MARC DARDENNE, CEO of Emaar Hospitality Group and Armani Hotels & Resorts, speaks to SHALU CHANDRAN on what it takes to create a successful luxury business model amidst a global economic recession.

To begin with, has the region’s hospitality sector started to pick up?
Yes, I think definitely business sentiments have improved. At The Address Hotels & Resorts (also part of the Emaar group), we opened hotels during the downturn. So we were really ramping up our hotels. When we compare numbers from this year to last we are significantly ahead. We always felt business was improving. We have also been really happy with our occupancies in the first quarter 2010.

We are fortunate to have most of our hotels in a very desirable location and we have the ability to attract both leisure and business which is a huge advantage. We have out-performed occupancies this year because of this factor. On the leisure side we have been able to attract the GCC business and key markets were Saudi Arabia, Qatar, Kuwait and weekend visitors from Abu Dhabi.

The international market is not so much our source business because they prefer beach properties. Our market is primarily corporate, Mice and leisure – for GCC and stop-over. We have also announced, in co-orporation with Emirates airline, a promotion for first-class transit passengers at the Armani Hotel and for business-class passengers at The Address Downtown or at The Palace. In terms of our GCC leisure guests, they are looking for great shopping, great hotels and leisure activities for kids – which we can offer with Dubai Mall and Kidzania and the fountain.
What are your predictions for the summer months?
June is going to be a relatively good month and July, which is historically the month when the GCC market travels, we will benefit the most. I think, like every year, Ramadan is going to be fairly quiet from a rooms point of view. By Eid, it will pick up and I think quarter four will be better than quarter one.
With the opening of the Armani, what feedback have you received?
The Armani Hotel has received such positive feedback. Giorgio Armani himself was extremely pleased with the outcome – not only from the design point of view but also with the quality of the finishing. What he really enjoyed was the service and the ambassadors to the brand, which made a huge difference. The food and beverage has been very strong since opening. The rooms have been popular with residents and have been popular during the weekends with people wanting to try them out.

Armani lobby

The GCC and the international market, following our international media campaigns, have been showing interest and with the Armani, guests will come to Dubai just to experience the hotel and the brand.
Do you believe that the region still has a demand for ultra-luxury properties like the Armani?
When you have the ability to deliver a very specific experience, like the Armani experience, where you don’t compete on price, yes. I am not saying it’s the best in the world but it is a unique, specific experience. Our guests are not staying at the Armani to spend a night at a new hotel but to experience the Armani service.
What is the Armani service?
It begins with our brand ambassadors. Much deliberation has been put in choosing associates who have that unique talent for service. Almost all associates came onboard in early 2010 so we’ve spent a lot of time on training. Besides skills training, we spent a lot of time training them on how to be an ambassador to the brand – what Armani Hotels & Resorts is all about, because at the end of the day, what makes a great hotel are its people.

The second part is the lifestyle management concept. It is really a group of highly talented lifestyle managers who get in touch with the customer from when the booking is made, arranging their schedules till they leave the hotel. It engages the guests to stay in touch with us and also recommend the hotel.

Has luxury taken on a new definition with the Armani on your portfolio?
Armani has taken luxury to the next level. Ultra-luxury is a unique experience. When you can duplicate it, its not ultra-luxury anymore. From its service to attention to detail, Armani should have, and hopefully will, set new standards.

What are your plans ahead with this association?
Our goal is to develop multiple ultra-luxury hotels and resorts worldwide and the next hotel to open is in Milan, which will be in April 2011. We are planning and designing Marrakech and also looking at destinations like New York, Shanghai, Tokyo, London and Paris.

How do you think The Address Hotels & Resorts brand is perceived globally?
What we have strived to achieve is to get a regional recognition. Globally, we are better known now in Europe with the announcement of our properties in France and Morocco. Both The Address Jnan Amar Marrakech and The Address Domain de Lavagnac will open in the first quarter of 2012.

We are about to sign a new property in Europe and this will increase the brand awareness as we go ahead. We are currently negotiating properties in Budapest, Istanbul, Shanghai and Sanya and more properties in the Middle East. All these properties, when confirmed, will be management contracts, since it’s quicker for us to expand our portfolio and also because there is a demand for The Address brand.

With 170 hotels and a total of 38,079 rooms across Europe, Radisson recently took the crown as Europe’s largest upscale hotel brand. Today, Rezidor has 25 hotels operating in the Middle East under the Radisson Blu and Park Inn brands and 15 new properties under development.

Carlson, a privately-held, global hospitality and travel company, and publicly-held Rezidor Hotel Group announced a new agreement with Formosa International Hotels Corporation (FIHC) under which FIHC will acquire the Regent luxury hotel business.

The Regent brand is owned by Carlson and its subsidiaries, which globally operates and licenses the Regent brand. In 2003, Carlson expanded its relationship with Rezidor under a separate master franchise agreement to include the development rights for Regent in Europe, the Middle East and Africa.  Transitional agreements are in place whereby Carlson will continue to provide reservations and other services to the existing Regent network and Rezidor will continue to provide management services for Regent Hotels in EMEA.

“For Regent, this is an exciting partnership because there is definitely an easier tomorrow than before. Formosa is committed to the growth of Regent internationally,” said Ritter.

At Rezidor, the core business continues to be the development and growth of The Radisson Blu and Park Inn brands. “Both the Regent and Missoni will never become our core brands but they compliment our other brands very well. Our brand-scape is well spread with a conservative luxury brand (The Regent), a lifestyle brand (The Missoni), The Radisson Blu (four-star) and the Park Inn (mid-scale) and hopefully one day we will add a two-star brand to this pyramid,” he added.

While Radisson Blu and Park Inn continue to be the company’s core brands, Ritter is confident that the opening of the Missoni Kuwait will usher in a new demand for lifestyle hotels. “The Missoni brand has received a lot of interest because it is unique and very timely and will attract a creative clientele. We are creating a demand for a product like the Missoni and are quite confident it will be a success in the region. The second Missoni will open in Sifah, Oman in 2012,” he said.

The company, which celebrates its 50th anniversary this year, was not severely affected by the economic crisis though 2008 was a chaotic year for Rezidor when the first and second quarters saw a revpar growth of 2.8 per cent, followed by a flat third quarter and revpar dropping to -5 per cent in quarter four.

“That was when we pulled the alarm bell and decided we needed to start our savings programme, a project called Hedging for Turbulence,” said Ritter. “We were on a mission to save roughly €30 million on annual costs and eventually achieved a reduction of €36 million.

“This was a major feat for the company and a cost structure that is now here to stay. In the process, we have had to let people go, people had to work harder, be more flexible and work smarter. It has certainly been a learning curve for the entire Rezidor family.”

The following year witnessed a slight drop in revpar, which flattened out in October/November 2009 and since January/February 2010 there has been some improvement in occupancies.

“This is typical of a downturn, where we will see occupancies improving before rates raise. We have also continued to maintain our growth pattern and will continue our aggressive growth into 2010 and 2011,” he said. “We have a pipeline of more than 100 hotels as well as gathering more conversions as we go ahead. The Middle East currently has 15 new hotels under development, which is more than 4,225 rooms.”

At present Rezidor has a signed pipeline of more than 23,000 rooms, of which 90 per cent are fee-based. Ritter added: “Management contracts will continue to be our focus for the next couple of years with limited or no financial exposure. We decided to stop any lease contracts because it can get very costly and can be risky.

“This might mean slower growth in numbers but we don’t want to jeopardise the company with too many commitments.” Coming out of a downturn, he believes this probably is the best decision the company has made.

“This latest order, adding to 58 A380s previously ordered, affirms Emirates’ strategy to become a world-leading carrier and to further establish Dubai as a central gateway to worldwide air travel,” said Sheikh Ahmed Bin Saeed Al-Maktoum, chairman and chief executive, Emirates Airline and Group.

“Emirates supported the development of the A380 from the earliest days, a project employing tens of thousands of Europe’s best people, and today’s increased order is the best endorsement I can imagine. On behalf of all of us at Airbus, we thank Emirates for its support. The A380 is indeed a remarkable eco-efficient aircraft, a profit generator for airlines and a great flying experience for passengers,” said Tom Enders, president and CEO of Airbus.

In addition to the newly placed orders, the airline has 48 Airbus 380s, 70 Airbus 350s, 18 Boeing 777-300s and seven Boeing air freighters on order totalling 143 wide-body aircraft worth more than $48 billion. In a year when the aviation industry was rocked by the economic downturn, Emirates Airline recently reported its 22nd  year of profit, up 416 per cent to close at $964 million over its 2008-09 profits.

Emirates is now serving eight international destinations with the super-jumbo aircraft comprising London Heathrow, Toronto, Paris, Jeddah, Bangkok, Seoul, Sydney and Auckland. The airline will start A380 services to Beijing from August 1, Manchester from September 1 and will return service to New York’s John F Kennedy (JFK) airport on October 1 and the airline anticipates expanding the list of destinations at more than 100 airports around the world as further A380s become ready.

• Emirates has also recently become the first airline in the Middle East to introduce a service allowing passengers to purchase a UAE visa online.

The news came as shock to many travel and tourism stakeholders as he was one of the industry’s most highly-regarded individuals frequently spotted at events such as ITB in Berlin and World Travel Market in London, as well as Skål events worldwide.

TTN publisher Kim Thomson, who spoke with Power at Imex in Germany, said: “I am in complete shock. I worked closely with Jim in the setting up of Skål UAE and I can hardly believe he has gone so suddenly, he will be greatly missed.”

Power was in Sydney on June 9 for the  golden anniversary luncheon of Skål International.

He apparently became ill on his return and called in sick to work. When colleagues checked on him they found him dead.

Born in June 1949, Power was unmarried and had no children.

The company will be the world’s first airline to trial a new technology called Avoid (Airborne Volcanic Object Identifier and Detector). The system, essentially a weather radar for ash, was created by Dr Fred Prata of the Norwegian Institute for Air Research (NILU) and involves placing infrared technology onto an aircraft to supply images to both the pilots and an airline’s flight control centre.

These images will enable pilots to see an ash cloud up to 100 km ahead of the aircraft and at altitudes between 5,000ft and 50,000ft. This will allow pilots to make adjustments to the plane’s flight path to avoid any ash cloud. The concept is very similar to weather radars which are standard on commercial airliners today.

On the ground, information from aircraft with Avoid technology would be used to build an accurate image of the volcanic ash cloud using real-time data. This would open up large areas of airspace that would otherwise be closed during a volcanic eruption, which would benefit passengers by minimising disruption.

EasyJet chief executive Andy Harrison, said: “This pioneering technology is the silver bullet that will make large-scale ash disruption history. The ash detector will enable our aircraft to see and avoid the ash cloud, just like airborne weather radars and weather maps make thunderstorms visible.”

The first test flight is to be carried out by Airbus on behalf of easyJet within two months, using an Airbus 340 test aircraft. Subject to the results of these tests, easyJet intends to trial the technology on its own aircraft with a view to installing it on enough aircraft to minimise future disruption from ash.