Doors wide open
Elie Milky, vice president - Business Development, Radisson Hotel Group, Middle East, Cyprus, Greece and Pakistan, charts the expansion plans for the group within the region
Give us an overview of Radisson’s development plans within the Middle East? The UAE and Saudi Arabia remain to be key development areas as we continue to grow our portfolio in relevant locations within those mega markets. Dubai and Abu Dhabi lead the investment and branding activities in the UAE, while Saudi Arabia thrives with opportunities in Riyadh, Jeddah, the holy cities of Maakah and Madinah, and its giga-developments. The recent launch of the Saudi Tourism Development fund, unlocking $43bn in financing support for tourism projects across the kingdom, will be a catalyst for further growth in the country. Is the region oversupplied and is there still scope for new hotels to open?
We need to remember that the Middle East is an emerging market. Whilst there are markets such as the UAE, which are heading up the development, there are also many sub areas which are only starting. Looking at the UAE, there is still an under-supply for more affordable resorts or budget hotels, as well as branded serviced apartments. But if we compare Dubai to Saudi Arabia, the entire market of Saudi Arabia has fewer rooms than Dubai alone. Qatar, for example, still lacks supply in more affordable branded supply and the list continues. What is the new Radisson Individuals brand all about?
Radisson Individuals is our response to a market that is becoming relatively mature and as a conversion solution for unique, independent hotels and serviced apartments looking to benefit from a brand affiliation. It is also for owners looking to brand their properties under one of our core brands, where they could benefit from our affiliation while they undergo a renovation. We continue to work towards becoming more relevant to changing owner needs and to remaining one of the best conversion-friendly partners in the industry. How severely has the pandemic affected Radisson’s business?
The pandemic propelled parties into unprecedented dialogue with owners as the market struggled to react to airport closures, quarantines and lockdowns. We tried to tackle cash flow issues, conduct stringent cost exercises and launch hygiene initiatives. For us at Radisson Hotel Group, our focus remains on adjusting our short- and long-term plans to cope with the rapid changes. With that one of our highest priorities will remain to be the continued health, safety, and security of our guests, team members and business partners, and ensuring that the recently launched Radisson Hotels Safety Protocol is implemented across all our hotels. Should investors continue actively looking at the hospitality industry?
I believe in hospitality real estate. It’s a unique asset class that can be dissected into different types of investment models for investors to choose from. Investing in a luxury hotel in Dubai or in Doha or even in Muscat, for instance, may be risky due to oversupply within that category. Investors should be able to identify gaps within the hospitality investment landscape such as affordable lifestyle hotels in most markets of the region, a scale of budget and midscale hotels across major cities, affordable beach resorts in saturated markets, branded serviced apartments in most countries, and the list goes on. What are some of the plans you have for 2021? Will you focus more on serviced apartments as compared to hotels this year?
Serviced apartments remain at the heart of our expansion drive, not only in the Middle East, but across EMEA. That’s our group strategy since we recently launched and formalised this proposition for our investors, a product we have had in our portfolio for 20 years. Our competitive value proposition, which offers an attractive development cost, real estate efficiency, state-of-the-art design, strategic positioning, and high profitability margins, is already starting to gain interest from investors in the market. This, along with resorts and conversion/branding opportunities, leads our development drive for 2021 and beyond.