IHG leads the Saudi Arabian market

The InterContinental Hotel Group (IHG) has a portfolio of 4,697 hotels worldwide (as of December 2013). It opened 35,467 new rooms globally in 2013 and about 65,461 new rooms were also signed into the pipeline last year. In November 2013, the group recognised its top 10 priority markets – the Middle East stood in second after the US.

“We have 81 hotels in operation in the Middle East at the moment and 25 in the pipeline, scheduled to open in the next five years,” Pascal Gauvin, chief operating officer, India, Middle East and Africa, tells TTN.

“In Saudi Arabia, we intend to open a Crowne Plaza in Riyadh in the Information Technology Communications Complex (ITTC), scheduled to open at the end of this year. In Makkah, we’re building, the largest Holiday Inn in the world at 1,238 rooms, scheduled to open 18 months from now. About a year later, we’re opening a new InterContinental in Riyadh and we’re also bringing our Indigo brand, for the first time in the Middle East and it will open in Riyadh in 2016.”

“Saudi is a very important market for us and we’re the biggest international operator in the country.”

“In Dubai, we are opening the InterContinental Dubai Marina, our second property in Dubai, which will open in fourth quarter this year. We also have a Crowne Plaza in Dubai Marina, which is under construction as well, to open by 2016. In the rest of the UAE, Fujairah will have an InterContinental by 2016, while Ras Al Khaimah will have one InterContinental and one Crowne Plaza.

“We already have one Crowne Plaza, one InterContinental and one Holiday Inn Express in Bahrain, and there is one Holiday Inn in the pipeline as well.”

“We have a Crowne Plaza at the Oman Convention and Exhibition Centre, and a new InterContinental in Muscat Hills, under construction as we speak.

“In Kuwait, we are building an InterContinental, scheduled to open next year.

MIDEAST’S FIRST INDIGO

“Indigo is a great brand, it really complements our other offerings in Saudi Arabia. Besides, the location of the Indigo brand is a young neighbourhood, we expect younger travellers visiting us there. Indigo brings something different to Saudi. It is a boutique lifestyle brand, very locally relevant and trendy. We will soon expand the brand in the rest of the Middle East.”

HOTELS IN MAKKAH

In terms of architecture, hotels in Makkah are very much like any hotel in the world, explains the COO. “Some considerations that InterContinental Makkah observes are that it has prayer rooms, the dining area is huge to accommodate families – when thousands of people come down to have breakfast at the same time, there needs to be enough room to comfortably accommodate everyone.

The lifts, for instance, there need to be the right number and size. Since we know that people often arrive in big groups in Makkah for religious tourism, we have a large area dedicated to buses, a special speed check-in area for guests – there’s a lot of thinking involved to ensure the end-product is effective. The food and beverage offering during Ramadan has to be in line with religious expectations. It is an excellent location – waking distance to the mosque. 

“At InterContinental Makkah, we receive royalty and we have to follow protocol. Sometimes, this religious trip happens just once in their lifetime, so we have to give them an experience to remember and cherish, make their stay as special as we possibly can.”

CUSTOMER PROFILE

IHG has three types of customers in the Middle East, explains Gauvin. “We have the regional customer, this stands for 45 per cent of our market segment, the international traveller from the US, Europe and Asia, and we cater to the local traveller as well – there is a lot of inter-city travel in Saudi for business and leisure.

“Jeddah, being on the Red Sea, is a popular holiday break for local travellers. Al Khobar as well, being so near Bahrain, is a busy place. In the summertime, people head toward Ta’if, which is located at an elevation and is therefore, considerably cooler than the plains.

“Another trend, which is obvious, is that locals travel in large families – this makes Saudi a great domestic market .”

Despite the importance of the Saudi market, it is the revenue per available room (RevPar) in Dubai that the COO chooses to quote. “Our RevPar in Dubai has grown 3.9 per cent this quarter over last quarter, and this is despite the fact that last year showed such strong performance for us. Last year, so many hotel rooms opened and the markets just absorbed them – we didn’t even feel the pinch.”

“We were the first international hospitality company to choose Dubai, and it is really quite amazing to see how the city has grown.”

Link: IHG hotels due to open over the next three years

By Rashi Sen