal, the total portfolio would count 4,600 hotels globally, which according to 2013-end figures would place the group joint third in terms of hotel properties in the portfolio, tying
with IHG (4,602 properties) and falling behind Choice (6,198) and Wyndham Hotel Group (7,342). But bigger doesn’t always mean better – and it certainly doesn’t promise immunity from the same market forces upon which Accor depends for growth and profitability. While the group is the largest in Europe, changes in French tax regulations this year dented revenues
1 ST OPERATOR IN THE WORLD
460,000
3,600
ROOMS
92
HOTELS
FRANCE
COUNTRIES
EUROPE (EXCL.FRANCE)
1,543 HOTELS 139,940 ROOMS +5,000 PIPELINE
1,063 HOTELS 120,019 ROOMS +21,000 PIPELINE
NORTH AMERICA,
AFRICA AND
ASIA
LATION AMERICA AND
MIDDLE EAST
PACIFIC
341 HOTELS 50,622 ROOMS +17,000 PIPELINE
566 HOTELS 108,870 ROOMS +68,000 PIPELINE
CARIBBEAN
253 HOTELS 42,268 ROOMS +28,000 PIPELINE
1
HOTEL OPENS EVERY TWO DAYS
56
+780 HOTELS IN THE PIPELINE
+ 139,000 ROOMS IN THE PIPELEINE
hospitalitybusinessme.com
OPERATIONS
by a reported 1.8%, when compared to 2013. In better news, HotelInvest properties saw profits rise 1.6%, with the acquisition of 97 new hotels in Europe. While this incident has been less than favourable for the company, particularly at such a delicate point under new leadership, Bazin is quick to highlight that in the long term revenues depend on specific demographics, just as much as external – and shorter lived – factors. In the past Accor has been somewhat reactionary. In 2007, in the face of global recession the group slashed the luxury portfolio operated under its Sofitel flag, from 206 to 120 properties. In light of the performance fluctuations in Europe, could a similar shift in priorities be on the cards now? “Accor never ever scaled back and never will. It doesn’t mean we won’t adapt, but Accor has been a very fast growing machine across 93 countries, we have increased our network by 50% in the last ten years, which is why we are opening at least one hotel every two days. When you go to emerging markets to build your footprint, those ups and downs require you to weather the storm. “You must be loyal to the personnel inside, the government in place, and you have to ensure you adapt to the conditions where you don’t change course and you don’t change your vision because of something happening. Otherwise you are a short term minded business in an industry that is anything but short term,” he says, recalling Accor has been present in the GCC for 35 years, China for 40 years, India for 25 and Latin America for 40. “Business is mostly demography and local economy driven. Accor is 75% depending on B2B revenues, which is the interaction between me as a supplier of hotel rooms to the local SMEs. I’m only 25% depending on leisure markets and when I enter a country, I provide to this country the hotel supply for the needs of the local population, which is why we are so strong into Ibis, Novotel and Mercure,
hospitalitybusinessme.com
because it is the first intentional scaled brand that gives international standard to those enterprises, which they could not have locally.”
IN FOCUS: SOPHIE STABILE Accor Group CFO Sophie Stabile works closely with CEO Sebastien Bazin. She
THE FIVE REVOLUTIONS
tells Steven Pradia about strategic
When appointed, Bazin set a schedule with five priorities to achieve; all of which he happily shared in the public domain. His priorities were: to set the sights of the group; define a new organisation; put into place the necessary mechanisms to support the goals; efficiently respond to the digital challenge while becoming the most advanced group in this area; and, finally, to define the perimeter and coherence of brands.Now the business model is adapted, the second goal with which Bazin can create not only a strong legacy, but repercussions throughout the industry, will see $280m ploughed into the group’s digital presence. Capital expenditure will account for 55% of the total and operating expenditure for the remaining 45%. Launching the Arabic Web site in Q1 2014 was the first step in what is predicted to be a five year digital journey – compared to a three year timeline to transform the business model – requiring a combination of, significant, financial resources and human capital. In fact, one he begins to explain the vision, it is clear all Bazin’s observations of the internet tend to work in five year cycles. “It starts with the diagnosis, which again is a habit of my private equity background. What happened in the last ten years? You had the first digital revolution in 2004 with the innovators, the OTAs. They decided that they should be doing on-line what American Express for example were doing for travellers, facilitating the journey of the clients,” he begins adding that hoteliers paid little attention because the sector took off so fast. The next cycle saw the introduction and rise of aggregators such as KAYAK
finance in international business How are you involved in Accor’s strategic endeavours as CFO? In terms of strategy I work with our CEO quite a bit. When we want to target some new companies we work far in advance. We are often looking at new ideas in order to propose to Sebastian and we have a performance review with all of the people in the company. Every month I do a presentation of our results to discuss the good and bad and also what to expect for the remainder of the year. How has your role evolved? I was not a CFO 15 years ago when I joined the company, I became the CFO in 2010 after the merger. In just these last five years there have been a lot of changes. I work a lot on financing, there are a lot of big things like digital plans and all of the finance team members have a key place in this respect. We work a lot also on putting in place new business and new fees related to franchisees. We work on the business side a lot and also with human resources. I’m focusing on many departments as CFO. At the end of the day trust is involved because so much is shared between Sebastian and I. What types of global challenges do you face? You can’t think only locally but also globally. You have to be very agile. You may have something to address in the Middle East and then something arises in the Asia-Pacific region. You may solve one issue in one area of the globe but then another arises elsewhere. It all makes the job quite interesting.
57
OPERATIONS
and Price Compare, followed by what role in achieving this specific element ago. In a nutshell, digital opportunity Bazin terms the third revolution, “the of Bazin’s ambitions. Adding three is not a threat it’s for me an enormous disruptors”. million members in 2014 YTD, with opportunity to be more efficient and “That is a new revolution which is enhanced benefits for members and the enhance communication between the probably going to have a greater effect imminent partial roll out of Welcome by hotelier and the guest.” than the innovators and the aggregators Le Club Accorhotels, a digital solution Rounding off the changes, Accor and it’s the new customer to customer to make customers’ stays easier through will be managed by a new ten-member model; Air BnB, Uber, Lending Club, smartphone exchanges. executive committee (see box). peer to peer lending services.” It still sounds far from easy and Operationally, the French hotel group Next he predicts, hoteliers must make leaves gaps in the communication plans will move from its current hybrid setthemselves players in the fourth and fifth with non-loyalty member guests. “It’s up to a geography-based organisation, revolutions, rather than spectators. The a matter of how do you talk about your enabling decision-making closer to the overriding question is, “how?” frontline at lower running “But if you want to be a costs. The brands will be RESULTS HAVE BEEN BETTER THAN clustered in three segments: participant, you have to have a vision, what do you want to be luxury/upscale, midscale and EXPECTED BECAUSE EVERYBODY in ten years? Then you need a economy/budget. national plan.” Accor is not the first KNOWS EXACTLY WHAT THEIR Accor’s plan to is be present hotel group to undertake a in all of the customer’s “six significant restructure. While MISSION IS AND WE ARE NOT phases of a reservation”, from Bazin’s plans look decades the pre-plan through to stay, into the future, what the group GOING TO GO BACK ON IT share and return. “Accor is must remain aware of is not present on three out of six. only its muscle, but also its We are present on Accor.com, we are brands; how do they exist; what is it agility. In an industry that has seen a there for the stay because none of the that you want to be communicating to string of revolutions over the last few other players, from the other on-line people about the different shading factors years, the ability to react – with speed revolutions are engaged in the stay between your brand and somebody and assertion – is critical. element and we are there for the return else’s brand. Half of the revenue should The biggest opportunity Bazin sees with our loyalty card members. We need come from your loyalty card customers, on the horizon for 2015 is in the supply to be there for the dream, the plan and currently it’s 25% for us today. American demand dynamic, currently creating a the share,” he adds. companies are 50% because they started hoteliers’ market, with 5% increase in Le Club Accor will play a significant 25 years ago, we started seven years the number of people travelling over the previous decade and a macro rooms supply growth of less than 1% in the last three years and a predicted 1 – 2% over THE NEW ACCOR COMMITTEE the coming ten. “We have achieved a lot in terms of Sébastien Bazin, Chair and CEO HotelServices Royaume-Uni, Irlande, transformations; now we know where we Sven Boinet, Deputy Chief Executive Benelux, Suisse, Russie et CEI are going, we know we have the ambition Officer Transformation, Human Jean-Jacques Dessors, CEO to get there, we have the time because Resources and Legal HotelServices Mediterranean, Middlethe market allows us and believes that Vivek Badrinath, Deputy Chief Executive East and Africa we can deliver. The only thing is that Officer Marketing, Digital Solutions, Michael Issenberg, CEO HotelServices Accor has had many CEOs over the last Distribution and Information Systems Asia-Pacific 15 years, who came to the company Christophe Alaux, CEO HotelServices John Ozinga, Chief Operating Officer of as outsiders,” he says, concluding: “I France HotelInvest will make absolutely possible that my Roland de Bonadona, CEO HotelServices Laurent Picheral, CEO HotelServices successor will be an existing executive. Americas Germany, Poland and Central Europe Accor does not need outside expertise to Steven Daines, Directeur Général Sophie Stabile, Chief Financial Officer run Accor. But that’s a long time away; we’re only just starting.”
58
hospitalitybusinessme.com
The only event designed FOR the restaurant investment community The Global Restaurant Investment Forum (GRIF) will be THE business conference of the Dubai Food Festival 2015, making it the place to do all your deals in 2015. The event provides a unique platform which brings together key stakeholders in the restaurant investment community in one place to share best practice, innovation, knowledge and address current issues that face the sector. The GRIF programme has been built on four key pillars:
Creating successful concepts Generating growth through franchising Internationalizing your business Innovation and inspiration to improve your existing operations
GRIF
GLOBAL RESTAURANT INVESTMENT FORUM 16-18 February 2015 Conrad Dubai
Informative event where you can interact and understand the players in the industry, a unique forum for all that service the Restaurant industry. Tariq Sanad Managing Director, Lime&Tonic
KEYNOTE SPEAKERS 2014
Through an educational and actionable agenda you can learn how to mitigate the challenges faced when expanding internationally, learn from those with their feet already firmly planted in different markets, tap into their local knowledge, and learn how to roll-out your product without selling its soul.
Nicholas Lander – Author of “The Art of the Restaurateur” (Phaidon) and FT Restaurant Correspondent Brian Johnston Managing Director, International, Wagamama
THE EVENT FOCUSES ON HIGH ENERGY FACE-TO-FACE NETWORKING OPPORTUNITIES, ALLOWING YOU TO FORGE NEW AND EXCITING GLOBAL PARTNERSHIPS IN ONE PLACE!
HOSTED BY
Farah George General Manager Food & Beverages, AKI Group
GOLD SPONSORS
6
GOLD MEDIA PARTNERS
Three Starred Michelin Chef Heinz Beck – Waldorf Astoria, Dubai Palm Jumeirah
SILVER SPONSOR BRONZE SPONSOR
MEDIA PARTNERS
Levent Veziroğlu Chief Executive Officer, D.Ream
PR PARTNER
SUPPORTERS
www.restaurant-invest.com
REGIS NOW T TER O WITH SAVE O EARLY UR BIRD OFFER
OPERATIONS
D
ecember 1 2014, marked 15 years since the Burj Al Arab’s first guests checked into the iconic, “7-star”, dhow sail-shaped hotel, that rises 321m into the sky, from its own island located 280m off the shores of Dubai. The hotel was imagined as the building that would define the emirate; paying homage to the trading port’s past with an embodiment of its future as a world class tourist destination that defines luxury itself. It may no longer be the world’s tallest hotel – two Dubai towers have since broken its record – but it will always be the world’s first hotel to surpass 305m in height. An icon of Dubai’s post-oil economy, just as much as its skyline, the hotel that has won 100 awards in its short history is the go-to option for the world’s wealthiest travellers and on December 1, Burj Al Arab welcomed 550 VIP guests at a star studded celebration to mark its latest milestone. Hotel manager Ammar Hilal explains: “All our guests are very well travelled – they have been all over the world and when they come here they have an expectation. To exceed that is the most rewarding thing about running this hotel and it is the highlight of what we achieve. “When the hotel opened and the world first saw it, after so much time invested in creating it on its own island, it was an incredible opening and the statement of what Dubai stands for,” he adds. Most of the last 15 years has been a combination of unimaginable opulence and the things fiction is made of – particularly fiction of the James Bond variety – and many of these moments were played out on a helipad perched 200m above sea level. There was the time Roger Federer and Andre Agassi played tennis there, overlooking the entire city of Dubai; or when an Aston Martin was delivered, by helicopter, to mark the brand’s centenary. According to media reports, for a little over $50,000 guests can use the world’s
60
CELEBRATING THE 15TH BIRTHDAY OF THE WORLD’S ONLY “7-STAR” HOTEL, HBME SPEAKS TO HOTEL MANAGER AMMAR HILAL ABOUT BURJ AL ARAB’S MOST FAMOUS MOMENTS, LEGENDARY GUESTS AND RECORD BREAKING, AWARD WINNING, DAY TO DAY OPERATIONS
hospitalitybusinessme.com
OPERATIONS
hospitalitybusinessme.com
61
OPERATIONS
ultimate balcony as a wedding venue. Back indoors, the hotel has gold iPads, private IMAX cinemas in selected suites, 17 pillow options, 50 species of fish and 1,790sqm of gold leaf embellishing its interiors. Keeping up the momentum, guests can help mark the hotel’s 15th birthday throughout 2015 with a Best of The Burj package, including Rolls Royce Phantom pick-up, a luxurious suite, six course degustation dinner and a signature spa experience. The hotel is also marking the occasion with a donation of 15 experiences for up to four guests per group, to children supported by the Make A Wish foundation. “Since 1999, we have been attracting the most sophisticated clientele with a product that is out of the ordinary. You offer unique experiences in the most surreal surrounding imaginable, but it’s the service delivery that makes our guests feel special. We have kept the momentum
BURJ STATS
going for being a preferred location for special occasions. We are very versatile and so can attend to many different tastes,” Hilal continues.
THE SCIENCE OF BLING Designed by Tom Wright of WS Atkins, it took longer to create the reclaimed island that would set Burj Al Arab apart from Jumeirah’s neighbouring developments, than it did to build the 250,000 tonne tower. With 3,500 workers on site at any given time during the construction period, the hotel is also an modern engineering marvel. From manipulating water in the lobby fountains to make it behave like liquid glass, to the AC in the atrium, this isn’t just a luxury hotel, but a living science lab. The temperatures inside the tower, regardless of the temperatures outside, remain at 23°C – a tall challenge for engineers, especially considering one
of the hotel’s records is its 183m high atrium; the tallest atrium in the world. As the indoor and outdoor temperatures create a force on the structure, the resulting impact on a traditional door would be the equivalent of trying to move a 21kg weight with each open and close. The solution? A revolving door, that is measured to prevent the inside ever being fully exposed to the outside. And the secret behind those dancing fountains? A technique called laminar flow, which eliminates turbulence in the water flow, using a similar method to that which allows fire hoses to tackle blazes on high floors. It’s such touches that not only made the Burj’s construction a case of “mission impossible” but today adds to its mystique. The Guinness World Records help too, whether they were broken by the hotel itself or just in proximity to its premises. So diverse are they it wouldn’t be surprising if the hotel also holds the title for the most impressive and extensive integration of leopard print fabrics, which appear on everything from carpets to waste paper bins and furniture motifs.
COLLEAGUE CONSCIOUS As with everything in hospitality, the building is one piece of the puzzle but it’s the people who make the experience. Not only does Burj Al Arab win awards for its luxury, but its staff are equally popular on the industry circuit. Receptionist Lance Oliver Keith scooped AICR’s Receptionist of The Year only a few months ago, the third Burj Al Arab receptionist to win the UAE competition, with one of those winners even succeeding in the international competition. Of the human touch that defines the Burj Al Arab experience, Hilal says: “To teach somebody to make a coffee or change a bed is one thing, but the character and care, and their ability to adapt are very important. It’s also very important to plan very well ahead because that will help us to ensure the challenging
62
hospitalitybusinessme.com
OPERATIONS
Hotel manager Ammar HIlal.
THE BURJ MANTLE Highlights from some of Burj Al Arab’s 100 awards t C ondé Nast Traveller Reader’s Choice Awards 2014 - Best Hotels in the Middle East & North Africa (Burj Al Arab ranked 1 st ; Jumeirah Emirates Towers in 7 th place and Jumeirah Beach Hotel 8 th ) t H otels 2014 Social Hotel Award - Best Digital Video Campaign Burj Al Arab Red Bull Racing F1 Stunt on Burj Al Arab Helipad t S kift 2014 - Best Social Media Presence by an Individual Hotel, Property or Resort, Burj Al Arab t T ravel and Leisure World’s Best Hotels 2014 - Burj Al Arab No. 4 Top City Hotel in Africa and Middle East t M iddle East Hotel Awards 2014 - Best Hotel in the Middle East Burj Al Arab t W orld Travel Awards 2013 - World’s Leading Hotel Burj Al Arab t D aily Telegraph’s Ultratravel Readers 2014 - Best Hotel in the World
elements of what we do are well executed and that the guest service delivery is exactly there where it should be.” In the 1,600 strong colleagues team serving the hotel, Hilal counts 80 nationalities and at full occupancy the staff to guest ratio is the highest in the industry, currently. 7KH JXHVW SUR¿OH KDV FKDQJHG VLJQL¿FDQWO\ RYHU WKH ODVW \HDUV 7KH hotel was originally conceived as a playground for GCC elites, but has seen a VLJQL¿FDQW LQÀX[ RYHU UHFHQW \HDUV LQ WKH number of guests it welcomes from Europe, China, South America and South Africa. As a result, colleague recruitment is also focused on these feeder markets. “I put a very big focus on recruitment. I myself go on recruitment trips in particular to our key feeder markets because I want to show them how important it is for us to select the right colleagues. The people we select need
hospitalitybusinessme.com
to show genuine care,” he continues, recalling how he himself first worked in F&B at the hotel for almost three years before returning years later as hotel manager. But the greatest highlight of running “the world’s best hotel”? “We have challenges like any other hotel, but the key to success here is that when we react we are timely, generous and thoughtful to ensure we stand for luxury and kindness, and also that we deliver what is expected of us. There are many systems and processes behind the scene that make this hotel happen on a day to day basis, and when you see the outcome is so fruitful and really appreciated by our guests, it’s the best reward you can have.” And for the future? Just announced is the creation of the hotel’s own beach as an extension to the man-made island. Watch this space for me!
t D aily Telegraph’s Ultratravel Readers 2014 - Best Hotel in the Middle East t W orld Luxury Hotel Awards 2013 Luxury Hotel – Global Winner t S pa Finder Readers’ Choice Awards 2013 - Favorite Spa in The United Arab Emirates, Burj Al Arab t U ltratravel Awards 2013 - Best Hotel in the World t U ltratravel Awards 2013 - Best Hotel in the Middle East t R eaders’ Choice DestinAsian Award 2013 - Best Hotel in Dubai t T rip Advisor Travellers’ Choice Award 2013 - Burj Al Arab t W orld Luxury Spa Awards - Best Luxury Resort Spa Global Winner t World Travel Awards 2012 - World’s Leading All Suite Hotel t World Travel Awards 2012 - World’s Leading Hotel
63
OPERATIONS
MEETING THE CHALLENGE IN SEPTEMBER, SEASONED GM HARALD BUERKLE RECALLED HIS EXPERIENCE OF OPENING TWO RADISSON HOTELS IN SOCHI FOR THE WINTER OLYMPICS. NOW ON A NEW ASSIGNMENT, BUERKLE SHARES HIS EXPERIENCE OF RUNNING RADISSON BLU HOTEL CAIRO HELIOPOLIS AS THE MARKET MOVES INTO A PHASE OF RECOVERY
R
ecent years have not been kind to Egypt’s tourism industry. In 2011, outbound tourism arrivals to the North African country dropped 33.2%, and continued to fall. In 2013 international arrivals took a further dive of 17.9%, hotel occupancy averaged 43.4% and ADR and RevPAR tumbled by 8.6% and 9% respectively. At the country’s pre-2010 peak, occupancy averaged 80%. It’s far from the most opportune time to take on the challenge of running a hotel; especially one that, upon speculation of imminent recovery in the country, has tight targets set for revenue and guest satisfaction. Reporting an already tangible recovery in Q2 2014 until today, Harald Buerkle comments: “We can see gradual improvements now travel bans are lifted, allowing key feeder markets to return to Egypt. Data must be proactively observed and interpreted with caution for new ways to exploit the commercial environment to grow our market share. “In addition, a focus on daily internal guest service trainings will support me to increase our guest satisfaction scores.” Located in a traditional leisure market, the 427 room hotel is now turning its attention to Cairo’s business visitors and local community, due to the city’s increased stability and the hotel’s reputation for being one of its most secure. The business segment isn’t the largest revenue generator, with Colliers
64
MAJOR HOTEL OPERATOR PRESENCE IN EGYPT 2014 Hilton Starwood Iberhotel Accor Hotels Marriott IHG Movenpick Carlson Rezidor Rotana Fairmont Raffles Hyatt
growth of 5% and other indicators point to sustained recovery. But what is the story on the ground? “In 2014, Egypt was experiencing a challenging first quarter due to the instability of the domestic economy, in turn due to the past political situation in Egypt. However, during Q2 and throughout the rest of the year we can see gradual improvements. The increase in corporate demand in Cairo is due to an improved stability,” Buerkle says, highlighting the importance of uninhibited travel for the country’s recovery.
Four Seasons
DRIVING BUSINESS
Kempinski The Address Best Western
-
2,000
4,000
6,000
8,000 10,000
Current Supply (No. of Keys) Future Supply (No. of Keys) Source : Colliers International
International reporting a 69.7% to 30.3% split between the two market sectors in 2013. However, it will gain significance as the country continues its recovery; the outlook for which is far from weak. Capital investment data mirrored the same downward spiral as other performance indicators with a drop of 10.5% in 2011 and a mere 1% rate of growth the following year. Yet, as international operators maintain their plans for new properties, the WTTC outlook to 2018 forecasts per annum
In context the task at hand is a challenge, but it is far from his greatest to date. Buerkle was previously based in Russia where he was the general manger during the pre-opening phases of the Radisson Rosa Khutor and the Park Inn by Radisson Rosa Khutor. He opened the Park Inn by Radisson to host the Alpine Ski World Cup and the Radisson Rosa Khutor to host the pre-Olympic test events and the winter Olympics 2014, while simultaneously studying for an online MBA in hospitality management. “I personally believe that every destination I have worked and lived in had its own challenges and opportunities to deliver results, delight guest and drive the business,” he begins. It was during his time in Sochi – when managing two hotels from pre-opening to welcoming the eyes of the world and
hospitalitybusinessme.com
hospitalitybusinessme.com
65
OPERATIONS
its greatest winter sporting talents – that Buerkle says he learnt key skills to transfer to this appointment; from utilities cuts to finding 200 skilled, English speaking, native staff. “In Russia, supply is very fragile and getting operating equipment in time is a big challenge. Everything has to be documented with special papers and stamped and signed five times. We had so much snow that winter the entire resort looked completely ready, but when the snow melted we were back to reality – there was a still a lot of construction needed for the Olympics,” he recalls. Whereas in Sochi visitors were, to an extent, secured due to the Winter Olympics, figures in Egypt are still subject to fluctuations and, in light of the fragility of regional political situations, many key source markets are still deterred from travel. Not that such issues shake Buerkle’s confidence. “It is important to bear in mind that fluctuations in spending and visitor numbers offer opportunities that will be explored to identify opportunities in the market. With a strong team effort and proactive leadership approach, combined with Rezidor’s ‘Yes I can’ service philosophy, my team can guarantee maximum results.”
ON THE RISE Statements last month from the country’s tourism minister, also signalled hope for Africa’s third most popular tourist destination, despite tourism revenues dropping from $12.5bn at the pre-2010 peak to $5.9bn in 2013, with H1 2014 down a further 25% YoY. Tourism minister Hishaam Zaazou, told Reuters that he predicts recovery will be evident in Q1 2015 – around six months behind previous predictions from international hospitality leaders, but based on the relative success of recent times of neighbouring countries like Tunisia, where the Arab Spring began.
66
The hotel bar and a Business Class grade room.
I PERSONALLY BELIEVE THAT EVERY DESTINATION I HAVE WORKED AND LIVED IN HAD ITS OWN CHALLENGES AND OPPORTUNITIES TO DELIVER RESULTS
Of the future, Beurkle is realistic but also optimistic. He concludes: “I was first attracted by the personal and professional opportunities available to me by moving into a new region which I have not been working in before. The cultural diversity compared with my former placements and history of Egypt adds valuable experiences to me, in addition, working within different cultures offers professional benefits to develop my personal leadership skills”
hospitalitybusinessme.com
TREND TALK
TECHNOLOGY SUPPORTING MIDDLE EAST HOTEL SECTOR TODAY’S TRAVELERS EXPECT MOBILE SERVICES WHEREVER THEY ARE
W
ith more than 600 hotels under development, demand is showing no signs of slowing in the hotel sector across the Middle East and Africa. This year, more than 139 hotels have opened across the region and another 82 hotels, with 18,538 rooms, are expected to open by the end of December. In Dubai alone, the Department of Tourism and Commerce Marketing expects at least 139 establishments, including 91 hotels and 48 hotel apartments, to come to the market through 2016. This booming hotel and leisure sector is having a knock-on effect across a whole host of industry sectors, including the technology that supports it from a booking and transaction perspective. By adopting the right technologies, hotels can ensure they are maximising revenue opportunities, enhancing visibility, improving profit margins as well promoting rates at the right level to global travel buyers. Another trend impacting on the hotel sector is the fact that mobile technology has become mainstream. Today’s travelers expect mobile services wherever they are and for whatever they are searching. Also hotel guests are increasingly more mobile and expect the hotels to provide mobile services. In 2012, 85% of leisure travelers used their smartphones during vacations and 38% explicitly access travel information via their mobile devices. Travel consumers want mobility, flexibility and easy real time access to information and to shop and pay safely and easily on the go. They expect seamless connectivity allowing them
hospitalitybusinessme.com
ASSITA KONE HOSPITALITY BUSINESS DEVELOPMENT MANAGER AT TRAVELPORT, AFRICA, MIDDLE EAST AND SOUTH ASIA
to access the content they want when they want it across all platforms, and also increasingly expecting seamless transitions between different platforms. Our Travel Commerce Platform enables travel providers, travel agencies, corporations and developers to connect. As travel industry demands evolve, we’re utilizing our platform to redefine the distribution and merchandising of airline core and ancillary products, as well as extending our reach into the growing world of travel commerce beyond air, including hotel, car rental, rail, cruise and tour operators. Earlier this year we acquired Hotelzon, forming part of Travelport’s ongoing strategy to redefine travel commerce, with a particular focus on growing in both the hotel and corporate travel space. Additionally, Travelport helps hotels make their properties stand out in the crowded digital marketplace with detailed content descriptions thanks to Travelport
hotel content plus which provides more striking descriptions of your properties and what guests can expect. It offers structured fields for details of property amenities, policy information and images, supports multiple languages and meets OTA standards. As a result, your hotels are presented to online and offline travel agents in a rich way that allows you to effectively articulate your accommodations and amenities. We’re also supporting the development of the sector through providing agents and travelers a better impression of the hotels have on offer with the addition of videos and images with Travelport’s Hotel Images Application. Our hotel image bank (of which there are 850,000+ images) provides one-click access to hotel images, 360-degree tours and videos, which are integrated with the agency hotel shopping process. Hotel suppliers who are working with VFM Leonardo and using their digital asset management solutions will have their images and rich media distributed to the Travelport GDS. The global economic and technological landscape is changing quickly and hotels have to constantly adapt to these changes to remain successful in the market. The cost of doing business, regulations and taxes, competitive accommodation products and customer retention are just a few of the issues that the hotel sector will continue to face in the Middle East region, and around the world, and technology looks set to underpin its success. For more information, please visit: www.travelport.com
67
TREND TALK
I.T. SECURITY AND THE GUEST-FACING APP USING IPADS AS A GUEST-FACING MARKETING AND SERVICE TOOL? BEWARE OF HACKERS
T
here is little doubt that a guest’s access to hotel information, services, in room dining and even control of their in-room environment, such as the lights, AC controls or the TV, will become a de facto standard in the industry. By 2020, 95% of guests believe hotels will increasingly look to new technologies to drastically increase efficiency, reduce costs, and improve service. However a recent incident in a hotel in China has sparked concerns about the implementation of such applications from an IT security perspective, when a hacker was able to control lights, curtains and AC in other rooms from his computer by intercepting the traffic from the tablet to the room control server and being able to read, modify and repeat the commands to his liking.
PREVENTION VS CURE While the incident no doubt caused embarrassment at the hotel, repeats are far from unavoidable. As a starting point, IT Managers should consider the two common deployment scenarios of such applications: a tablet in the room, owned and managed by the hotel, or a downloadable application accessible on the guest’s own devices. Both show merit; for instance engagement on room-paired devices is typically higher. The problems IT managers face in both scenarios are the connection of the applications to the hotel’s internal systems, such as the property management system, point of sale or room control devices. Initially, it’s critical to consider how the device connects to its backend server where content and
68
FLORIAN KRIECHBAUMER PRODUCT DEVELOPMENT DIRECTOR, IRIS SOFTWARE SYSTEMS
other functionality of the application is managed and processed, and whether this server sits in the cloud or on property. Secondly, how does the communication to other systems in the hotel work and how can it be secured? For a tablet that is paired to the room, best practice includes using a dedicated, hidden, and password-protected SSID to connect to the network via WiFi, contained to a trusted VLAN zone and separate from the guest network. This will ensure traffic, and hence an intruder, cannot intercept data and commands. Secondly, IT Managers should ensure that their application vendors encrypt any traffic from the tablet to the back end server using SSI, which, should an intrusion occur, will not allow anyone with malicious intent to understand the commands being sent and repeat them for other rooms, for instance. While these rules apply for both cloud and locally deployed back end servers for your hotel applications, IT Managers should keep in mind that typically cloud
based deployments come with a number of benefits in terms of maintenance and support. Nevertheless there are scenarios where local servers might be preferable, such as in geographic locations with poor Internet. It is also good practice for any connection from the application on the device to a third party system in your hotel to run via the aforementioned central back end server, rather than allowing each device to directly connect to your business critical systems independently. This will ensure that a connection to the PMS for example can be easily secured, as it will be limited to one single line of communication between the PMS interface machine and the server running the backend services, to which the application connects to in order to receive data. Such a connection can be protected via VPN, IP-based restrictions and by using vendors who inherently secure their interface APIs via appropriate authentication methods. In summary, it is critical to ensure the chosen provider can supply appropriate data flow documentation for all scenarios. In addition, they should be able to illustrate their approach to security of the communication between tablet, application server and third party systems. Given the issues that have surfaced, this due diligence is essential when considering a vendor. A detailed RFI process involving all appropriate stakeholders of the property is essential and can ease the process of acquiring the information from vendors and subsequently drawing comparisons between shortlisted application providers.
hospitalitybusinessme.com
BurgessForum_HBME_207x270_FINAL.indd 1
17/09/2014 16:01