Armed with more knowledge than ever about guest wants, luxury hotels in the maturing market of the Middle East are moving away from the breathtaking and spectacular to the convenient, subtle and experiential.
ABU DHABI, United Arab Emirates—Luxury hotel product across the Middle East is redefining itself in response to guest requirements, according to sources.
Spectacular luxury, perhaps defined by the Burj Al Arab Jumeirah in Dubai, still has its place, but now the emphasis is on what guests consider luxurious, with a focus on simple needs as much as breathtaking wonder.
Speaking on a panel during the recent Gulf & Indian Ocean Hotel Investors’ Summit, Christian Nader, director of development at Kempinski Hotels and Shaza Hotels, said now that the region’s tourism and hotel-industry trajectory has matured, hoteliers are stepping back to ascertain how luxury can maintain itself going forward.
He and other panelists concluded that no one type of luxury product offers capital more comfort in terms of returns on investment.
“What is luxury? Is it the Burj? Or is it sustainability such as in a Six Senses (Hotels Resorts Spas) portfolio, or is it the provision of connected experiences such as with Rocco (Forte Hotels),” Nader asked, referring to the general picture and the offerings of his two fellow panelists.
Panelists said the Middle East guest increasingly sees travel experiences as defining who they are as people, so the major question being asked of hoteliers is how to aim product at this new type of guest.
Omar Romero, VP of development at Six Senses Hotels Resorts Spas, said guests at his company’s properties, more often than not, arrive with the desire to be entertained and stimulated, rather than just pampered.
“There is a growing desire for custom-tailored products and services, and new sub-segments are developing, including groups of women, and this differentiated product will bring higher returns to owners,” he said.
Roy Paul, development advisor at Rocco Forte Hotels, said his brand is investing more in infrastructure that operates competitively and efficiently but also focuses on iconic buildings or on new builds that look as though they are historic structures.
“The mantras of Rocco Forte Hotels are to avoid becoming institutional at all costs and to stay interesting,” he said.
Paul added that success in the region also would come from executives thinking like owners but operating like entrepreneurs.
Luxury no longer is just a case of providing structural eye candy, panelists said.
“We’re opening the Shaza Makkah in March, and the proximity of the hotel to Al Haram (Islam’s holiest spot) is key. The lack of distance to it is how guests define luxury, as they are going there five times a day,” Nader said.
“At our Shaza Salalah, opening in July (in Oman), luxury is privacy at the beach and brides having suites with direct access to the ballroom without being seen. As hoteliers, we have to see these needs and spend money wisely,” he added.
Rocco Forte’s Paul said his firm realized it was coming to the area with a different sentiment and a guest demographic with different expectations, considering its grand European tradition.
Luxury, therefore, is a different concept for his company, Paul said, adding that its next two developments are in Jeddah and Shanghai, which would bring the total portfolio to 13 properties.
“We’re a classic European hotel group. Small, private, family-owned, but we now see it makes sense to grow out of Europe. The two pipeline development are dramatic jumps for us in terms of building style,” he said.
Shaza also is reconfiguring its luxury boxes in response to new trends, Nader said.
“Shaza (hotels) will have the same number of rooms, and each will have the same number of square meters, but there will be a higher number of suites and also approximately 10% more connecting rooms, mandatory private pools, with less money spent on one common pool, and possibly another one for ladies,” he said.
“The first consideration is to know who you are building for. Then it is, what is the maximum supportable investment of a project versus the rate capacity of the market at the relevant level of luxury?”
Determining return on investment from this new wave of luxury, Nader added, requires a careful assessment of the impact of value engineering in light of required brand standards and the ability to deliver relevant luxury while driving average daily rate.
Perhaps no easy task, panelists agreed, but with the growth in travel to the region and the vocalization of guest wants, hoteliers have the basis for intelligent strategies.
“Our (furniture, fixtures and equipment) and (operating supplies and equipment) costs per key are approximately $70,000, which is close to the norm in our markets, but for the same investment we’re able to obtain sustainable (internal rate of return) and a unique product,” Nader said.
Six Senses’ Romero underlined that the region has the advantage of a “mix of boutique and luxury … (that) is the highest in the world.”
He added that wellness is becoming another definite focus in the Middle East luxury market.
One such trend, he said, is genomics, which focuses on appropriate diets, training and lifestyle.
“We’re seeing wellness in luxury hotels become more proactive,” he said.