Snapshot: diversification is the challenge in the Gulf and Indian Ocean

Piers Brown By Piers Brown
Uploaded 04 February 2018

Last week we travelled to the Gulf and Indian Ocean Hotel Investment Summit (GIOHIS) in Abu Dhabi to meet lots of hotel investors and report on all the latest serviced apartment and extended stay news from within the region.

Piers Brown, CEO International Hospitality Media hosted a short panel discussion with Guus Bakker, COO Frasers Hospitality and Nehme Darwiche, CEO Jannah Hotels and Resorts entitled: Serviced apartments - do large-scale operators offer an advantage over locally-grounded players?

Global brand recognition and loyalty - important for hotels - as important for longer stays?

Bakker agreed that brand recognition and loyalty were as important for extended stay and highlighted the need for local teams on the ground here in MEA who have a detailed knowledge of the area and can speak on a one to one basis with the client eg. relocation agents and SME's about their requirements.

He also said the average length of stay was shortening with the growth of OTA bookings and a more flexible,  reduced term work assignment requirement within the region currently. 

Darwiche highlighted that as a local owner / operator he feels his company has an advantage (being local), particularly with MEA Clients that book and then repeat based on the quality of service they receive.

Marketing - a different distribution pattern - real estate companies, relocation agents, direct corporate HR - is this much more localised?

Darwiche said Jannah Hotels and Resorts as a local owner and operator, is well established within local real estate and relocation markets like Abu Dhabi and Dubai, and this is down to the success of his teams' client relationships. He said "Jannah hotels and resorts tries to place less emphasis on OTA bookings, and only use the distribution channel to drive awareness of the Jannah brand in markets hard to reach, outside GCC.

The conversation moved to holiday home and private apartment rentals and the Dubai Department and Tourism Commerce Marketing (DTCM) swift approach to regulation, which was generally welcomed by Darwiche, with Bakker adding "All Frasers Hospitality asks for is "these short term rental companies play by the same rules as ourselves (and other serviced apartment providers) with fire safety and all the other accommodation regulations we do"

Serviced apartment pipeline and challenges ahead

When asked about serviced apartment properties soon to open, Bakker said he's pleased with the progress Frasers is making in China and Darwiche highlighted Jannah is moving into Sri Lanka having signed 3 deals recently. In wrapping up the session, both gentlemen highlighted that diversification of the brand portfolio was their main challenge in the future.

 

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