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29 March 2024

InterCon to hire 33,000 in MEA over three years

John Bamsey COO for Middle East and Africa, InterContinental Hotels Group. (DENNIS B MALLARI)

Published
By Waheed Abbas

InterContinental Hotels Group (IHG) has signed deals for 46 new hotels in the Middle East and Africa (MEA) and 70 per cent of them are under construction with most of them coming on stream in 2011 and 2012. The group expects to hire about 33,000 people over the next three years in MEA to manage these hotels, John Bamsey, Chief Operating Officer for Middle East and Africa at IHG, told Emirates Business in an exclusive interview. He believes that the regional markets have started to show signs of stabilisation and the next journey of upside has begun. Below are excerpts from the interview:

 

How many new hotels will come under IHG management this year?

We should be close to 100 between November and February. We have signed deals for 46 hotels in MEA and out of that 70 per cent are under construction. Due to liquidity crunch, a lot of new hotel signings got cancelled in the Western world but in this region it is delays. So we are seeing a slippage of probably one year.

We will get to see more hotels opening in 2011 and 2012 as delayed hotels start opening. Within the UAE, IHG manages 16 hotels and another six are under development. We will be opening Express Hotel in this quarter near Dubai airport.

How much staff do you need to manage those new hotels?

As a simple formula, we probably got today more than 23,000 rooms and more than 30,000 staff – so it's almost one and a half person per room.

We are looking at about 33,000 people across the whole patch over the next three years as we open 46 new hotels.

How much does the Gulf contribute to the group's overall profitability?

We declare it as part of Europe Middle East and Africa (Emea) which was $127 million (Dh466.4m) last year. The market was down 13-14 per cent, according to STR Global. We were very strong in Saudi Arabia and Lebanon.

According to STR Global, Dubai was the toughest market last year, down by 30 per cent because it already had very high level before, it got more supply and also because it is more dependent on the Western economies which were in recession. When Western markets begin recovery, then Dubai 's demand will pick up. But whether it will go back to previous peak levels depends on how much new supply is coming in the market.

We always have this issue of a city going through shortage of supply and then excess of supply before there is a demand-supply equilibrium. This is the journey of hotel life which happens everywhere.

What is the occupancy rate at IHG?

We can give only industry figures quoted by STR Global. The region's average daily rate (ADR) declined 2.7 per cent and revenue per available room (RevPar) fell 13.3 per cent in 2009.

We are seeing a lot of markets get back to their stabilised numbers. They have started the next journey of upside. How much it will go up vary by market. So once the occupancy goes up, you can start to manage rates back-up. When the recovery begins, the first segments that will benefit will be financial district and beaches. The secondary locations are going to struggle.

What will be the major drivers of the industry?

We tend to look at the Middle East as a three distinct markets –the Gulf, Saudi Arabia and the Near East which is spread from Egypt through to Jordan to Lebanon. All the markets have a number of different drivers. If you look at Near East you have got antiquity, city centre and beaches with the Red Sea. Coming to Saudi Arabia, it is a big powerhouse of the region. Its heritage and culture are a big driver of economies in the region. We have more than 22 hotels in Saudi Arabia and another eight are under development. The Gulf has similar profiles in terms of demand drivers; the major change we have seen over the past 20 years is the Dubai model, which has changed the whole thinking in this part of the world. It has all the demand drivers such as leisure, financial centre and the exhibition halls. I have not seen such a city in the world which has strong marketing programmes and activities to drive the business.

How is the local hospitality industry coping with the slowdown?

We are seeing the worst crisis resulting in a decline in revenue but the fundamentals and market strengths are still there. Despite the tough time, we outperformed the market in all the regional markets.

Which segment – high, mid or low-end – will see higher growth here?

There are opportunities in each level; just make sure that you have a right brand at the right place.

Which market will be the fastest growing in the Gulf?

Saudi Arabia is still the strongest market. There is also shortage of rooms in Riyadh. There was a big impact on Makkah and Madina of H1N1 flu, but with the fear of that fading away, we'll a see big recovery during Ramadan and the Haj.

Is Abu Dhabi facing severe shortage of rooms?

In the UAE capital, there has been a room shortage up to the middle of last year, but it saw 47 per cent increase in room supply last year, and this year it is going to have same number.

 

 

PROFILE: John Bamsey COO for Middle East and Africa, InterContinental Hotels Group

 

Bamsey, a veteran of hospitality industry, runs a complete business unit responsible for 89 company-managed and franchised properties and five hotel brands. He was InterContinental Hotels Group Area President of Operations for Europe. He held a number of senior positions at Le Meridien, Eire (Forte Hotels) and Hilton International.

He also held chief executive officer's position at Salisburys (Signet Group).

Bamsey holds a BA (Hons) degree in geography and has also attended the Advanced Management Programme at Insead.