Carlson Rezidor Middle East
Widens its footprint as new opportunities beckon
Carlson Rezidor Middle East
Carlson Rezidor Middle East widens its footprint as new opportunities beckon The globally recognised hotel operator is looking to capitalise on a rejuvenated market through dynamic geographical expansion, bolstered by the introduction of two new brands Written by: Joel Levy Produced by: Kiron Chavda
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Carlson Rezidor Middle East Widens its footprint as new opportunities beckon
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arlson Rezidor continues its large-scale expansion in the Middle East over the next few years to complement the launch of two new global hotel brands. The crux of the expansion revolves around the company’s focus on two key countries. Firstly the regional powerhouse Saudi Arabia offers previously untapped opportunities, centred on its primary cities; Riyadh, Jeddah, the holy cities Mecca and Medina and the Eastern Province. Director of Business Development, Elie Milky explained: “The Kingdom of Saudi Arabia is a very wealthy and self-
sustained economy with very strong domestic tourism. It holds vast oil resources and has huge potential for hotel and real estate development. There just isn’t enough hotel supply in the market. “We have recently signed new hotels and serviced apartments in some of these cities. Our expansion in Saudi Arabia is driven by both our Radisson Blu and Park Inn by Radisson brands, offering hotels, resorts and serviced apartments under our management in the primary and secondary markets throughout the kingdom.” The United Arab Emirates (UAE) is the second country pinpointed for expansion, particularly the regional
Radisson Blu Hotel Abu Dhabi Yas Island
Radisson Royal Hotel Dubai
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Radisson Blu Hotel Dubai Media City
We have 30 hotels in the region including Egypt and Libya, and almost 20 under development” — Elie Milky, Director of Business Development hub of Dubai and the oil-rich Emirate of Abu Dhabi where demand has returned to pre-recession levels. Dubai’s successful bid to host Expo 2020 will further deliver the rulers’ vision of attracting 20 million tourists by then, doubling the current numbers and stimulating further investor appetite across the board. The company is also strengthening its presence in Oman with two hotels opening there this year, while also seeking to expand in Jordan and Egypt, and intending to make inroads into Erbil, the capital of the Kurdistan region of northern Iraq. “As the market picks up, demand is almost back to what it was in 2008 and growing further,” Milky continued. “Investment activity
Elie Milky has returned and I think this will continue to peak for the next three years with increasing demand for hotels, particularly in the midscale segment and particularly in places like Dubai and Doha, where we plan to add the mid-market Radisson Red to the already expanding, real estate efficient Park Inn by Radisson brand. “The market is also beginning to see more and more signings that include serviced apartments due to the increasing demand for this hotel asset class and on account of its lucrative investment model.” Increased presence Coinciding with the geographical 5
Carlson Rezidor Middle East Supplier Profile
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expansion of Carlson Rezidor Middle East has seen the introduction of two new brands as the company looks to enhance the range of offers to the market. Radisson Red, described as a “lifestyle select” brand, will create a uniquely engaging and meaningful guest experience that leverages futuristic technologies of tomorrow and uses intelligent and pervasive customer data to anticipate and serve individual needs and preferences. The five-star Quorvus Collection, an expertly curated collection of luxury hotels, will reflect and respond to the true sensibilities of Radisson Royal Hotel Dubai
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Carlson Rezidor Middle East Widens its footprint as new opportunities beckon
Park Inn by Radisson Abu Dhabi Yas Island the contemporary global traveller while celebrating the culture of each and every location. Alongside the already established and respected Radisson Blu and midscale Park Inn by Radisson brands, these new additions will give the company’s global customer base even more choice in more locations in the Middle East and parts of Africa, where Carlson Rezidor has enjoyed much success in recent years. Milky, said: “We have 30 hotels in the region including Egypt and Libya, and almost 20 under development. We expect to open three to five hotels this 8
Investment activity has returned and I think this will continue to peak for the next three years with increasing demand for hotels, particularly in the midscale segment” — Elie Milky
year and hope to double our presence in the region by 2020.” Regional history Following the bolstering of Rezidor’s strategic partnership with Carlson in 2012, Carlson Rezidor became one of the world’s largest and most dynamic hotel groups, operating or developing more than 1,300 hotels in 100 countries and territories, and the Middle East is a current focus area. A bold move in the spirit of entrepreneurship that Rezidor is known for saw it enter this region early, stealing a march on many competitors and taking risks that
most shied away from, opening hotels in locations others avoided having not recognised their potential. This entrepreneurial spirit remains today. Patience paid dividends, and these risks have been vindicated and rewarded with much of the region transformed from an emerging market to an established and affluent economic centre, despite pockets of instability in places like Libya, Egypt, Syria, Bahrain and parts of Iraq. “It may have been a slow start at the beginning, but it was a symbolic one in 1980 which gradually turned into something big,” said Milky. The region has subsequently gained a special place in the heart of the company, with the Radisson Blu in Kuwait the first location in which a hotel was opened outside of its native Scandinavia. This particular hotel continues to set high standards, having recently reopened after a $52 million, two-year renovation, and is quickly re-establishing itself as a local and regional flagship. Despite the current success, establishing a footprint in the Middle East was initially a steady process. Rezidor took over five upscale hotels under Radisson Blu in Saudi Arabia, the UAE and Lebanon in 2002-2003, and gained a presence 9
Carlson Rezidor Middle East Supplier Profile
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in some major cities, including Riyadh, Jeddah, Yanbu, Sharjah and Beirut. But it was towards the end of the 2000s that the momentum really began to build, as Milky explained: “Things started picking up later in that decade, in 200708, when we benefitted from the economic boom, and, as Rezidor’s brands started gaining awareness, we opened most of our hotels, establishing ourselves as one of the fastest-growing companies in the region.” It is from this strong position that the company is now confident in driving its large-scale expansion. Pragmatic approaches An important factor in Carlson Park Inn by Radisson Riyadh - opening soon
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Carlson Rezidor Middle East Widens its footprint as new opportunities beckon
Radisson Blu Hotel Kuwait Rezidor’s Middle Eastern success is its personnel’s understanding of the diversity of the region, its familiarity with its various cultures, and the group’s adaptation to local hotel preferences. Overall, the group values its long standing relationships with its owners and partners by creating win-win relationships through a solutiondriven, pragmatic, approachable and responsive mindset. “The region is unique in its cultural characteristics,” explained Milky, himself a fluent Arabic speaker. “Some countries in the region such as Saudi Arabia, Libya and Kuwait forbid alcohol sale and consumption; while other markets 12
that don’t may find some owners and investors not too keen on serving alcohol in their hotels. “This is where we take a pragmatic approach and tailor our product offering to meet owners’ preferences by, for instance, offering serviced apartments, which are naturally operated ‘dry’ in the Gulf region of the Middle East. “And owners that develop licensed operations often contribute to a dynamic and diverse food and drink offering that turns the hotel into a social hub. Operating a hotel in the Middle East and parts of Africa carries with it an understanding of various cultural and religious sensitivities
Radisson Blu Hotel and Residence, Riyadh Diplomatic Quarter – opening soon Radisson Blu Hotel Kuwait
Serviced apartments are picking up dramatically in the Middle East and we are pursuing that strategy by operating such products under our established brands” — Elie Milky
you have to bear in mind. “Hotels in the region also have other unique real estate and operational characteristics. Hotel room sizes in many parts of the Middle East are generally larger than those in Africa and Europe because guests are used to more living space as well as the availability and relative affordability of land. “Some hotels also have more food and drink facilities and banquet space, offering several bars, restaurants and, in some cases, night clubs, with special focus on large weddings and events. In some markets such as Doha, revenues from food and drink account for more than 50 percent of the total revenue of the hotel.” Another element specific to the Middle East is the popularity of the aforementioned serviced apartments, an extended stay product offering studios and larger apartments as opposed to just bedrooms, but with full hotel facilities such as room service, front office, housekeeping, security, a gym, and some basic food and beverage facilities. This is an area where the company anticipates further growth and it is keen to capitalise on and meet growing demand, particularly as serviced apartments carry a lower operating risk with 13
Carlson Rezidor Middle East
Widens its footprint as new opportu
Radisson Royal Hotel Dubai higher occupancy and more attractive profit margins than those of a standard hotel. “This is picking up dramatically in the Middle East and we are pursuing that strategy by operating such products under our established brands; the upscale Radisson Blu and the midscale Park Inn by Radisson,” said Milky. “Most of our hotel signings over the past few years have included the serviced apartments component. Other brands have taken a different approach by creating serviced apartments brands. “On the other hand we have done something different; we are using our existing established brands 14
to operate serviced apartments and we have successfully done so in Bahrain and in Dubai, in addition to new additions in Oman, Saudi Arabia and the UAE.” Global company thriving locally The growth of the strategic partnership with Carlson had by 2012 given Rezidor a global footprint, and the combined company is now in the top ten largest hotel groups worldwide. Today, Radisson Blu is the largest brand in Europe, the group is the largest international hotel operator in Eastern Europe, and currently has the largest pipeline
unities beckon STATISTICS
in Africa and Eastern Europe. Milky said: “In a snapshot, this is a company with Scandinavian roots, a European culture and an American driving force that has driven its expansion worldwide and has made it a global company; and in every region, every standardised hotel product has a local flair.” As competitors gain momentum on the massive potential of a rapidly growing economic region, Carlson Rezidor will use its expertise and innovative spirit to maintain and grow the excellent market position it enjoys today. Milky added: “We are seeing more and more competition and a large number of hotels coming up here. We have in Dubai the regional offices of up to 15 international hotel operators located within a 15 kilometre radius. So the competition is immense and the average fee structure is more competitive than it is in other emerging markets such as Africa and Eastern Europe.” Carlson Rezidor intends to thrive amidst this competition and has clear and astute plans to stay at the top of the pile in the Middle East with the new offerings and geographical expansion. With these plans in place, Milky looks forward to Carlson Rezidor becoming increasingly established as a major regional player.
Industry: Hotel Founded: In 1980 the first hotel outside Scandinavia opened in Kuwait. Headquarters: Brussels Brands: Quorvus Collection, Radisson Blu, Radisson Red and Park Inn by Radisson Revenue: MEUR 919.5 (Year 2013) Employees: 35,000 Website:
www.carlsonrezidor.com
Visit us online:
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Carlson Rezidor Dubai Media City, Bldg 7, 3rd floor off # 331 Tel +971 4 390 0070 Fax +971 4 3908171 info@rezidor.com www.carlsonrezidor.com
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