The Grand Millennium Al Wahda is the latest kid on the block in Abu Dhabi's hospitality market. And to differentiate itself from competition, the property, owned by Al Wahda Football Sports Club Company, already enjoys the sobriquet of being ‘the largest hotel in Abu Dhabi'.
Given the tough operating environment for hotels, this would, however, mean the management needs to work harder to fill the vast room inventory. A location smack bang in the middle of Abu Dhabi's business district and synergy with the abutting Al Wahda Mall will, however, help the operator to tap both business travellers and city-break guests.
This is a wise strategy, considering Abu Dhabi's status as a MICE (meetings, incentives, conferences and exhibitions) hub and the GCC leisure traveller's lookout for wider shopping options. In an interview with Property, Michael Sorgenfrey, the hotel's general manager, discusses new source markets, promotional offers and Abu Dhabi's changing tourist profile.
When did the Grand Millennium Al Wahda open? How has occupancy been since the launch? Is the hotel targeting both leisure and business travellers?
Grand Millennium Al Wahda opened its doors on October 15, 2010, and the occupancy has been encouraging so far. Thanks to our central location, we have been attracting a number of business travellers who find the fact that we are located close to the major business districts and main thoroughfares advantageous for meetings and networking. Our business mix includes leisure travellers and residents because of the fact that we have a super-sized health club and spa, a plethora of restaurants and that we are located right next to Al Wahda Mall which has great shopping and entertainment for children.
What is the average room rate in Grand Millennium Al Wahda? Have you devised any special offers to prop up occupancy?
We do run promotions and are currently offering a region-wide spring promotion that includes all our Millennium Hotels and Resorts in the GCC. At the Grand Millennium Al Wahda, we have a weekend and spa package for Dh795.
Has Grand Millennium Al Wahda tied up with any airlines to bring in more guests? Which are your primary source markets?
Airlines are naturally part of our business mix and we are currently working closely with Etihad Airways. For us, our primary market is the GCC, with a healthy 65 per cent of our guests coming from neighbouring Saudi Arabia, Kuwait and Qatar. The UK is also of primary interest as a growing market, and one which we shall be investing in this year in terms of sales trips and marketing. We are also looking at emerging markets such as China and India because statistics show that both these countries will outgrow any other markets in the coming years.
Do you believe there is an oversupply of hotel rooms in Abu Dhabi? Is this exerting a downward pressure on room rates?
While in the short-term there may indeed be pressure on room rates because of the flood of hotel rooms in Abu Dhabi, they are predicted to move in an upward direction as the city adds more attractions and demand drivers. The fact that Abu Dhabi's development is continuing at a remarkable pace with the opening of the Ferrari Theme Park, the development of Yas Island, Al Reem and Saadiyat, as well as the investment in the Adnec exhibition centre to attract MICE business will all help the city fill its hotel rooms and create demand. We all just have to weather the storm and become more creative.
We want to focus on the positives and make sure that the guests' journey is in line with our positioning as an urban luxury destination in the heart of the capital.
For a five-star hotel, what is the advantage of leveraging synergies with an adjacent shopping mall?
Al Wahda Mall has a great retail mix that only serves to enhance our guests' stay. Business and leisure travellers are a few steps away from some of the best retail outlets, food court and other mid-scale restaurants. I believe that this also works for the local community who often prefer the restaurants within a hotel or who want to take advantage of the hotel's spa services after a long day of shopping. We actively promote the fact that we are situated adjacent to a shopping mall to attract the GCC traveller, particularly the families who quite often lack the same choice of shopping options that we are fortunate to have here.
Are you catering to the MICE market as well?
The MICE market is very much on our radar. The Grand Millennium Al Wahda is the only hotel in the city capable of accommodating large groups under one roof — those requiring 300 or more rooms. And, following the injection of 12 new meeting rooms as well as a banquet hall, we are set to strengthen our MICE offering. This unique combination of factors gives us a distinct edge when competing for corporate and large groups.
Can malls by themselves be solely relied on to fill up hotels?
There is no doubt that malls are a draw for GCC travellers and many of our guests do choose to stay with us because of our close proximity to Al Wahda Mall. However, shopping malls alone cannot be expected to fill hotels, especially as large as ours. We do expect a gentle upward curve of guests who come to the UAE for the shopping and with the completion of the extension on the Al Wahda Mall, this segment will be a significant source of business for us this year.
Being a mall-based hotel, are you witnessing a lot of demand from leisure travellers from the GCC?
Yes, especially from Saudi Arabia and we are currently evaluating the option to open a sales office in the Kingdom to help drive more business. This geographical market currently makes up 10 per cent of our business mix. In addition, this market tends to book the larger one- and two-bedroom apartments as they travel in groups. Oman and Bahrain are also important leisure markets for us and we will be focusing our efforts on attracting travellers from these destinations, particularly during the summer months.
Who are your competitors in the mall-hotel market in Abu Dhabi?
Currently, there is only one other similar product to ours and that is the Abu Dhabi Mall which has the Beach Rotana as an adjoining hotel.
How challenging is it for a new hotel property like yours to differentiate itself in a crowded hospitality landscape?
Opening a hotel of this size in the current climate is not without its challenges. However, we believe that the fact we are the largest hotel in Abu Dhabi with the largest health club and spa with an extensive list of treatments is a key differentiator. We are in the unique position of being able to accommodate large groups.
Is it challenging for an operator to manage a mall-based hotel?
On the contrary, operating a hotel that has a shopping mall next to it is clearly an advantage for us and, of course, for the guest. It is a major selling point and one that we certainly take advantage of.
Do you think future hotels need a mixed-use component to drive up the guest numbers?
The benefit of mixed-use hotels flows both ways — each component of the project enhances and improves the other. Mixed-use properties naturally appeal to the guest but it is critical that the right operator is in place to manage the development. From the developer's perspective, the proximity of a hotel to retail and offices provides a wider range of income and a built-in source of demand.
With Abu Dhabi's leisure portfolio still a work in progress, how confident are you of attracting leisure travellers in the short-term?
Abu Dhabi has made an incredible impact carving out its own unique niche that will attract a different type of traveller to that of Dubai. Abu Dhabi is extremely active in attracting events, concerts and exhibitions to the city. While it is not known as a tourist/leisure destination yet, there are plenty of opportunities for regional GCC, corporate, stopover and events business.
What is the average length of stay of the business and leisure tourists in your hotel? Are you looking to increase this?
Currently, the average length of stay for the business traveller is 1.8 days. With facilities such as a health club, spa, accessible shopping and tourist attractions, this could easily be extended, turning the business traveller into a leisure visitor.
Company's timeline
1985 The Copthorne Hotels brand is launched
1995 Copthorne Hotels sold to CDL for £219 million which led to the launch of the group's new global hotel brand, Millennium Hotels and Resorts
2002 Millennium & Copthorne Hotels (M&C) brand expands in the Middle East
2005 The first management agreement hotel opens in Egypt and contracts were signed to manage a new hotel development in Sharm Al Shaikh, Egypt
2011 M&C Mena will roll out its mid-market brand, Studio M, in the region
