Back to Basics
By Ehtesham Shahid • Aug 3rd, 2009Where has the focus been in the region outside of the UAE?
We are all over the Middle East and are now moving into the Saudi market and North Africa. The Saudi market has got tremendous potential; we had many, many opportunities before, but we did not want to go with one property or two or three. We want to go to Saudi Arabia and within a period of time to cover the whole kingdom, which is a massive country. Saudi Arabia is two million square kilometers in size. The travel time between Jeddah and Riyadh is around one and a half hours by plane, so to go and open a 250 to 300-room hotel wasn’t going to be viable [as people won't stay overnight].
But there is also a categorization of hotels happening, and lots of movement in the budget sector of the market. How are you placed to tackle that?
Rotana started talking about budget hotels in the middle of the expansion period. Three years ago, when we talked about budget hotels, everybody thought we were crazy. Budget hotels are needed at all times, and particularly in difficult times. A budget hotel doesn’t mean it is cheap - it means better value for money, that it caters to essential needs.
You’re not going to book into a hotel that has got a 40 to 45 square-meter room when you’re only going to spend seven or eight hours sleeping. If you come to an exhibition, many people would look for accommodation where there’s just a comfortable bed, it’s clean, safe and trendy, and that’s it. But this doesn’t mean that people won’t go to five-star hotels anymore.
In every market there’s got to be enough diversification of the product to satisfy everyone; there’s the chairman of a company who wants to pay $3,000 a room, and also the guy who fixes the stands and wants to pay $100.
It’s being said that places like Dubai will have to cut down on hotel rates to stay in business, because people will tend to go to Oman and other neighboring cities, and also to Southeast Asia.
Dubai is not more expensive than any other city in the region, but it has got superior hotels. The Burj Al Arab is, of course, very expensive, but where is there another Burj Al Arab in the Middle East, or a Madinat Jumeirah?
