190311 Guy Hutchinson
Guy Hutchinson Image Credit: Supplied

Abu Dhabi: Rotana will open 13 new hotels in various markets across the globe to boost growth, its acting chief executive officer Guy Hutchinson said on Tuesday.

The new hotels will come up in the Middle East & North Africa (Mena) region, Africa and in Bosnia and Herzegovina.

“This year, we opened one hotel in Babylon in Baghdad. In the next 18 to 20 months, we will open another 13 hotels across the region including the UAE, Saudi Arabia and in Dar es Salaam in Africa,” said Guy Hutchinson while speaking to reporters during a media round-table in Abu Dhabi.

Rotana currently manages a portfolio of over 100 properties throughout the Middle East, Africa, eastern Europe, and Turkey.

Sounding bullish on Saudi Arabia, Hutchinson said it is a high potential market and Rotana will continue to focus on expanding their business.

“Saudi Arabia and the whole market [are] really underserved, with 65,000 rooms across the whole country [and] with 35,000 of those in Makkah alone. There is a lot of activity in Saudi Arabia and it is high focus market for us,” he said.

The comments come as Saudi Arabia opens its economy to attract more foreign direct investment to boost various sectors including tourism and entertainment as part of its Vision 2030.

Saudi Arabia is also planning to issue special event visas within 24 hours to increase visitor numbers to the country.

Currently, Rotana has three hotels in Riyadh and two in Jeddah. A third hotel is expected to open in Jeddah soon, with two more coming up in Eastern Province in Al Khobar and Dammam.

The Abu Dhabi-based hotel group is also planning new hotels in Syria and Iraq as part of the company’s regional expansion plans.

“We had an asset in Damascus till two years ago and before trouble began we had a lot of active projects in Damascus. We are again starting to see activity, shortly within next six to twelve months those are going to consolidate,” Hutchinson said.

In Iraq, Rotana opened a property in Arbil last year, taking the total number of their hotels to two in northern Iraq. It is also considering starting a hotel in Basra and other parts of the country.

Speaking on the financial performance of the company, Hutchinson said they are looking at the first best quarter in the financial year in the last four to five years, largely driven by the growth in Abu Dhabi.

“Abu Dhabi has had a tremendous first quarter with support from infrastructure and support from the government. Lot of events like Idex [the International Defence Exhibition], now special Olympics and Asian football cup in January did wonders for the industry,” he said.

During the January-February period, Rotana hotels in Abu Dhabi delivered stronger growth compared to properties in other emirates, recording a 3.5 per cent growth in occupancy, a 2.3 per cent increase in average daily rates (ADRs) and a 5.9 per cent rise in revenue per available room (RevPAR).

Properties in Beirut and Riyadh posted year-on-year increases of 17 per cent and 15 per cent in occupancy and 29 per cent and 48 per cent in RevPAR, respectively.

In 2018, the UAE, the United Kingdom, Saudi Arabia, Germany and India topped the list of the leading feeder markets.

On challenges facing the hospitality sector, Hutchinson said that GCC region is expected to see an additional 58,000 rooms entering the market in 2019, with destinations such as Dubai, Makkah, and Riyadh accounting for the highest increases in supply.

These new rooms will intensify competition, further pressuring room rates. As a result, Hutchison said hoteliers face a tough challenge in maintaining profit margins this year.