Dubai : Starwood Capital subsidiaries Louvre Hotels and Golden Tulip Hospitality Group will add 60 hotels with Louvre and Golden Tulip brands in the Middle East in the next five years, to their current portfolio of 40, a top official said.
"In effect, we will add 10 hotels per year, for the next five years to take the total number of hotels to 100 in the region," Pierre-Frederic Roulot, President of Golden Tulip Hospitality Group and Louvre Hotels, told Gulf News in a recent interview.
"We are aiming at putting at least 10,000 rooms by 2014 with each hotel having on an average 100 rooms."
With a cost of $40,000 (Dh146,800) to $50,000 per room, the development of 60 new hotels or 6,000 rooms could cost developers between $240 million and $300 million.
Starwood Capital, which acquired Louvre Hotels for $3.2 billion in 2005, also purchased Golden Tulip earlier this year.
The merged entity now operates 1,150 hotels comprising 100,000 rooms managed by 40,000 people in 50 countries -- making it the world's 8th largest hospitality group.
Golden Tulip, with its head office in Lausanne, Switzerland, is a worldwide hospitality company with more than 260 hotels and 26,000 rooms in more than 45 countries.
Although Golden Tulip has a strong footprint in the Middle East, the latest consolidation among Europe's two major hotel groups will see Louvre Hotels introduce its flagship brands -- Kyriad, Campanile, Kyriad Prestige and Premiere Classe to the region in the next few years.
"We are aiming to open the first Louvre hotel in the UAE by early next year," Roulot said.
Expansion
The expansion move comes despite the current economic situation that has heavily impacted travel and tourism. According to the United Nations World Tourism Organisation, the number of tourists this year could decline to 600 million from 643 million last year.
"With the economic crisis, the demand for budget hotels remained steady and most of our brands belong from 1 to 3- star ratings," he said.
"We feel there are too many luxury properties in the region and that segment has a good supply line. However, there is a shortage in the budget hotel category.
"Global travel pattern has changed from luxury to budget. Subsequently this has impacted the aviation and hotels sectors."
The development of low-cost aviation and the expansion of budget hotel/accommodation speak a lot about this shift, he said.
"We see this segment growing stronger in coming days as travel budget gets tighter," he added.
The UAE's budget hotel segment has historically been dominated by small-time local hotel operators, who have been serving the traders and merchants' accommodation needs in downtown Deira and Bur Dubai -- once Dubai's main trade hub for electronics, spice and bullion. These are unbranded hotels -- not part of any particular chain. They evolved with the growth in the merchant trade sector in Dubai.
However, branded budget hotels have started to penetrate the market lately.
Currently, Express by Holiday Inn, Ibis and a string of unbranded hotels are serving the budget hotel category in the UAE. Britain's Premier Inn, easyhotel has just started operations while others are closely looking at entering the market.
"We are aiming at becoming leaders in budget hotels," Roulot said. "Budget means very innovative -- offering 80 per cent of the luxury elements for 20 per cent price."
However, with Golden Tulip, the group offers services even in the business and luxury segment as well.
"Between Louvre and Golden Tulip, we have seven brands covering almost all the hotel accommodation segments," Amine Moukarzel, Senior Vice President and Managing Director of Golden Tulip, said.
"The brands belonging to the group are complimentary. Both Louvre and Golden Tulip create a synergy that will help us expand across the globe rapidly.
"However, the Middle East is one of the most important regions for us where we see a strong growth potential."
Louvre Hotels
Louvre Hotels is one of the pioneers of franchised hotels and has long experience, built over 150 years through its parent company Société du Louvre, in the hospitality business and franchise development.
Louvre Hotels dates back to 1855 when the Grand Hôtel du Louvre opened in Paris. In 1879 the owners of the next door clothing store, Les Galeries du Louvre, bought the hotel, expanded the store and moved the hotel operation to where the luxury Hôtel du Louvre stands today.
In 1889 the company opened a second hotel and adopted the name Société du Louvre. Twenty years later, the most famous Concorde property, the Hôtel de Crillon, opened after refurbishment. By 1930 the company was listed on the Paris Stock Exchange.
In 1970 the luxury hotel portfolio was grouped under the Concorde name and six years later Société du Louvre acquired its first budget hotel chain, Campanile. Campanile forms the basis of Louvre Hotels budget hotel offering. It is arguably Europe's best-known hotel brand, benefiting from a 30 year history, and was joined by Première Classe in 1989 and the brand offer completed by the creation in 2000 of the Kyriad and Kyriad Prestige brands.
Historical perspective
Louvre Hotels is one of the pioneers of franchised hotels and has a long experience, built over 150 years through its parent company Société du Louvre, in the hospitality business and franchise development.
Louvre Hotels dates back to 1855 when the Grand Hôtel du Louvre opened in Paris. In 1879 the owners of the next door clothing store, Les Galeries du Louvre, bought the hotel, expanded the store and moved the hotel operation to where the luxury Hôtel du Louvre stands today.
In 1889 the company opened a second hotel and adopted the name Société du Louvre. Twenty years later, the most famous Concorde property, the Hôtel de Crillon, opened after refurbishment. By 1930 the company was listed on the Paris Stock Exchange.
In 1970 the luxury hotel portfolio was grouped under the Concorde name and six years later Société du Louvre acquired its first budget hotel chain, Campanile. Campanile forms the basis of Louvre Hotels budget hotel offering.
By Saifur Rahman
© Gulf News 2009
