Kempinski eyes key gateway cities in Mideast

Having won the management contract for the ultra-luxurious Emirates Palace in Abu Dhabi against tough competition, the Kempinski Hotels & Resorts is not going to rest on its laurels.

A number of luxury hotels and resorts in the Middle East are set join the Kempinski collection of prestigious properties in the near future, including some in the UAE. The group will soon sign its fourth management contract in the UAE and is on the lookout for more.

Regionally too, the company is bullish on pros-pects and is eyeing some top line properties.

Founded over 100 years ago, the Kempinski group is also the founding member of the Global Hotel Alliance together with the Pan-Pacific, Rydges and Wyndham Hotels and Resorts.

The alliance unites 235 upscale and luxury hotels and resorts worldwide in a shared marketing partnership.

With annual turnover topping $1 billion (Dh3.67 billion), the group has currently 70 hotels in its portfolio.

The Geneva-based Reto Wittwer, president and chief executive of the Kempinski group, was in Abu Dhabi for the Kempinski annual management and owners' meeting prior to the soft launch of the Emirates Palace.

He spoke to Gulf News in an exclusive interview.

Gulf News: What was the feeling after Kempinski won the deal to manage Emirates Palace?
Reto Wittwer: I did not realise the end product at that stage when it was still on paper because one did not visualise what it would be in reality. But I certainly realised the strategic importance and the desire of the government of Abu Dhabi to do something unique.

However, I do feel this palace is symbolic of what Abu Dhabi wants to be. It is the capital, the government seat where other government delegations come and you need to have adequate facilities of what the country wants to represent.

GN: What factors, according to you, went in Kempinski's favour when competition was so intense?
RW: Firstly, the Abu Dhabi Government knew us because we manage the Ciragan Palace in Istanbul which is owned by the Abu Dhabi Investment Authority (Adia). They know how we manage that and other palaces because we do a great job.

It is a multitude of factors really our flexibility, the rapport we had because of Istanbul, they knew us and they knew me. We know the business of luxury, we know the operations of palaces.

GN: You are well-positioned to comment on how Emirates Palace compares with Kempinski's other properties worldwide.
RW: It does not, because it is not comparable to anything. Our hotels are like the Faberge eggs, each one is jewel, a collector's item and each hotel is the best of its kind. We have not one hotel that is like the other and so we cannot compare.

We are a collection of jewels, so you cannot compare a diamond to an emerald or to rubies.

GN: Okay, what is your assessment of this unique jewel called Emirates Palace?
RW: From the purely structural side the concept is very well-designed. First, it is a palace with hotel facilities. So what is it meant to be? It has a ruler's suite that is accessible only in one way and does not disrupt the normal operations because it comes up at a higher level which is very smartly done.

Then you have the entrance at the palace that is self-contained with its magnificent dome. Then you have two wings that are basically the hotel wings.

From the architectural point of view it is very smartly designed. This palace has an arabesque design and belongs to this place and it will be here for many many years as a monument.

GN: With this the Kempinski will be managing three properties in the UAE. This market seems attractive?
RW: Yes, and we will soon be signing for the fourth, the Royal Falcon in Dubai, another spectacular property. We already manage the Ajman Kempenski and we will manage the Mall of the Emirates hotel too in Dubai.

This country is on the move because it has the financial resources to develop infrastructure. The Emirates Palace will be driven by protocol whether there is business or not because delegations and delegations will keep coming. So we are bullish about this market that is growing very fast.

GN: Kempinski operates in this region through management contracts, not equity partnerships. Would we see a change in policy?
RW: Basically there are two businesses here, one is to be the owner and the other the manager and I think there is a conflict of interest and in the past it has ruined some family-owned properties.

Originally we owned all properties but that changed. We are a hotel company first and foremost and very clearly a hotel management company.

GN: What is Kempinski's strategy for the Middle East in the next say five years?
RW: In this region we are in Kuwait, we have signed an MoU in Doha and would like to be in Bahrain. We would like to be in key gateway cities in the Middle East and also with some pioneering spirit in places like Yemen where no international company would like to go.

We are in Jordan, in Lebanon and have signed MoU's in Egypt.

I'd rather have hotels in growing markets. Beirut is booming and so is Jordan, Kuwait, the whole region is doing well. In this region there are plenty of cities where hotels are running 80 per cent occupancy levels and it is a good place to make money.

GN: Has the hospitality industry recovered fully since 2001, Sars etc?
RW: Our business is very cyclical and vulnerable. When you had the bombings in Istanbul our business there was wiped out.

When Sars happened our China hotels had zero occupancy. So we have to study whether it is a temporary problem or a permanent problem and find solutions accordingly.

The point is 9/11 has proven that one single incident can wipe out our business. So one lesson that all have learnt is that our businesses are vulnerable and in economic terms it means you must take precautions to protect your business, take measures to act quickly.

GN: Kempinsky is conspicuously absent in the US, Australia.
RW: We are not a mass consumer product. Anything linked to luxury has a certain degree of exclusivity. We don't want to be Mcdonalds in the hotels business. We will go where we think it is right for us, where we can add value.

The US is a uniform market, it is against our principle of each hotel being different, exclusive.