GMR spoke to Elaine Nettleton, director of communications, M?venpick Hotel & Resorts about its expansion plans for the region.
How does Movenpick define the Middle East?
Following rapid growth of Movenpick Hotels & Resorts' in the region and a resulting strategic realignment of the company's operational areas, we have now segregated the region into two areas: the Middle East which includes the GCC, Lebanon, Yemen, Palestine and Jordan; and Africa which currently includes Egypt with its 13 properties, Morocco, Mauritius, Tanzania and Tunisia.
The Africa region is led by Josef Kufer and has its regional office based in Cairo while the Middle East regional office headed by hotel veteran Andreas Mattmuller is located in Dubai Media City.
How many properties do you have in the region?
We currently operate 30 hotels and three cruises with a total of 8667 rooms in the Middle East and Africa and are set to extend our portfolio to include 100 hotels by 2010.
Expansion plans?
The following properties are all scheduled to open within the next two years:
Movenpick Resort & Residence Al Bidaa Kuwait - May 2007
Movenpick Hotel Al Khobar - August 2007
Movenpick Hotel Deira - February 2008
M?venpick Resort & Spa Palm Jumeirah - June 2008
M?venpick Resort Oceana Palm Jumeirah - July 2008
Ibn Battuta Hotel Dubai operated by M?venpick Hotels & Resorts - August 2008
Movenpick Hotel & Residence Hajar Tower Makkah - 2008
Movenpick Hotel Riyadh - 2008
Movenpick Hotel Yanbu - 2008
Movenpick Resort Ajman - 2008
Movenpick Hotel Jumeirah Beach - 2008
Movenpick Hotel & Residence Laguna Tower Dubai - 2008
Movenpick Hotel Gaza - 2008
Movenpick Hotel Ramallah - 2008
Movenpick Hotel Dubai Pearl - 2009
Future growth plans include Muscat, Abu Dhabi and further development in Dubai. Both Muscat and Abu Dhabi are currently undergoing major development in terms of hotels and resorts and both have tremendous potential as future MICE and leisure destinations. We are also looking at Amman to add to our four properties there.
How significant is the region to Movenpick?
Our growth is founded on a very sound financial basis and over the past few years has shown positive operating results combined with growing returns to our shareholders in the Middle East.
Our decision to increase our presence is part of our strategic growth plans for this region and demonstrates our commitment to the development of tourism here.
The ROI here is very good with healthy margins and, in terms of GOP, it is irrelevant whether the hotel is a large or small property. We have smaller hotels in the region with say 150 rooms and make 55% gross operating profit with an average rate of $215. Usually a smaller hotel means lower margins but in some cases this is not so, they are doing very well.
What is Movenpick's core positioning?
In the lower 5-star segment active in the 4-5 star resort hotel and business/airport hotel markets.
What are the marketing challenges for the company?
The biggest marketing challenge in the region's hospitality sector is to become top-of-mind in a very competitive location at a crucial time.
Most likely 2007 will see several announcements of additional new openings, however it will be next year when the region will be spoilt with fresh campaigns, advertisements and promotions.
Given these circumstances, the pressure in the Middle East has intensified for all competitors and should be seen as an opportunity and gateway for successful and creative work. This makes it paramount to implement a differentiated approach throughout the entire communication flow especially the interactive channels.
You've taken on a new marketing agency, why?
Shrimp Asia was established in 1975 by Patrick Gauvain, the agency's CEO, and has evolved into Thailand's longest established design and communications firm, developing naturally with information technology. Shrimp Asia's aim is to assist in solving marketing problems with creative and innovative solutions.
In January, Shrimp Asia opened in Dubai Media City to handle the growing client base in the Middle East and now also covers markets in the Subcontinent.
Having expanded in the opposite direction, we started our cooperation with Shrimp Asia on its first property in SE Asia, the Movenpick Resort and Spa, Karon Beach Phuket. Currently a range of Movenpick Hotels & Resorts in the Middle East are working together with Shrimp Asia on a variety of marketing projects for operational and pre-opening assignments in Bahrain, Jordan, Kuwait, KSA, Qatar and the UAE.
Shrimp Asia will deliver the creative input and develop campaigns to position Movenpick Hotels & Resorts in the Middle East and Asia in the 5-star segment and ensure that brand recognition transcends its traditional German speaking markets.
What are your thoughts on the over supply of hotel rooms across the region?
Demand will continue to grow for Dubai and we foresee a drop in occupancy levels and average rates starting mid 2008 and until end 2010 due to the massive injection of supply.
The drop, however, is not a crash but a mere market adjustment to the exorbitantly high prices set by hotels in time of shortage of supply such as the periods witnessed so far in 2005 and 2006. By 2010 we foresee demand catching up with supply and for both occupancies and average rates to go back to high levels.
Gulf Marketing Review 2007
