As the Middle East hotels notice a rise in their occupancy levels and expect the revenues to increase gradually, the service side of the industry continues to remain neglected, more or less, according to Samir Daqqaq, Senior Vice-President of the global hospitality company Oetker Hotel Collection (OHC).
How do you perceive the present situation in the Middle East hospitality sector, especially on the backdrop of the global downturn?
Hospitality in the Middle East has matured and almost all the major brands are present here. Brands from Europe, America and Asia are everywhere in the Middle East. Now all the brands want to grow their market in the region predominantly in the GCC.
In the year 2009, nobody was immune to what was happening globally. Situations were tough, especially for the luxury segment as the demand was not really there.
But things are now improving and you can see the indicators. You see occupancy coming back. The occupancy is higher than what was expected from the region some time back but on the flip side, the revenue per available room (RevPAR) is lower, much lower.
The average rate too has gone down. This is something that is a matter of concern but perhaps the present price level is what it is supposed to be. Earlier we were overpriced, where customers were willing to pay any rate that was demanded.
As far as revival is concerned, the situation is surely going to be better. If we can put it poetically, I would say, it is definitely going to rain but not pour.
The occupancy has increased but RevPAR has gone down, how are hoteliers tackling this situation?
Now, the demand is coming back but there would be lot of volume coming back too on the supply side. As mentioned earlier there is a pressure on RevPAR and now hoteliers will have to do much more of revenue management. I think the revenue management schemes and formulas are definitely going to be practised much more shrewdly now.
How do you rate the region's hospitality sector when compared with that in Europe or Asia?
We see hotels in the region in all shapes and sizes, and all major brands are present in the region. However, there is one aspect that is missing in the region. The service side of the business is missing. I do not think we have any service in this part of the world.
We have all the hardware and people spend a lot on that [hardware]. That is to make the hotel look beautiful with all the latest gadgets and expensive chandeliers. But many of these hotels do not bring services to the table. All the expensive stuff makes the hotel look opulent but the present day customer is not satisfied with just that.
The standard of living of today's customers has risen tremendously. The people already have those "things" at home. So when they leave their home for a hotel, they are aspiring to be pampered by service. I believe people need a luxury that whispers, and not screams, at them.
Why do you think the vacuum prevails in the services in the region's hospitality sector? Do you think this could be improved?
I think employers have ignored training of their employees. Training of employees is very important, but many people do not do it. I think the hospitality sector needs some kind of revolution as far as services are concerned. We should look into ways as to how we can improve service. When we look at Europe, the standards of luxury are much more superior.
Here if you go to any luxury hotel, you see that they have some 11 restaurants. Being in this industry for more than 30 years, I think the country's culture is very important for a hotel based in that country. Culture needs to be brought in the hospitality sector on a much larger level. The human element is by far the most important aspect in an industry such as hospitality.
I do not think we provide enough training to employees. Hotels put wrong people on wrong jobs. As a result, the employees are just working there because they want to draw their salaries at the end of the month. In the hospitality industry, the employees need to be passionate. If you do not want to serve people, you don't need to be there.
People somehow miss the point that profitability is in the hands of their staff. It is the staff that interacts with the customers that make all the difference. So if these people do not know how to address the need of the customers, they [customers] are not going to return to the same hotel.
Do you think the attrition level in the industry is high?
I strongly believe that if you do not play an employee well, he will always be on a lookout for another job. So as soon as he gets an offer that is even Dh100 more, the employee will quit. There should be a sense of loyalty in employees, and that does not come just by paying the employees. So as far as you do not pay the employee competitively, take care of his training and do a career planning with him, he is not going to be instrumental in the company's growth.
PROFILE:Samir Daqqaq Senior Vice-President, Oetker Hotel Collection
Known as a veteran and industry expert in the hospitality sector, Daqqaq was Vice-President with Marriott International's Middle East and Africa operations before his current position at the OHC.
Soon after his graduation from Cairo's Helwan University, Daqqaq joined Marriott in 1979 as an administrative assistant at Riyadh Marriott Hotel in Saudi Arabia.