60 SECONDS WITH ELIE MILKY, VP, BUSINESS DEVELOPMENT, RADISSON HOTEL GROUP

With plans to reach 100 hotels and 20,000 rooms in operation across the region by 2020, HN asked Elie Milky, vice president business development for Radisson Hotel Group about the brand’s upcoming development plans and growth strategies.

How are you accommodating market volatility and challenges?

The region poses various challenges that vary from market to market. The growing quota for local nationals, for instance, to be employed in the hospitality industry in places such as Saudi Arabia and, for a while, in Oman, has led to increasing operating costs and has put a strain on operating profit margins. Along with rising energy costs in most markets and high housing allowances in some expat locations like the UAE, the company is now moving into a more efficient operating staffing model to improve operating margins. Clustering of positions and outsourcing of additional outlets are becoming more common, while we continue to develop more efficient hotel assets. The embargo on Qatar has led all hotels to take advantage of visa-free travel to the country, as operators in the country try to source new markets. Beirut hotels are moving to tap into new markets away from their dependence on the GCC, a source market that has substantially reduced its travel to Lebanon in recent years.

Tell us more about your plans for expansion in Lebanon

Although a relatively small market facing political instability, Lebanon offers unique investment opportunities in establishing new hotel concepts that would cater to various untapped segments. We believe Beirut will continue to be the main market for strategic hotel expansion for Radisson Hotel Group, with locations outside the city remaining secondary for the time being. Branded hotel supply in the country remains limited and the capital currently lacks sufficient hotel supply, specifically in the midscale and lifestyle segments. Our midscale Park Inn by Radisson brand is well suited towards secondary locations within the city, should it be deemed feasible, given the high cost of land. And most importantly, in a bid to re-establish itself as the cultural and lifestyle capital of the Middle East, Beirut offers a strategic opportunity for our lifestyle Radisson RED brand in the heart of the city. As we also focus on Radisson Collection, what we consider to be our affordable luxury brand, I should also note that our expansion looks at the possibility of either a new-build opportunity or a conversion of an existing hotel, all under international management agreements, as we partner with investors/developers. In summary, if Lebanon is to cater to growing corporate, meetings and events, and leisure demand from Europe and elsewhere as it shifts from its historic dependence on the GCC market, Beirut, it would be fair to note, currently does not have enough branded hotel supply, nor does it have the infrastructure and sufficient facilities to cater to such potential demand growth. The country is, however, expected to benefit from offshore oil exploration, as well as the reconstruction of Syria, in addition to its current offering across the country, and this is where we see the opportunity.