Cristal set to increase presence in GCC and Asia with 25 new hotels

Abu Dhabi's hospitality group, Cristal Hotels and Resorts, is planning to open 25 hotels over the next five years across the GCC and Asia. Among them will be a new three-star budget hotel concept that will target business travellers.

Developed by Seba Properties, the brand operates a four-star hotel in the capital's business district. It is set to expand into Saudi Arabia first with hotels opening in Riyadh, Jeddah and Mecca, followed by Qatar; projects in Asia will follow suit, according to the company's top executive.

"We have zeroed in these two regions because we believe the Middle East and Asia are the only markets that are still booming in these recessionary times," Peter Blackburn, CEO of Cristal Hotels & Resorts, told Emirates Business. "In comparison, the economies in Europe and North America have faced quite a beating. Plus the tax structure and the union struggles were a deterrent to expand in those regions presently."

Blackburn said it was still early to state the number of rooms opening in Saudi Arabia or the investment plan.

He said the average cost of the hotels is "approximately Dh750,000 per key".

Blackburn said the investment in the 192-room Abu Dhabi property was a little over Dh100 million.

Blackburn did not rule out expansion plans within the UAE for Cristal. However, he believes there is a glut of hotel rooms in the pipeline for 2010 in both Abu Dhabi and Dubai and the brand wants to take a more cautious approach "organically".

"Currently, Abu Dhabi has approximately 12,000 hotel rooms, with a further expansion of 4,000 rooms by 2010. We are still waiting on the ramifications of that before we plan our next move in the capital," said Blackburn.

"However, our strategy for Dubai is very different. There are already 60,000 rooms in the emirate, with another 7,000 in the pipeline. The last thing Dubai really needs is another hotel brand to enter the foray. There simply isn't any room for more rooms there."

According to data released by STR Global last month, the increase in supply saw hotels in Dubai experience the largest drop in average daily rate (ADR) in the Middle East and Africa, falling 8.3 per cent to $175.62 (Dh644). Abu Dhabi wasn't immune either, with the emirate experiencing the next largest decrease by 6.8 per cent to $200.50.

Blackburn said: "I believe Dubai's mistake was its focus on luxury five-star properties. In this race, they forgot to target the budget-minded business traveller. Agreed there are budget hotels such as Ibis, Rotana and Premier Inn already in the market, but there is potential growth in this sector and our plans for a three-star budget model would be ideal for Dubai."

No immediate plans for the budget hotel were forthcoming, but Blackburn stated the guest occupancy ratio would be similar to what their current property is experiencing with 50 per cent of guests being GCC Arab business travellers, with other key regions being the United Kingdom, Germany and Singapore. The hotel brand is confident to stand its ground in comparison to other local hotel brands, including Rotana, Coral and the Jumeirah Group, citing "100 per cent occupancy" for most months since its official opening in April.

"While we cannot peg ourselves as the next Jumeirah Group, considering their marketing strategy is to build iconic luxury properties, we do want to follow their growth strategy by expanding into different territories.

"Competition for us can be the Rotana Group but Cristal's four-star plus luxury brand gives us the edge," said Blackburn.

OTHER HOMEGROWN BRANDS

- Jumeirah Group: Founded in 1997, Jumeirah Hotels and Resorts has built a world-class brand of luxury properties including the Burj Al Arab, Jumeriah Lowndes Hotel London and Jumeirah Essex House in New York

- Rotana Hotels: Founded in 1992, the company opened its first two properties in 1993 and by 2012, its portfolio will include 67 hotels and resorts across the Middle East and North Africa 

- Coral Hotels and Resorts: A member of Hospitality Management Holdings in Dubai, the Coral chain of hotels and resorts comprises four distinct hotel brands, namely Coral Hotels and Resorts, Corp Executive Hotels, ECOS Hotels and EWA Hotel Apartments 

- Yas Hotel: The latest addition to the homegrown hotel brands is Yas Hotel, built by Aldar Properties in Abu Dhabi. The five-star hotel opened its doors during the capital's F1 Grand Prix event earlier this month on Yas Island

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