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Rotana CEO: Going Where No One Goes Is The Winning Strategy
Saturday, 9th March 2019
Source : Jabeen Bhatti - Exclusive at ITB Berlin

Most hoteliers eying the world's hotspots as new markets might be put off by conflict, poverty or even the lack of tourists, credit cards or lettuce.

Not the Abu Dhabi based hotel management company Rotana: It sees its future growth in serving the underserved, in venturing into neglected markets in Iraq, the Democratic Republic of Congo and Pakistan.

"The business opportunity is substantial," Rotana CEO Guy Hutchinson told 4Hoteliers in an interview on the sidelines of the ITB convention in Berlin this week. "It is one aspect of our development strategy, and whether it is Iraq or Kurdistan or Sudan or Iran or Angola – these markets are underserved."

"Generally, what's there is more than 10 years old, legacy hotels," he added, by way of explanation. "There has been nothing new coming into those markets for years. So the opportunity is really substantial."

Hutchinson points to the company's two hotels in Erbil as examples – the latest opened a year ago. "They are doing fantastic," he said, describing the hotel's clientele as embassy staff, oil and gas officials and other business travelers. "You're the only game in town. There is something to be said for being the only choice."

"In Kinshasa (DRC), meanwhile, the hotel is commanding the market," he added.

Size Matters

The company, which started in 1993 with two hotels, has grown to hold a portfolio of 66 hotels with another 46 in the pipeline to open within the next few years.

And while Hutchinson said 2018 was a "mixed" year, he added that the recent first quarter results were on track to be the best he has seen in five years.

"Some regions have been more difficult than others, there has been a fair amount of geo-political unrest across the Middle East and that has brought it's challenges," he said.

He attributes the success of the company in part to opening hotels in places such as Sudan or Iraqi Kurdistan and to be able to execute well because of Rotana's size.

"We are not a large company, we are not a small company, we have a scale that allows us to have a single-asset focus," he said.

For example, in Sudan where the company opened a hotel more than a decade ago, there are no credit cards, he said. Trying to get a multinational to operate in that environment, they can't do, he added. "We can face problems head on, get down to basics, go local," he said. "We understand how to put a burger on the table when there are no locally available inputs. In Sudan, whenever we have iceberg lettuce there, we have every ambassador in town coming in."

Understanding how to make a five-star hotel work in such an environment take engagement, structure, attention to detail – leadership thinking, he says: "It's easy to get lettuce in New York, but if you want that in Baghdad or Sudan, it doesn't work the same way."

Saudi-ization

One market the company is eying for expansion is Saudi Arabia. For the past few years, the country has made no secret of its push to diversify its economy, open itself up to tourists and develop itself as a travel destination.

"If you look at Saudi Arabia, there are something like 60,000 hotel rooms – that's nothing for a market for that size, that's wholly underserved," Hutchinson said. "Here, we are at the beginning of an upswing."

Rotana plans to open four new hotels by 2020, in addition to the six the company already has in operation.

"It's had its challenges, it's not effortless, and can be awkward, you have to manage the Saudi-ization," he said, referring to the requirement that a certain percentage of the staff must be Saudi nationals. "But if you see it as an opportunity, it's okay. It all depends on how you look at it. Just go out, work it out. It's normal to have locals work in your establishment. Or it should be."

Other areas the company is eying in the near future include Eastern Europe, South Asia and Africa.

"We just signed Lusaka, and Nairobi – where there is nothing new," Hutchinson said. We are actively working on Pakistan. There is nothing there, and we think it's definitely a market for us. There has been nothing new in 30 years."

In addition to signing a deal for a fourth hotel in Iraq, the company will open its first hotel in Iran later this year. In Kabul, a project has been on hold while in Sarajevo, its hotel opens later this year.

"This is particular interesting region for us because there is a lot of outbound travel from GCC to these countries," Hutchinson said, referring to Eastern Europe and the Balkans. "That offers a lot of potential. Where we see our customers going, we put our brand there because we know we are going to get traction. Bosnia, Croatia, the Stans (Uzbekistan, Kazakhstan) – we see opportunity there for us."

The Nitty-Gritty

Hutchinson attributes the overall success of the company's growth strategy ultimately to a deep level of engagement. Just because Rotana might be the only game in town doesn't mean taking guests for-granted.

"What we believe is really critical to our success is our level of engagement, that single-asset focus," said Hutchinson. "I will look at every single dish that comes out from the restaurant, I will have adjusted the presentation. We know what is happening at the front desk, in housekeeping, in our restaurant."

"We might be the only game in town sometimes," he added, "But that makes us work harder. We know how to do this well, and we do, and over time it builds loyalty. That's paid off."

Photo: Jabeen Bhatti

This is strictly an exclusive feature, reprints of this article in any shape or form without prior written approval from 4Hoteliers.com is not permitted. Jabeen Bhatti is reporting exclusively for 4Hoteliers.com at ITB Berlin 2019 - www.4Hoteliers.com/itb.

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