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Hilton aims to expand 80% in region by 2012

Abu Dhabi is market to be watched as hotels move in

Rudi Jagersbacher
Image Credit: Supplied
Rudi Jagersbacher
Gulf News

Dubai: Hilton Worldwide is aiming to expand in the Middle East and Africa (MEA) by 80 per cent by 2012, according to the company's top official.

"We had an estimated growth recorded. Our pipeline will allow us to grow by up to 80 per cent in the Middle East and Africa region up to 2012," Rudi Jagersbacher, Hilton Worldwide's President for the Middle East and Africa, told Gulf News on the sidelines of the Arabian Hotel Investment Conference 2011 in Dubai.

"Since 2009 until today our portfolio of growth has hit 80 per cent — including hotels being opened and hotels being built. That's a huge increase in our portfolio performance from the development point of view," he added.

For Hilton, the region's beach hotels deliver eight per cent RevPAR (revenue per available room — an industry measure for hotel performance) at present, followed by 3-4 per cent in city centre properties, according to Jagersbacher.

"The highest RevPAR — in double digits, is actually in Africa," he said, adding that RevPAR growth is the fundamental indicator of how business is generally.

Asked how much the Middle East region accounts for Hilton's global revenues as present, Jagersbacher said: "It is very small. It is more about potential in the Middle East."

Hilton currently has 3,600 hotels in its global portfolio, of which 50 are in this region.

"We would have 80 hotels in the region within a period of two years and with that there would be fairly unlimited growth going forward," said Jagersbacher.

Out of the total global Hilton portfolio of nine brands, the company is represented by five brands in this region including the Waldorf Astonia and Conrad in the luxury segment of the market; Hilton and Double Tree in the upper upscale segment; and Hilton Garden Inn in the mid-scale range.

Asked how soon Hilton would bring the remaining brands to this market, Jagersbacher said: "We will not get all the brands to this region. Before we move the brands in, we need to have a market. There are a lot of markets which we believe are not mature for this region for a considerable time.

"And looking at the five brands which we have and doing that properly is adequately representing our worldwide portfolio."

New pipeline

Hilton Worldwide opened, as a company, 178 new hotels in all globally. And the anticipated opening for 2011 is 230 hotels, according to Jagersbacher.

"Around 10-11 of those properties would be in the MEA region," he said.

The company yesterday revealed its plans to open a Double Tree in Al Barsha — the first in Dubai and Hilton Garden Inn in Doha — the first in Qatar.

"From the regional point of view, there isn't unlimited growth. And that's why the diversification of brands is extremely important," Jagersbacher said.

He added that this year has started "quite well", with the company having signed the second resort in Syechelles, Double Tree in Ras Al Khaimah and Dubai, Hilton Garden Inn in Doha and several hotels in Saudi Arabia.

Further commenting on Abu Dhabi, Jagersbacher said: "A market we need to watch in this region is Abu Dhabi as there is a big supply of a lot of hotels coming in and so it would be interesting to see how the performance will be going forward. So we will have to monitor this market very carefully."

The geopolitical turmoil in the Middle East did not affect Hilton's performance in the region, he said.