Rotana forges ahead despite global economic woes

Rotana, the region's largest hospitality management company, currently operates more hotels in Dubai than any other single operator.

It is planning to open four hotels in the emirate this year, one of which - Arjaan Dubai Media City - opened in September.

So far the company says it has not been forced to cancel or delay any of its projects because of the economic downturn. It is planning to open 65 properties by 2012, and aims to have a hotel located in every key city in the Middle East and North Africa.

'The financial crisis has tightened liquidity in the UAE, but I don't see it having an impact on our projects in the Middle East as our customer base in the region has not been hampered by it,' says Michael Marshall, Rotana's Corporate Vice President for Sales & Marketing.

Challenges remain

Although its future plans remain unchanged, Rotana has not been immune to the challenges that are facing hotels in Dubai.

Occupancy in the emirate has taken a hit, partly because Ramadan fell during the summertime, and also because demand for the summer season has slowed.

'There was a time when you had to come and see Dubai, but that buzz has slowed a little,' Marshall said. 'However, that will pick up again when Dubailand is built.'

Another factor that is impacting occupancy in Dubai is the rising inventory of hotels in the emirate. Faced with these new challenges, Rotana was forced to reduce its rates and offer special packages during the summer.

Still, Rotana has been very pleased with the performance of its latest property, Arjaan Dubai Media City. Surprisingly, 70% of the guests at the property, which offers hotel apartments, have been short-terms stays.

'You can still have a good opening, but it's not a matter of just opening the door and watching the people come in, like it was in Dubai a few years ago,' Marshall said. 'You have to be more focused.'

Overall, business service at Rotana's hotels remains very strong, Europeans are still coming, and the hotel chain is also getting a lot of GCC travellers, Marshall noted.

Upcoming Rotana projects

One project that Rotana hopes will generate excitement is the Rose Rotana, which will be the tallest hotel in the world. Set to open in December 2008, the 72-storey property will stand 333 metres high and offer 480 rooms.

The hotel will be situated on Sheikh Zayed road in Dubai, which is a great location because the thoroughfare 'will always be the centre of business in the emirate', Marshall said. The property will replace Dubai's Burj Al Arab as the tallest hotel in the world.

The company is also looking to create a buzz by offering a new alcohol-free brand, Rayhaan Hotels & Resorts. The brand aims to respect the beliefs and culture of its guests while fostering the image of a new Arabia.

Rotana has signed an agreement with Jiwar Real Estate Management & Marketing Company to manage its first property in Saudi Arabia, Al Marwa Rayhaan in Makkah, which will open in March 2009. Most recently, Shuaa Capital Saudi Arabia, the Saudi Arabian subsidiary of Shuaa Capital, announced the signing of a master agreement with Rotana to develop 17 four- and five-star Rayhaan hotels and resorts in addition to hotel apartments across the kingdom comprising 5,500 rooms.

The company is also in negotiations with various partners to develop Rayhaan properties in Abu Dhabi and Dubai and these will be announced in due course, Marshall said.

Rotana is not concerned about opening an alcohol-free brand in this economic climate because it believes the high occupancy that these hotels will achieve will offset the loss of revenue from sales of alcohol.

'The alcohol-free concept is an entirely new proposition in the region and the market, for that matter,' Marshall said. 'With research indicating this category's huge potential due to its inherent appeal in the Middle East, Rayhaan is set for incredible growth in the upcoming years.'

See also:
Gulf tourism faces challenges from economic slowdown
Premier Inn sees 'huge opportunity' in the Gulf