Talking business: Guy Hutchinson, Rotana Hotels & Resorts

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• Rotana was among the first serviced apartment/aparthotel operators in the Gulf region. When did the company enter the market and how many such properties do you now have in your portfolio?

"Indeed, Rotana was the first company in the Middle East to launch the "All Suites" concept in 1996, which was rebranded to Arjaan Hotel Apartments by Rotana. The Arjaan Hotel Apartments by Rotana brand was launched in 2008 as part of our bid to provide guests with more diversified hospitality options, and offering a unique long-term residential experience. It has since evolved to become a key brand for us, with a portfolio of 17 operating properties across eight markets in the Middle East and Europe, and a total inventory of 3,262 rooms. In addition to these existing properties, we currently have nine hotel apartments under the Arjaan brand in various stages of development, covering the GCC, Middle East, and African markets. Once completed, these properties will add a further 1,804 rooms to the Arjaan by Rotana portfolio."
 
• What proportion of Rotana's total rooms under management is made up of serviced apartments?

"With a portfolio of 3,262 keys, serviced apartments currently make up 21 per cent of Rotana's total rooms under management. The breakdown is as follows: 2,139 keys in the UAE (994 in Abu Dhabi, 920 in Dubai, and 225 in Fujairah), 391 keys in Jordan, 319 keys in Turkey, 175 keys in Lebanon, 128 keys in Bahrain, and 110 keys in Syria."

"As one of the company's fastest growing brands, Arjaan Hotel Apartments by Rotana is set to add another 1,804 keys to its portfolio within the next four years, taking its room inventory beyond the 5,000 mark. Arjaan's robust development pipeline includes two properties each in Abu Dhabi (656 keys) and Muscat (200 keys) and one property each in Kinshasa (100 keys), Erbil (150 keys), Doha (225 keys), Marrakesh (140 keys), and Dubai (333 keys)."

• The Gulf serviced apartment market has grown considerably over the last few years - how far do you think the sector is from reaching full maturity?

"The serviced apartment sector is considered the strongest performer within the GCC's hospitality market, showing a consistent capability to tap into fresh investor interest and managing to hold strong despite market fluctuations. What attracts investors to this segment is the fact that serviced apartments typically offer a higher yield than standalone residential units, while also commanding higher selling prices."

"The Middle East region continues to see the biggest increase in serviced apartment supply anywhere in the world, with GCC markets being the fulcrum of this growth. Dubai and Abu Dhabi, along with Doha, are counted among the most mature serviced apartment markets in the MEA region, with a report by global commercial real estate services organisation Colliers International estimating these three markets to now account for 35 per cent of total regional serviced apartment supply."

"Observing that presently there are more than 29,000 serviced apartment keys in Dubai, with over 5,600 keys planned to be delivered in the lead-up to 2020, the report states that the emirate has the potential to absorb a further 8,200 keys - over and above the planned supply of serviced apartments. This highlights the tremendous growth potential for the serviced apartment sector in Dubai and the wider region. Tapping into this rising demand, Rotana is expanding its serviced apartment offerings across the regions where we operate to consolidate our already strong presence in this segment."

• Has the guest profile for your apartment units changed much over the years? What is the proportion of leisure v business?

"The GCC is the biggest source market for Rotana serviced apartments and we expect travellers from the Gulf region to continue to be the primary demand drivers for our properties in this fast-growing segment in the years to come. Currently, business travellers' account for 64 per cent of guests at Rotana serviced apartments across regions, with leisure travellers making up the remaining 36 per cent.

• Which areas of the MEA region do you see as current and future development hotspots for the sector?

"The GCC is expected to witness considerable growth in serviced apartment supply, with Doha, Dubai and Abu Dhabi tipped as the markets that will attract the largest share of long-stay demand.  These markets also score the highest in terms of guest satisfaction, and are expected to propel the segment to the next stage of growth. Reports state that an estimated 7,000 keys will be added in the next four years in Dubai and Abu Dhabi within the extended-stay sector, revealing an opportunity for hotel operators in the region to meet a growing demand for serviced apartments that combine modern amenities with the conveniences of home and which cater to the needs of a diverse range of guests.

• What do you see as the biggest challenges and opportunities facing the sector in the MEA region now and over the next few years?

"Across the region, serviced apartments continue to show higher performance than hotels. People are increasingly looking to travel for longer periods of time with their families. The evolution of technology and the changing ways of conducting business have meant that businessmen and professionals are looking to stay in a destination for extended periods, catalysing a shift in focus towards the development of well-appointed serviced apartments that offer guests a genuine 'home away from home' experience. Markets such as Dubai, Abu Dhabi and Doha - along with others in the region - are also putting significant emphasis on developing their leisure and entertainment offerings. All of these are key factors that will drive continued demand for serviced apartments in the region."

Guy Hutchinson will be speaking at the 2016 Serviced Apartment Summit MEA in Dubai on October 30 and 31.

www.rotana.com

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