GIOHIS Day One: Candid talk about growth, challenges
 
GIOHIS Day One: Candid talk about growth, challenges
30 JANUARY 2018 9:57 AM

A recap of the first day of the Gulf & Indian Ocean Hotel Investors' Summit in Abu Dhabi, United Arab Emirates, with quotables, photos and more highlights from the event.

ABU DHABI, United Arab Emirates—The Gulf & Indian Ocean Hotel Investors' Summit has become an anticipated beginning to each new year as the region becomes ever more popular with visitors, average daily rates for its key cities Dubai and Abu Dhabi continue to be relatively low, and new brands and lodging sectors continue to be introduced.

Of course, no hotel conference is complete without oodles of data.

Among highlights on the first day of the conference, STR managing director Robin Rossmann said Dubai now is the fourth most-visited city on the planet, close behind Paris. The number of visitors to the city has doubled since the 2007 mark of eight million, he added. (STR is the parent company of Hotel News Now.)

For the entire Middle East, Rossmann said, the predicted new supply of 105,616 hotel rooms by 2020 would require a fleet of 42 more A380 airplanes in regular service.

Nihat Ercan, of business consultancy JLL, said the Indian Ocean region saw a new benchmark sale in 2017, with the 45-key Cheval Blanc Randheli in The Maldives, sold to an undisclosed Middle East buyer for $200 million, or approximately $5 million per key.

Editor takeaway

Miffed. That’s what owners are, at least in the region the GIOHIS covers. As ADR and revenue per available room continue to be squeezed, many took the opportunity of the very frank discussion this conference is known for to discuss the problems.

Adding context to that conversation were executives from online travel agencies—Christopher Michau, VP of global partner group at Expedia, and Carmen Hui, global commercial director of owner partnerships at Booking.com.

Michau said if hoteliers are worried about monopolies in the market, they need not look farther than Google, which he said has 98% of the search-engine market.

Hui asked hoteliers if they knew exactly what each of their distribution channels brought in as revenue.

“Management contracts and legacy models never envisioned OTAs would come into the picture … so if you do not have a knowledge of your baseline, you’ll never know what improvements are working,” Hui said.

Various speakers hinted that hoteliers had made earnest but ultimately half-hearted attempts over the years to get together to discuss and tackle the problem.

There is the sense that hoteliers simply no longer have the time or energy to continue criticizing OTAs as disruptors, and that in a world where consumers continue to love the choice and convenience of such platforms, it is in everyone’s interest to work together more strategically and diligently.
-Terence Baker
Senior Reporter, Europe
@terencebakerhnn

Photo of the day

Suchad Chiaranussati (left), founder and CEO of ownership firm SC Capital Partners Group, did not hold back from criticizing the commission structure of online travel agencies during a panel discussion on day one of the Gulf & Indian Ocean Hotel Investment Summit. Also pictured is Carmen Hui, of Booking.com, who until last May was SVP of investment, Europe, for owners Host Hotels & Resorts. (Photo: Terence Baker)

Quotes of the day
“We need to start questioning management agreements. Firstly my question would be: Why did we sign one in the first place?”
—Anil Bhardwaj, executive director of owner AA Almoosa Enterprises, during a panel titled “Are the days of the traditional management agreement over?” He added that if management agreements were structured to be weighted more fairly to owners, they would be spoken of in better light and, most likely, franchises would disappear.

“Management agreements have to change, and they are changing. No brand is saying ‘sorry, but page 53, clause four.”’
—Kees Hartzuiker, CEO of hotel consultancy and asset manager Ròya International, during the same panel. He added that in an era of increasing costs and diminishing returns to owners, the days of the management agreement are limited, as they are today.

Tweet of the day

2 Comments

  • Janelle April 6, 2018 8:10 PM Reply

    Heck of a job there, it aboltulesy helps me out.

  • Janelle April 6, 2018 8:10 PM Reply

    Heck of a job there, it aboltulesy helps me out.

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