Dubai: With aggressive expansion plans for the Middle East over the next few years, French hotel group Accor is likely to experience delays in its UAE projects this year owing to market factors including the ongoing political instability in the region, according to the company's top executive in the region.
The company has plans to open 23 hotels (comprising 5,891 rooms) in the Middle East until 2015, the bulk of which — 12 hotels — will be in the UAE, and of which 10 are due to open this year.
"Some of these hotels are already delayed. We were supposed to open some of these in 2011, but ended up opening just one hotel last year due to poor market conditions such as the Arab Spring," said Christophe Landais, Managing Director of Accor Middle East.
Asked if he expected more delays this year for UAE projects, he told Gulf News yesterday on the sidelines of a conference: "I have to say yes. Most of the hotels due to open this year were supposed to open in the first or second quarter. And some of them have been pushed back to the third quarter now."
However, the company does not expect any of its projects in the country to be cancelled in 2012, according to Landais.
"We expect no cancellations," he said, adding that Accor ME had some projects postponed in 2009 when the crisis hit, especially in Dubai.
Accor was supposed to develop three hotels at Jebel Ali's DWC airport as well as the exhibition centre there — Pullman, Novotel and Ibis, according to Landais.
"Those have been postponed," he said, adding that investors faced some delay in finishing the construction.
‘Nothing's happening'
"We were going ahead with these projects until January 2009 when the DWTC (Dubai World Trade Centre) cancelled or postponed the progress on those hotels. And it hasn't yet started again. Until they restart these projects, nothing is happening there," Landais said.
Asked when the work on those projects is likely to restart, he said: "I have no idea… these were to be linked not only with the airport at DWC, but also the exhibition centre."
The company expects its future regional growth to be fuelled largely by the UAE and Saudi Arabia markets, and Accor aims to open seven hotels this year in the UAE. [It currently it manages 15 properties.]
And of the 23 hotels pipeline for the region, Accor will open four hotels in Saudi Arabia, three in Syria, two in Qatar, and one each in Egypt and Bahrain, according to Landais.
Further, in line with Dubai market trends, Landais expects hotels to increase room rates by at least 15 per cent on an average this year.
"That's definitely going to happen," Landais said.
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Expansion drives €6b revenue
Dubai: Accor, which released its 2011 full year financial results last week, said it achieved €6 billion (Dh29 billion) in revenues globally last year, as the company earned attributable net profit of €27 million in the period, fuelled by aggressive expansion worldwide.
Asked how much the Middle East accounts for Accor's total global revenues, Landais said: "It's difficult to say, as we operate only management agreements here. In terms of volume of hotels and rooms, however, we represent about five per cent of Accor worldwide.
"But in terms of turnover, it would be minuscule." The group's current regional portfolio totals 56 operational hotels comprising 12,357 rooms in 10 countries, represented by brands such as Ibis, Novotel, Mercure and Sofitel.
