Rotana records 30% drop in 2009 hotel revenues

The Abu Dhabi-based hospitality group, Rotana Hotels and Resorts recorded an annual RevPAR (revenue per available room) – an industry benchmark, decline of nearly 30 per cent in 2009, according to a senior company executive.

Omer Kaddouri, Rotana Hotels and Resorts' Senior Vice-President of UAE Operations, told Emirates Business: "Last year was a trying time for the entire hospitality industry, and we were not immune to this phenomenon. The Rotana group recorded a RevPAR decline between 25 per cent and 30 per cent by Q4 2009, when compared to the same period in 2008."

At yesterday's official opening of the world's tallest hotel, Rose Rayhaan by Rotana, Kaddouri also revealed the group's plans to open 10 hotel properties annually across the Middle East over the next couple of years.

He was, however, quick to add that the economic downturn had not delayed any of the group's hotel openings in 2009 or the ones scheduled to open this year, saying: "Aside from minimal delays caused by operational glitches, there was no major delay in any of our new projects. We are also going ahead with our plan to open 10 new properties across the region annually, over the next couple of years."

He added: "Currently, we have 70 hotels in total that are operational or have been signed on as confirmed projects. By 2015, we hope to take that figure to 100 hotels."

The group's target markets include Lebanon, Syria, Sudan and Iraq, along with emerging markets such as China and parts of Europe.

The launch of Rose Rayhaan is yet another brand addition to the Rotana bouquet of hotels on Dubai's Sheikh Zayed Road alone, taking the group's total number of rooms on the stretch to 1,344.

The $180 million (Dh660m) tower is an alcohol-free property, but is "not Shariah complaint", according to Kaddouri. He said: "Its current rating is four stars, and we plan to convert it into a five-star hotel over the next 12 months.

"We will operate 11 hotels in Dubai, with our first Centro hotel opening on March 1 in Barsha. This will be followed by an Arjaan branded hotel opening on April 1 at the Jumeirah Beach Residence."

Kaddouri further confirmed that Rotana will be opening yet another hotel next week in Abu Dhabi.

Talking about the UAE hospitality market being saturated with STR Global predicting 57,126 rooms in total active pipeline for the country, Kaddouri denied that supply was exceeding demand.

He said: "There is a lot of speculation that the market in Dubai is saturated, but our take is that because of increased competition, you just need to get more creative in your marketing plan."

However, when quizzed about comparisons between Dubai and Abu Dhabi, Kaddouri did admit that the hospitality market in the capital was not as saturated.

He also predicts the forecast for 2010 appeared positive for the hotel industry in the UAE, saying: "Last year's hotel prices had shot through the roof. With the downturn and the increase in supply of rooms, the room rates are more realistic. This in turn will have a positive impact on the country's tourism figures."

Room rates at Rose Rayhaan currently start at Dh400, but by mid-January, he believes the prices will go up as the Arab Health Forum begins, along with the Dubai Shopping Festival, which kicks off on January 28.

The hospitality group's long-term strategy is very bullish, said Kaddouri, adding that the group wants to be a pioneer in its home market in the budget, four-star and five-star hospitality market. Earlier in 2007, the group had also announced an initial public offering in three years, but Kaddouri said those plans had been put on the backburner for a while due to the financial crisis.

"We've had to revisit our IPO plans because of the economic downturn, and while a final decision has yet to be made, we do predict a listing to be announced in two to three years," he said.

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