The Morocco-Kuwaiti business group CMKD is seeking to gain more share of the hospitality market focusing on business travelers. The company is investing MAD 300 million to renovate five hotels owned by its Farah chain, with the hotels located in Casablanca, Rabat, Marrakech, Khouribga, and Safi. The most important hotels for the chain are the Casablanca and Rabat sites, in which 62% of their customers are business travelers. In Casablanca, the company claims it has 27% share of the business travel market among the hotels with the same category classification.
But the company is also investing in less known hotels in less traveled regions. In Safi, it is spending MAD 40 million to renovate its local Farah hotel, formerly known as Safir. There, CMKD is seeking to consolidate its business travel market position but also better target domestic travelers. It is also more than doubling its sales agencies to seven points of sale. The company is also investing on personnel training to accelerate the adoption of international hospitality norms in this chain.
CMKD has been operating in Morocco for the past 28 years. In addition to its Farah hotel chain, it is involved in real estate development in Morocco with the ongoing construction of the Diar 5 and Diar 6 housing complexes.
While CMKD is working to improve its hospitality infrastructure to host more business travelers, it is likely going to face a serious challenge to reach its goals as the actual business travel sector has been rather sluggish and is facing difficulties recovering. The business of organizing congresses, conventions and conferences, which is the main driver of the business travel industry in Morocco has not followed the growth of the other segments of the travel industry.
Indeed, while the numbers in leisure travel this year have been on the rise, players in the business travel sector are getting mix signals as to the state of their industry, with more negative assessment than positive. The positive assessments came from the fact that the business travel sector was somewhat saved this year by one or two scheduled conference events that took place in the city of Marrakech. Although Morocco has always been an important destination for convention organizers thanks to its tourist attractions, other countries in Southern Europe, mainly Spain, Greece, and Italy have stepped up competitive pressure and are undermining the growth of the business travel industry in Morocco.
Despite growing competition from neighboring countries, bookings for 2005 look rather healthy and are creating a sense of optimism in the industry in Morocco. The primary driver to this potential positive outlook is the downward revision in prices that many major hotels have pledged implement going forward. But there are hotels that are resisting the move, arguing that lower prices are likely to lead to a negative perception on the Morocco destination, eventually making it less attractive and credible. A luxury hotel official says that "when 5-star hotels offer 4-star pricing, it creates a great deal of confusion among guests and customers, and we are already seeing that." Others who are resisting the call for price reductions say that "instead of copying each other strategies in terms of lowering our prices, we should look at what our competitors abroad are doing. They (our competitors) have done a good job diversifying their services and renewing their offers, instead of cutting their prices of their existing services." And he adds "we have no imagination and we should understand that if the same seminar is held twice in the same region, you can be guaranteed that the same attendees will be reluctant to use the same tourist circuit they've used the previous event. And that's not a joyful prospect." Echoing this view was the widespread agreement among the specialists present in the international travel conference held in Deauville, France last week, who emphasized the lack of divers activities that returning business travelers could buy.
But while the debate has largely focused on diversification of offerings and services, many experts point to Morocco's lack of lodging and infrastructure that are fit to address large group gatherings outside of the hotel that is hosting the event. This is also the case of Marrakech, which hosted the bulk of the conventions and business meetings, but it is more apparent in other emerging regions such as Agadir and Fes where there are limited sites, such as restaurants, that can accommodate 200 attendees.
© The North Africa Journal 2004
