Fairmont to run 14 new properties in Middle East
Fairmont Raffles Hotels International is looking to operate 14 new properties, across three brands, in the Middle East by 2014. These include the signature Fairmont brand, along with luxury properties Raffles and Swissôtel.
The group, which is bullish on the Middle East, will add three new properties to its UAE portfolio, including the Fairmont Fujairah (opening 2011), the Fairmont Palm Jumeirah hotel (no confirmed date) and a new project in Abu Dhabi Marina City, which is still in the design phase.
While the UAE continues to be an important destination for Fairmont, it will shift investment focus to new feeder markets in the region, with Saudi Arabia leading the way with a $3 billion (Dh11bn) Makkah Complex three-hotel project, followed by five to six new properties across Jeddah, Riyadh and the Eastern Province, according to a senior company executive.
"We are quite bullish on investing in the Middle East and our long-term focus includes developing new gateway cities in the region," Kent Cooper, Vice-President, Regional Hotel Sales MEA, Fairmont, told Emirates Business. "Saudi Arabia is leading in our expansion plans, but we also have teams scouting in Qatar, Kuwait, Bahrain and Oman."
The sovereign connection
Projects in Saudi Arabia and Qatar seem the obvious choice considering the Fairmont group is co-owned by billionaire Saudi Prince Alwaleed bin Talal's Kingdom Hotels and the Los Angeles based Colony Capital.
Last week, news also broke about Qatar's sovereign wealth fund, Qatari Diar, paying $847 million for a stake in hotelier Fairmont Raffles from Kingdom Holding, becoming the biggest shareholder in the group.
"Saudi Arabia is a huge market by its sheer volume and is the main demand driver in the region," said Mohammed Arkobi, Vice-President and General Manager of the Makkah Clock Royal Tower hotel.
The Makkah hotel, combined with a Raffles and a Swissôtel property, will add more than 2,600 new rooms to the holy city. The project is owned by the Saudi Government and is being developed by the Bin Laden Group.
"The Royal Tower, which should be operational by Q4 2010, will be the tallest concrete structure in the world, at 662 metres. Added to that will be a steel structure that would take its height to 817m," said Arkobi.
"The hotel's iconic feature would be the clock, bigger than even London's Big Ben, and will be visible across 17 kilometers."
At full height, the structure would be a close competitor to the Burj Khalifa, which stands at 828m.
Arkobi confirmed that a similar project was also on the cards for Medina, but he could not comment if the Fairmont group would be associated with the project.
Earlier this month, the Saudi Commission for Tourism and Antiquities (SCTA) announced that the kingdom's tourism sector generated revenue of SR70bn (Dh69) in 2009 and had contributed to 6.5 per cent of the country's GDP.
Saudi is attributing this growth to the large influx of religious tourists, which is the main driver behind the $3bn investment in the three-hotel Fairmont Makkah project.
"By 2015, approximately 10 million tourists annually will make their way to Makkah and we are expecting 85 per cent average occupancy across our three brands in the holy city, with 100 per cent occupancy during Hajj and Umrah," stated Arkobi.
With the post-recession blues still plaguing the hospitality industry at large, it may appear a hard task to fill the hotel rooms planned across the Middle East for the Fairmont group, but Cooper seemed unconcerned. "The markets are still robust, with the number of visitors travelling to the UAE still retaining a healthy balance," he said.
"Last year, visitors to Dubai dropped by only one per cent, while this year Abu Dhabi is recording an increase by two to three per cent.
"What has caused the grief is the increase in room supply because the number of hotel openings is still largely unaffected. If we are witnessing an occupancy drop, then it has largely to do with the customers being spread out over a wider based."
Cooper confirmed that the decline in revenue per available room or the RevPAR for the first quarter of 2010 recorded only a five per cent change from the same period last year. He added: "Plus, the occupancy levels have increased for the same period."
Uncertainty still clouds the launch year for the much-delayed Fairmont The Palm Jumeirah project. When quizzed, Kent Cooper, Vice- President, Regional Hotel Sales MEA, Fairmont, said: "The work is still on, but there are a few design changes that are being conducted. I am not sure when the final project will be complete."
Earlier, Patrick Smith, VP Development, IFA Hotels & Resorts had told this newspaper that the hotel would open during the first quarter of 2011.
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