Dubai : According to several industry reports, hotel occupancy in Dubai is seeing a steady increase. Deloitte reported a 5.5 per cent increase from January to July this year, bringing the average occupancy rate to 72.2 per cent. Taking advantage of the recovering industry, the StayWell Hospitality Group (SWHG), an Australian based hotel management group, recently opened its first hotel in Dubai.
The Park Regis in Kar-ama is the company's first venture into the Middle East. Simon Wan, CEO and Managing Director of SWHG, talks about the opportunities present in the Dubai market and the details of his aggressive expansion plan for the near future.
Gulf News: What is the portfolio of hotels under the StayWell Hospitality Group?
Simon Wan : We have altogether 24 hotels located in Australia, New Zealand, Singapore, Dubai. Our hotel in Kuala Lumpur will be open in 2011 and our hotel in Morocco in 2012. Hopefully I will soon be able to make announcements of new hotels in London and Bangkok. We have also recently entered into a joint venture arrangement with China which will give us a platform of 38 hotels. The company has four shareholders including myself and the others are based in Sydney, Singapore and London. It was a strategic move to have partners based outside Australia because my vision is to be global.
What segment of the industry does the hotel market itself to?
Most of our hotels are considered business hotels because they are located in city centres. However there are about five hotels that are considered more leisure hotels such as our property in Hunters Valley and Blue Mountains in Australia. Our Park Regis hotel in Karama is a business hotel but at the same time, the profile of our customers is mixed. In Singapore, 60 per cent of our business comes from the commercial sector. In Dubai 60 per cent would come from the leisure sector.
Within the StayWell Hospitality Group, we have two brands; the Park Regis which is a four star brand and a three star brand called LeisureInn. At this stage we haven't got any intention to go up to the next level, but there could be opportunity to go into the lifestyle brand which is geared more towards the younger generation who are used to selective interior design, and a funky and casual approach.
Why did you chosen Dubai as your first venture in the Middle East?
Our new property in Dubai certainly marks our entry into the Middle East hotel market. If anyone were to pick a location to start with in the Middle East, I think the most popular choice would be Dubai.
We are also in the process of negotiating and exploring a number of opportunities in the GCC and the other Middle East places such as Egypt. Having a property in Dubai will give us the resources to tap into new opportunities and to help develop the brand awareness in the region.
What we want to do is create is a platform of hotels throughout the world starting from Australia. If you look at the map, geographically, and look at a good starting point in Asia, one would choose Singapore, the closest commercial city to Australia. The next is the Middle East. If one wanted to develop a network of hotels in this region you would start off with Dubai as it is one of the region's fastest growing markets from an accommodation and tourism standpoint. You have the infrastructure here, one of the best airports in the world and a lot of tourism and leisure facilities. This would seem from any perspective a logical location to start. We're aiming for cities in regions where we can get the most prominence and exposure. Dubai now becomes our dot in the Middle East. Our next dot would be London which will service Europe.
What are your future growth plans in the region?
We're looking at Qatar, Bahrain and Egypt. There are also upcoming places I've seen lately that are attractive tourism markets such as Syria. The GCC itself is an important market given the economic ties among each other. There's no question that you have to link the GCC market together to get your prominence here. But I am also looking outside the GCC market to the wider Middle East market.
Over the next five to ten years there's no question about the improved airline services and tourist facilities that certain countries are opening up in the tourism sector. I can see big growth in India where there's a huge middle class with a disposable income.
Do you think Dubai is a good place to open a hotel after the downturn?
From a selfish standpoint, a slowdown in construction makes me happier because it restricts the supply of hotels coming into Dubai. It'll give existing operators and new operators the opportunity to bring their property into profitability. This comes from having good room rate comparable to the rest of the world.
Three years ago, Dubai was famous for its exorbitant room rates. It was more expensive than established markets like London and New York. The restructuring of the hotel and business sector of Dubai has made hotel rates come down, making it more attractive and reasonable for tourists. There's no question that the slowdown in US changes the affluent market in the next two to three years. When the economic situation in Europe and US improves, we will see those more affluent markets returning to the Middle East.
One of the issues of the market is the demand is not there. People are staying home. But I think with every hotel market you need to widen your market segment from a luxury market down to a budget market you need to cater for that. Dubai has a goal to double their tourism intake, but in order to do so you need to widen your market base so you have both your up-market customers and budget customers.
What is your five-year growth plan for StayWell Hospitality Group?
I hope to get 100 hotels within five years and the success of that is very much dependant on whether I'll be able to get a sound platform in some bigger countries such as China and India. Those two countries represent the most promising growth prospect in the next decade. So far we have been successful in concluding and starting our hotel platform in China and it is conceivable that we can double it in five years. We are currently looking at the Indian market and if I'm lucky enough to be successful there, it will be a comfortable market for us.
I see a lot of opportunity in Asia. We've started a hotel there, and I'll see if we can get 10 hotels in five years time. In the Middle East, we started with Dubai and I'm hopeful again we're going to have 10 hotels in the Middle East in five years time.
In Europe, I hope to be able to announce in the next couple of years, with London as our anchor, to get to about 10 hotels there. Once I get London going, I'm going to start thinking about India and the North American market. I'm hopeful I'll be able to build 100 hotels in the next five years with a very focused geographical spread.
How have your profits been over the past few years?
We have been lucky because Australia is one of the few countries that did not go into recession. Business was a bit subdued 12 months ago but we bounced back very strongly and have record profits in the last months from our Australia properties. Singapore is a strong opening for us, so we would expect strong revenue from there, Dubai is a bit softer but we're going to persevere here because it is going to be a strong market in the next five years.
What are the future trends in the hotel business?
I think more people are opting for lifestyle, boutique hotels that are smaller and more personal of maybe 100 rooms. In the next 5-10 years you will see a lot of these hotels coming up that bring a more personalised service. I think you'll be able to, when you make a reservation, order the type of pillow you want, order the music you want to play, order your room service breakfast.
