Starwood's summer of 2103 in Dubai prepared it well to tackle the region smarter in 2014.
Starwood senior VP, Guido de Wilde talks trends, pipeline properties, F&B and recruitment plans for the year ahead.
Hotelier Middle East: Which hotels do you expect to open in the Middle East in 2014?
Guido de Wilde: We have an extremely exciting line-up of hotels opening over the next year. Following the official opening of The St, Regis Abu Dhabi in August, we plan to open a further 9 new hotels and nearly 3,000 rooms across the Middle East by the end of 2014:
Starwood will make its debut in the emirate of Ajman (UAE) in 2014 with the opening of Ajman Saray, A Luxury Collection Resort. The property will be the company’s 22nd hotel in the UAE.
This year we will expand our presence in the Holy City of Medina with Sheraton Medina and Four Points by Sheraton Medina.
Starwood will open its newest addition to the Sheraton family in Dubai, the 660-room Sheraton Dubai Tower Sheikh Zayed Road.
Grand Hills, A Luxury Collection Resort, is currently undergoing extensive renovations and is due to reopen next year. This was a conversion we signed earlier this year.
The Aloft brand will make its debut in Saudi Arabia next year with the 238-room Aloft Riyadh
Continuing our first move-advantage with the Sheraton brand, next year we will open our first properties in Iraq (Sheraton Dohuk), Tajikistan (Sheraton Dushanbe) and Kazakhstan (Sheraton Aktobe).
Along with new openings, we are undergoing renovations in nearly 25% of our properties in the region, mainly across the Sheraton and Le Meridien brands.
Starwood will also be adding another 200 rooms to the Le Méridien Dubai Hotel & Conference Centre by Q2 2014 and 238 rooms to Four Points by Sheraton Kuwait. These extensions are equivalent of opening a new hotel.
HME: To meet the needs of your upcoming pipeline, how many staff will you be looking to recruit in 2014?
de Wilde: With nine new hotels and nearly 3,000 rooms across the Middle East by the end of 2014, we will be looking to recruit thousands of new associates (Starwood term for employees). I am proud to say that we currently have associates from 100 different nationalities in the Middle East and we will be looking to build on this diversity with our new openings.
HME: The rejuvenation of hotel F&B has been a hot topic in 2013, with some hotels restructuring F&B management, hiring at the corporate level, etc. What is your approach to reinvigorating F&B in 2014?
de Wilde: Food and beverage is a key growth area across all of our properties in the Middle East and drives up to 50% of the revenue for many of our hotels.
We have a dedicated Food and Beverage team in our division and a Middle East Food and Beverage Council consisting of a F&B executives from across the region to help drive this area of our business forwards. We also have talented teams on property and with an operation of 277 restaurant and bars in the region we have a vast experience in this growing part of our business. Our priority looking ahead is to create a synergy across the Starwood food and beverage offerings in the region. This will be primarily through sharing best practices, expanding the team and skill set of our food and beverage associates, embracing new technology that helps increase staff efficiency, buying power and improving the overall experience for our guests.
We aim to continually bring cutting edge culinary experiences, introduce new concepts to our Middle East guests and deliver the highest quality cuisine with outstanding service across all our hotels in the region.
HME: What are the key travel trends you are seeing emerge?
de Wilde: Digital innovation is Starwood’s next big bet. We want to deliver a personalised experience for our guests and digital innovation is important for us to deliver that level of service. Digital innovation allows us to better connect with guests and customers and deliver more personalized service in our hotels. As of June 2013, 42% of our site visits are through mobile, up from 16% just two years ago. By 2015, we expect interaction with our guests via mobile to surpass that via desktop. There are now more bookings through our digital channels than through any other non-property direct channel.
Looking ahead we are focused on leveraging technology on-property – mobile and emerging tech will impact virtually every aspect of our business, from the guest experience to the way we operate our hotels and communicate with our associates.
Thanks to globalization there are more “mega travellers” than ever before. Mega travellers spend 50-100 days a year in hotels and their spending has tripled in the last five years. This is a group of travellers that is set to increase even faster in the next 20 years than in the last two decades.
While we see an increase in mega travellers, we are also seeing the growth of the global middle class, which will have a major impact on the hospitality business. As wealth rises around the globe, so does an appetite and desire for luxury in all corners of the word. Emerging economies continue to drive the global tourism spending and deliver new global travellers. In our business SPG membership in emerging markets has grown by 400% since 2008. Today China is our fastest growing travel market, followed by India, the UAE and Brazil.
HME: With smartphones and tablets becoming key customer service tools, what mobile services are you providing for guests?
de Wilde: Starwood was the first in the industry to launch unedited ratings and reviews, the first to leverage state-aware technology on our mobile applications, the first to build an iPad App on Apple’s new iOS7 and will soon be the first to launch SMS capabilities – all within the last 12 months.
In the hospitality business, smartphones and tablets are on track to capture nearly one in five online dollars by 2014.Our mobile bookings are growing five times faster than Web bookings did
10 years ago, and revenue from Web bookings is up 1,000% YOY. We will continue to accelerate mobile innovation so we can connect with guests via mobile at every touch point, before, after and during their stay.
HME: Where in the GCC do you see scope for diversification of the market and how are you targeting price-conscious customers?
de Wilde: We are looking to strengthen our existing portfolio in established markets across the GCC. The UAE continues to be our largest market in the Middle East where we at present have 22 hotels and over 6,000 rooms. We operate 14 hotels in Dubai alone, which represents the largest concentration of Starwood hotels anywhere in the world except New York.
With more than 70% of the world’s economic growth coming from fast-growing markets over the next few years, Starwood is focused on further expansion in markets such as the UAE, Saudi Arabia and Qatar as well as key emerging markets including Iraq, Pakistan and Central Asia.
Starwood is setting its sights on expanding its mid-market brands in secondary and tertiary markets around the region where there are great opportunities to grow reliable and affordable hospitality.
We recently announced the signings of Aloft Erbil and Aloft Sharjah, both of which will open in 2015 and mark the debut of the brand in Iraq and Sharjah. We will also open an Aloft hotel in Saudi Arabia in 2014 with Aloft Riyadh. Four Points by Sheraton made its debut in KSA this year with the opening of Four Points by Sheraton Riyadh Khaldia in May, followed by the upcoming opening of Four Points by Sheraton Medina in 2014 and the extension of the Four Points by Sheraton Kuwait with 238 rooms. Our mid-market brands currently represent 30% of our development pipeline in the Middle East.
HME: What do you think are the main challenges hotel GM’s will face in 2014?
de Wilde: Approximately 12% of our workforce is local nationals and this presents us with a huge opportunity. Moving forward, our employment focus will be to take a leading role in hiring local nationals in our hotels. We are already leading the way in Saudi Arabia where 25% of our workforce are Saudis. We are also working hard on having Emiratis and Qataris working in our hotels.
HME: What is your vision for 2014?
de Wilde: Starwood is strengthening its position in the Middle East as the leading hotel operator and we remain focused on growing our distinctive brands across the region. We will continue working with the right partners in the right places on the right properties to provide guests with a great product and world-class service standards. As a company, building loyalty is a priority and we look forwarding to building and creating relationships with existing and new guests. We are also in the business of building talent, so we continue to provide our associates the opportunity to grow in their roles
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