Middle East franchise interest building steam
Middle East franchise interest building steam
06 FEBRUARY 2019 9:34 AM

A recap of the second day of the Gulf & Indian Ocean Hotel Investors’ Summit being held in Abu Dhabi, with takeaways, quotables, photos and more highlights from the event.

ABU DHABI, United Arab Emirates—The second day of the Gulf & Indian Ocean Hotel Investors’ Summit was noteworthy for two subjects being mentioned numerous times, whereas in the three other editions of the annual conference they both had far less airtime—franchises and Africa.

As owners—and everyone else—become more alarmed at oversupply and tightening revenue-per-available-room numbers in the Middle East, a more sophisticated ownership is increasingly seeing the advantages of being able to analyze historical financials and having more control over cash flow and the direction assets take.

Take this quote from no less than Khalid Anib, CEO of Abu Dhabi’s sovereign wealth fund’s hotels division, Abu Dhabi National Hotels, who announced at the conference that “(ADNH is) starting up a white-label management company, which I think there is a huge opportunity for. Franchises in the region will grow and grow and grow.”

The feeling is that new models are appearing more attractive and will be tested as competition mounts and more hotel rooms come on line.

As for Africa, countries such as Ethiopia, Kenya, Uganda, Rwanda and Tanzania are getting the lion’s share of attention, and the fundamentals are present to back up the accolades.

One warning was that Ethiopia might already be having an oversupply problem. Other challenges such as trying to stick to development timelines and securing clean titles to projects continue, but there is more attention and enthusiasm now than even during other recent periods of noise about parts of this huge continent.

“Forty to 50% of the Addis Ababa pipeline already has spades in the ground. The numbers seem scary, but when you see what is happening (in Ethiopia), that can be absorbed,” said Yasin Munshi, director of lodging development, East Africa, Marriott International.

Quotes of the day
“The large brands might get (online travel agency) commissions down, but then they’ll just charge owners seamless connection fees … they want you to focus on the big, nice message.”
—Giuliano Gasparini, SVP, asset management and acquisitions, hotels and leisure, Aldar Properties PJSC, speaking on a panel on whether having a flag above the door makes for better-off or worse-off owners and in this instance on big-brand efforts to renegotiate OTA commissions, most notably from Marriott International and its new strength following its acquisition of Starwood Hotels & Resorts Worldwide.

“It will be interesting when you start mixing pad Thai with paella in your hotels.”
—Tony Ryan, managing director, global mergers and acquisitions, hotels and hospitality group, JLL, speaking on a panel featuring Dillip Rajakarier, CEO of Thai hotels group Minor International, who talked about Minor’s acquisition of Spain’s NH Hotels Group in October of last year.

“China has two longer holidays that last a week and a few shorter ones that last three days, and if you do not know that diary you will miss that opportunity. And understand the (Chinese travelers’) pre-planning calendar, or you might as well not have a China policy.”
—Carmen Hui, global commercial director of owner partnerships, Booking.com.

Tweet of the day

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