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Supply spike on the cards as hotel chains plan expansion

The recently concluded Future Hospitality Summit (FHS) was attended by nearly 1,000 delegates and featured 185 top-flight speakers, with three days of high-level debate, networking and events, all centred around the theme Lead the Change.

We spoke to key hoteliers for their insights into the changing world of hospitality and regardless of trends, it was clear that ambitious, exponential growth is back on the horizon for the major hospitality players.

 

WYNDHAM HOTELS & RESORTS

Wyndham Hotels & Resorts, the world’s largest hotel franchising company with approximately 9,000 hotels in over 95 countries, announced its acquisition of the Vienna House brand for $44 million adding an upscale and midscale portfolio of approximately 40 hotels and more than 6,000 rooms.

We spoke to Dimitris Manikis, Wyndham Hotels & Resorts President for Europe, Middle East, Eurasia and Africa (EMEA), who sees the Vienna House brand opening up in the Middle East too at some point in the future. “Over the past 30 years, the Vienna House brand has built a highly recognised name for travellers in many European countries. The acquisition of the Vienna House brand and our expanded collaboration with our trusted partner, HR Group, mark a key step in expanding our market presence even further, adding immediate scale and capability and supporting our ambitions for growth in important destinations across EMEA.

ull quote: “For the last 15 years, the master licence for developing Ramada in Saudi Arabia was in the hands of a third party. Recently, we took the licence back - we are now masters of our destiny as far as Ramada is concerned”
– Dimitris Manikis

 

“The Middle East has always been a key market for us. We’ve got 11,000 rooms in operation here. We just launched our first Wyndham Residences on the Palm: extended stay branded residences have enormous potential in the region. We just opened up our Doha have property, a very nice, five-star Wyndham Grand hotel.

“For the last 15 years, the master licence for developing Ramada in Saudi Arabia was in the hands of a third party. Recently, about a month ago, we took that licence back. This is incredibly important for us because Ramada is our most popular brand in the Middle East. It’s a brand that has a lot of potential in Saudi Arabia and now, we are the masters of our own destiny as far as this brand is concerned.

“Our number one focus is to expand the Ramada brand in Saudi Arabia, while also introducing our midscale and economy brands,” Manikis tells us.

 

RADISSON HOTEL GROUP

Radisson Hotel Group currently operates 52 properties in the Middle East with more than 11,000 keys, catering to evolving and diverse customer needs. At this year’s Future Hospitality Summit held in the UAE, the group announced expansion plans as it sets to add over 5,000 keys to its expansive portfolio in the next five years. 

“Many locations in the Middle East are perceived to be oversupplied, I disagree with that comment simply because there are opportunities within certain segments and certain locations,” Elie Milky, Vice President Development for the Middle East, Pakistan, Cyprus and Greece, Radisson Hotel Group, said to us. “If you look at the Dubai market, for instance, Dubai may be oversaturated for some, but Dubai is definitely lacking supply in certain segments. About 95 per cent of resorts in Dubai are in the five-star category. There’s a huge opportunity and a huge gap for midscale and upscale resorts. Saudi Arabia doesn’t have any resorts – we are the only resort operator in Saudi with two resorts.

“There’s a shortage of branded serviced apartments, a very small percentage of serviced apartments in the region is branded and that’s where we have an opportunity.”

 

IHG HOTELS & RESORTS

Arabian Travel Market (ATM), the leading travel and tourism event for inbound and outbound tourism professionals throughout the Middle East, has signed an agreement with IHG Hotels & Resorts, to become its Official Hotel Partner for ATM 2023, which takes place at the Dubai World Trade Centre on May 1 to 4. 

We spoke to Haitham Mattar, IHG’s MD for IMEA, at Future Hospitality Summit for more insight into the group’s developments, including the prestigious ATM partnership.

“We are pleased to extend our long-term relationship with RX as their hotel partner for Arabian Travel Market 2023. We are especially keen on the show’s theme “Working towards Net Zero” as it is well aligned with IHG’s ‘Journey to Tomorrow’ – our ten-year responsible business agenda focused on our people, planet and communities.”

“It’s not just the beach resorts and the mountain resorts, people are seeking city breaks, they want to go out, walk the street and meet the locals and enjoy the food”
– Haitham Mattar

 

Mattar also shared some interesting trends while outlining the group’s growth plans across the region. “Our transit business is growing - it’s about 40 per cent of our business now and there’s also an increase in length in stay.

“There’s an increased length of stay in the overall leisure business as well, predominantly in the UAE. Domestic travel in India has come back and also international travel from the US has made its way back.

“In terms of the booking pace, people are not booking in advance as they used to, where if you got a request from the Germans, they would be booking a month in advance. Now it’s just one or two days in advance: this last-minute planning has become has absolutely become the norm.

“City breaks have returned to be quite popular. It’s not just the beach resorts and the mountain resorts, people are seeking city breaks, they want to go out, walk the street and meet the locals and enjoy the food.”

 

MARRIOTT INTERNATIONAL

From the Future Hospitality Summit in Dubai, Marriott International, announced plans to expand its Middle East footprint with the expected addition of over 20 properties and more than 5,000 rooms across the Gulf countries over the next 15 months. The company’s growth in the region is fuelled by ongoing demand for its extraordinary portfolio of hotel brands across Saudi Arabia, Qatar, and the United Arab Emirates, and increased appetite from developers for conversions and adaptive reuse properties.

While much of the company’s growth in the region is through new-build developments, the company continues to see an increase in conversion opportunities, highlighting the demand for its sought-after brands in the region. There is also increased interest in the adaptive reuse space where developers are looking to convert existing buildings into hotel accommodations. Over 30 percent of the company’s anticipated property additions in the region by the end of 2023 are expected to come from conversions and adaptive reuse projects.

Chadi Hauch, Regional Vice President – Development, Middle East, Marriott International, commented, “As a company, we have developed a conversion-friendly platform that enables existing properties to quickly and cost-effectively access our world-class sales, distribution, and loyalty platforms to meet owner and guest demands.”

 

CHALLENGES

Sandeep Walia, Chief Operating Officer – Middle East, Marriott International, tackled the question of understaffing in hotels in the region. He said: “I do believe that the problem of understaffing is very much a thing of the past for our region. I can speak with confidence at least for Marriott International hotels. We’ve got the teams we need. We’ve got the leaders we need. Now, it’s about just focusing on the culture, training and getting back people to say, we are here to create experiences – this cannot be compromised.”

IHG’s Mattar addressed the question of increasing room rates. “Look, we can’t be in denial that there’s inflation out there. Inflation has increased the cost of everything. It has increased the price of the produce with which we bring food on the table. A lot of the ingredients are imported, especially this part of the world. The logistics and shipping have been hit the highest it is they seen the highest rise in cost. So, shipping produce for our hotels, operating hotels with such inflation, of course, affects pricing.

“I think people were expecting this because we have not seen any significant drop as a result of inflation or an increase in prices,” Mattar tells us.  

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