Jan's smitten with MENA
In less than 18 months from now, InterContinental Hotels Group (IHG) will have expanded its Middle East and North Africa (MENA) portfolio by a further 11 hotels, according to CEO for Asia, Middle East and Africa Jan Smits. Over the next three years, this number of new properties in MENA continues to grow, reveals Smits, who gave Hotelier Middle East an update at the Arabian Hotel Investment Conference in Dubai. Smits was speaking upon the launch of the InterContinental Muscat Hills Resort in Oman. When it opens in 2015, the project will be IHG’s second hotel resort development to include an IHG-run golf club component, after it took over Al Badia Golf Club operations next door to InterContinental Dubai Festival City back in 2009. “It’s not a model we necessarily look for but it makes sense. You get a lot of synergy in running both [the hotel and the golf club], but we’re not experts in running golf courses,” explains Smits. In the shorter term, IHG is on track to launch two hotels in Oman by the end of 2013: the 188-key Holiday Inn Muscat Airport — pushed back from its scheduled 2012 opening — and the 213-room Crowne Plaza Duqum. IHG had previously launched the InterContinental Blue City Beach Resort, set to open in 2015, however, this forms part of the stalled Blue City real estate development. The firm currently operates only one InterContinental resort and three Crowne Plazas in Oman, a country that Smits explains has a “lot of potential” for the group. In Bahrain the outlook is also positive, according to Smits. In spite of recent unrest, the group is forging ahead with developments there, and he confirmed that the Holiday Inn Express Bahrain, in Manama, will open this year. The group also has two upcoming properties in Al Seef — Staybridge Suites Bahrain Al Seef and Holiday Inn Bahrain Al Seef — which Smits said were continuing in line with the scheduled 2014 launch. IHGs existing hotels in Bahrain are continuing to operate, albeit with lower occupancies and rates. “The hotel industry’s a very cyclical business. There are cycles; be it political unrest, downturns, natural disasters — different markets are at different stages. Some markets in this part of the world are going through a difficult patch,” comments Smits. “We’re operating the Bahrain hotels and we continue to support our operations with the owner. Our main aim is to be close to the owner and look after our guests and employees,’ he tells Hotelier. Meanwhile in Saudi Arabia, the group’s expansion strategy is all about timing. “Eventually, in Saudi Arabia, we will deploy all of our brands, but first you’ve got to make sure you’ve got enough Holiday Inns, Crowne Plazas and InterContinentals [all brands already present in the KSA market] before you do anything else,” explains Smits. “In India for example we had a joint venture agreement, putting our own money in, to add 3000 Holiday Inn Express rooms to the market — so it needs to be done strategically — do a few at a time,” he continues. This year, IHG will open its 502-room Crowne Plaza Madinah, followed by the launch of the 326-key Crowne Plaza Riyadh — ITCC and the 283-room Holiday Inn Riyadh Meydan before the end of the year. “Saudi Arabia has great potential, we’ve been there since the ’70s; we’ve got 22 hotels [comprising 5000 rooms] there and nine hotels [comprising 2700 rooms] in the pipeline to open in the next three to five years, so it is a great story. There is strong RevPAR and GDP growth and the government is investing in infrastructure,” says Smits. In March, IHG announced two projects in Riyadh’s King Abdullah Financial District comprising the group’s second InterContinental-branded hotel in the city, and the region’s first Indigo project, which is due to open in 2015. Speaking at the time, Smits said Saudi Arabia was “critical” to the group’s success in the region. He told Hotelier that he is most excited about the launch of the Indigo Riyadh KAFD. IHG has 38 of its boutique-style Hotel Indigo-branded properties globally, with around 60 in the worldwide pipeline, but none currently operating within Smits’ remit. “In my whole region I haven’t got one Indigo open yet. We’ve got one in Greater China — the first one I open will be in Bangkok next year — Riyadh will be the next. It’s definitely a brand we look to grow. Once it is open and someone can see it, that’s when it escalates.” In October 2011, Karin Sheppard, IHG’s senior vice president for sales and marketing – Asia, Middle East & Africa told Hotelier Middle East the group had earmarked 10 of the 60 pipeline properties for the Middle East, including hotels in Saudi Arabia and the UAE. Smits would also like to see the Indigo brand brought to Doha, he reveals: “An indigo would be great there, that would be a good place for Indigo.” But, for the time being, the group is more concerned with establishing the new InterContinental Doha The City — amid a flurry of other hotel openings in Doha from its competitors — as well as the forthcoming launch of the 378-key Crowne Plaza Doha The Business Park, which is due to open its doors in quarter four. On top of those already mentioned, IHG will open hotels in Jordan, Kuwait, Lebanon, and the UAE within the next 18 months. The 420-key Crowne Plaza Dead Sea Resort & Spa is on track to open this year, according to the group. And the 204-room InterContinental Kuwait will open in 2013, along with two Staybridge Suites properties in Beirut and Ras Al Khaimah. Asked about the challenges of overseeing such a large area, Smits says: “At the end of the day it’s about running your hotels well and delivering the brand promise and finding the right opportunities. There are lots around but not necessarily the right ones.” Highlighting his priorities over the coming year, Smits explains: “I’d like to bring the Indigo brand to Doha and Dubai, grow Holiday Inn Express, and I’d like to get a stronger resorts portfolio.”
Top cruise firms return to Bahrain
Two of the world's largest cruise companies have agreed to return to Bahrain once the season begins in October, said a top government official. German operators Aida and Towie are together expected to make 33 calls to the Khalifa Bin Salman Port between November and April, Culture Ministry tourism marketing and promotion acting director Mohammed Al Subaie told our sister publication the Gulf Daily News (GDN). He said talks were underway with other operators and Bahrain could host up to 60 port calls by cruise liners during the coming season, which will end in April. "While Aida will come every Wednesday, Towie will come every Friday," said Al Subaie. "Discussions are also being held with Costa Cruises and Royal Caribbean, who have expressed willingness to come to Bahrain." He said that if the two other companies also signed up to Bahrain, it would mean a return to a full cruise season for the first time since visits were disrupted by last year's unrest. "After the last two seasons were severely affected due to the unrest, we spoke to several of the cruise companies who said they were reluctant to come to Bahrain because insurance premiums had been substantially increased," he said. "They said they could look at Bahrain favorably if there were other incentives so we took a decision to do that." Cruise companies have expressed willingness to return to Bahrain after a raft of measures were agreed to offset higher insurance costs. "We will in the next few weeks talk with cruise companies to tell them what Bahrain has to offer," said Al Subaie. Increased insurance charges for docking in Bahrain in the wake of unrest mean each cruise operator will have to pay an additional $300,000 over the course of a season. However, the GDN reported last week that Bahrain had decided to halve port fees for cruise ships in a bid to lure back operators when the new season opens. Tourism companies are also offering discounts worth tens of thousands of dinars, while APM Terminals Bahrain which manages the Khalifa Bin Salman Port has reduced its charges for passengers from BD3 ($7.96) to BD2 each. Passenger charges could also be waived by the General Directorate of Nationality, Passports, and Residence Affairs, which may act as a "sponsor" for each visitor arriving on a cruise. The organization would also continue to waive crew charges and will look into the potential of waiving other charges, added sources. In addition, they said shipping or port agents who handle cruise liners coming to Bahrain have pledged to slash their prices of up to BD700 by 25 per cent. News that the country's cruise industry could be back on course is a welcome boost to the country's beleaguered tourism sector. According to estimates, each cruise ship tourist spends at least $125 during visits to Bahrain, which brings in around $300,000 to the economy per visit. But only 29 of the scheduled 50 port calls by various liners were made to Bahrain in the 2010-2011 season, which was abruptly suspended because of unrest - resulting in a loss of nearly 50,000 tourists. German cruise company Aida was the only operator to schedule stops in Bahrain during the 2011-2012 season, but it made only seven out of 13 planned visits and cited massive insurance premiums as the reason for cancelling port calls.
Source: TradeArabia News Service
Hilton to launch second hotel in Iraq
Hilton Worldwide, a unit of Blackstone Group, has agreed a deal with Mihtab Group to develop its second hotel in Erbil, Iraq’s fourth-largest city. The 300-room Hilton Erbil Hotel & Spa, scheduled to open in 2016, will tap into growing demand for leisure and business in Iraqi Kurdistan, the firm said. Hilton, which is also developing a 200-room Hilton DoubleTree Suites in Erbil, is part of a growing number of US hotel operators and developers betting on growth from businesses expansion and an eventual pickup in leisure travel to the region. Best Western has planned two hotels under its Premier brand while Marriott International plans to launch two hotels in Erbil. The Kurdistan region is attractive for hospitality projects due to its security situation, which has markedly improved in contrast to other parts of Iraq. Last month, Emirates Airline announced that it would begin servicing the city. Hilton is ramping up the number of properties in the Middle East. The operator in March said it has 41 properties in its active pipeline for the region and plans to double its number of employees in the region from 16,500 over the next four years. The US-based operator’s expansion programme comprises 11.5 percent of the entire MEA hotel pipeline with 15,000 rooms under development, according to STR Global research.