Hotels in the Middle East are renovating just to stay relevant

As rooms supply continues to grow in key Middle Eastern cities, older properties are being forced to totally transform their product offering to keep up with their new neighbours.

In 2012, 68 new hotels comprising 15,735 rooms opened across the Middle East and Africa, according to latest statistics released by STR Global.

Top-end hotels again dominated the new-builds in the region’s tourism sector while economy hotels contributed only two properties, the report figures showed.

Meanwhile, dozens of existing properties embarked on major renovations, as predicted by Christie + Co’s International Business Outlook, which said: “Older properties across the Gulf countries will see a number of closures and major renovations to keep pace with the quality of new supply”.

A year of renovations

Major renovations started and completed in 2012 included the Copthorne Dubai hotel which completed the upgrading of its guest rooms, pool, gymnasium, restaurant and technology components in December.

Just a couple of months earlier, in October, Holiday Inn Dubai – Al Barsha revealed plans to add new executive rooms, upgrade technology, augment amenities and start the refurbishment of its atrium and restaurants in 2013.

General manager JS Anand said the Dubai hotel has reported positive results in 2012, but aimed to raise its game to keep up with the increasingly competitive market.

“New hotels will definitely impact on existing players in the market, certainly towards the end of 2013, but we believe that the Dubai Department of Tourism & Commerce Marketing is doing a tremendous job in its branding strategies for the city and reaching into new markets,” Anand said.

Just around the corner, an ongoing renovation at Kempinski Hotel Mall of the Emirates in Dubai was intended to keep the hotel “competing at the highest level”, according to Salman A. Haider, senior vice president for mixed-use, MAF Properties — the hotel’s owner.

“We’re expecting to spend a significant amount of money on doing a renovation of the Mall of Emirates Kempinski,” said Haider.

“The owner of my company is not shy in investing in these assets because our owner is interested in making sure that we are the best in the market, that we are competing at the highest level, that this hotel will be updated, will be renovated a lot quicker than hotels with 10-, nine-, eight-year cycles — we’re starting in five years so we’re pretty aggressive.

“We do not want our hotels at the top which are performing to go down so we are coming in and very aggressively making sure we are creating a new lifecycle growth cure and not just coming down on a typical bell curve,” Haider added.

Other renovations underway in 2012 included Pullman Deira City Centre, the Sheraton Doha, the Crowne Plaza Dubai Deira, Boutique 7 in Dubai, Le Meridien Al Aqah, The Nile Ritz-Carlton in Cairo, Le Meridien Dubai, Al Faisaliah Hotel, Riyadh and Sheraton Cairo.

New year, new look

The large number of renovations in the region looks set to continue into 2013, as does the high number of hotels coming online.

The Middle East and Africa hotel development pipeline comprises 478 hotels totalling 119,233 rooms, according to the December 2012 STR Global Construction Pipeline Report.

Just last month, Donatello Hotel Apartments, Dubai formerly the Hospitality Management Holdings-run Coral Boutique Hotel Apartments, reopened following the renovation of its 78 suites and the addition of a bar.

A further US $5 million worth of works are scheduled for the summer to revamp public areas, including the addition of new restaurants and meeting spaces: “The re-branding and upgrading of the product will enhance our representation”, said general manager Salim Touma.

In the same month, Jumeirah appointed designer Anouska Hempel to spearhead the renovation of the 120-year-old Pera Palace Hotel in Istanbul, Turkey.

The renowned hotelier and interior designer has been tasked with creating new concepts for the public areas and two presidential suites of the luxury museum hotel dating back to 1892. The property was previously refurbished and relaunched by Jumeirah just three years ago.

Scheduled for completion by mid-2013, the latest upgrades will aim to “enhance the hotel’s status among the luxurious grand hotels of the world”.

In Bahrain, where operators such as Best Western, IHG and Marriott have continued to open hotels over the past 12 months in spite of ongoing unrest, struggling existing operators are hoping to boost occupancy and profits by revamping their properties.

Last month, the Al Safir Hotel and Towers, one of Bahrain’s largest four-star properties, reopened after a massive $5.2 million renovation, according to reports.

All 120 rooms at the Juffair-based hotel, which opened in March 2010, were overhauled.

“They all have a new international design to cater to people of all tastes, cultures and backgrounds. We are sure we can turn the page on the unsettled conditions in the last few years and look forward to a brighter and more profitable 2013,” the hotel’s managing director and board member Hameed Al Halwachi said.

Meanwhile another four-star hotel in Bahrain, the Gulf Gate Hotel, recently relaunched following a renovation also costing $5.2 million, according to reports.

Plans have also been announced to upgrade the Bahrain International Hotel and the Tolos Hotel, both located in Manama.

Yet another hotel to relaunch in January following a major revamp was the Le Meridien Mina Seyahi in Dubai. The 11-month renovation was designed to “refine” the product.

Furthermore, Golden Tulip Middle East and North Africa (MENA) president Amine E. Moukarzel said a number of the group’s properties were undergoing renovations, including several hotels in Oman, Bahrain and Lebanon.

However, he warned that it is crucial for large operators to approach renovations strategically as part of a much wider objective of maintaining high brand values.

“Golden Tulip has a continuous programme of renovation to maintain our brand promise,” he concluded.

The story in short

Last year saw a large number of hotels opening across the Middle East and Africa, with an equally high number of existing hotels announcing major renovation projects.

According to the operators involved in these renovations, staying relevant is the goal as new, younger models pop up luring guests with modern décor and new technologies.

Luckily, owners have also recognised the importance of renovating to remain competitive and appear to be funding the upgrades.

However, as Golden Tulip’s MENA president points out, renovating a hotel is not always a quick fix in a difficult market, and such projects should be part of a continuous programme to maintain brand values.

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