Interview: Ritz Carlton Riyadh's GM spells out two-fold challenge for Kingdom's hotel industry

By 2030, tourism is expected to grow to 10% of the Kingdom's GDP, worth about $100bln

  
Exterior view of the Ritz-Carlton Hotel in Riyadh, Saudi Arabia, Saturday, January 23, 2016. REUTERS/Jacquelyn Martin/Pool

Exterior view of the Ritz-Carlton Hotel in Riyadh, Saudi Arabia, Saturday, January 23, 2016. REUTERS/Jacquelyn Martin/Pool

Jacquelyn Martin/Pool

DUBAI: For a few weeks in late 2017, the Ritz-Carlton in Riyadh became probably the most famous hotel in the world when it was used to accommodate people involved in Saudi Arabia’s high-profile anti-corruption investigation.

But ever since, it has been “business as usual,” according to the general manager, Mohammed Marghalani  — taking care of the visiting presidents, heads of state and business leaders that make up most of the luxury hotel’s clientele, as well as the occasional honeymoon couple or affluent tourist family wanting a bit of up-market rest and relaxation in the Kingdom’s capital.

“I’ve worked at several big hotels in the Kingdom, but the Ritz-Carlton is different. It is the major hub for all government events in the capital. I was here when President Trump visited, and for events like GCC summits and the Future Investment Initiatives (FII), and have seen a lot of Hollywood celebrities here. There is nothing quite like it in Saudi Arabia,” he told Arab News.

Anybody who has spent any time at the monumental structure northeast of downtown Riyadh, or the equally imposing King Abdul Aziz Conference Center next door, would surely agree. In fact, it is arguable that there is nothing quite like the Ritz-Carlton Riyadh anywhere else in the world.

Whereas most luxury hotels will have a presidential suite for the use of elite guests, the Ritz has 49 “royal suites,” each designed to head-of-state specifications; it has 48 executive suites that would be classed as “presidential” in many five-star establishments; and it has 396 deluxe rooms.

If you get lucky on the “dynamic rate” system used by most hotels, like airlines, to match demand with supply, you might get a deluxe room at the weekend for a bargain SR1,000 ($270) per night; but a royal suite can cost anything between SR15,000 and SR45,000.

It has one of the biggest all-day dining restaurants in the world, the Al-Orjouan, which can seat 450 guests at a time, as well as other fine-dining establishments with European, Asian and Arabic cuisine; it has a luxury swimming pool and spa complex; and it has the Strike bowing alley, popular with families at weekends.

BIO

Born: Riyadh, 1982

Education: 

  • Prince Sultan College for Tourism and Management, Abha KSA
  • Glion Institute of Higher Education, Switzerland.
  • Ecole hoteliere de Lausanne in Switzerland, MBA

Career

  • Manager in training, Four Seasons KSA
  • Chief accountant, Fairmont-Raffles-Swissotel, Riyadh
  • General Manager, Ritz-Carlton Riyadh

Set in 52 acres of landscaped gardens, it was originally planned as a luxurious “guest palace” for official visits, but management of the hotel was soon handed over to Ritz-Carlton as a profitable commercial proposition.

Marghalani joined the Ritz-Carlton in its pre-opening period in 2011, after stints at Fairmont and Four Season properties in the Kingdom, focusing on the financial side of hotel management. He was appointed general manager at the beginning of this year.

His career trajectory reflects an almost-military discipline instilled in him by his father, a major general in the security forces. “All my friends at school were focused on engineering, management and medical careers, but my father told me to get into hospitality and tourism when I left high school in 2000. He told me I would be a pioneer, and now I value his vision,” Marghalani said.

“The hotel business has some similarities to the military, I’ve noticed. To run a hotel properly you need discipline, smartness and attention to detail,” he said.

After a spell in the Prince Sultan College for Tourism and Management in Abha in the Kingdom, he graduated in hospitality and tourism management in 2006 from the Glion Institute of Higher Education in Switzerland, followed by an MBA from the Ecole hoteliere de Lausanne in the same country. 

A few years later, the hotel and tourism sector in Saudi Arabia would take off under the Vision 2030 strategy to diversify away from oil dependency, which placed great emphasis on two big initiatives: Providing leisure facilities at home for Saudi citizens more used to spending leisure time abroad; and encouraging foreign tourists to come to the Kingdom.

By 2030, tourism is expected to grow to 10 percent of the Kingdom’s GDP, worth about $100 billion, and provide 1.5 million new jobs for the young workforce serving the needs of a projected 100 million visitors per year. It is an ambitious program for a country mainly accustomed in the past to catering for the needs of religious pilgrims to the Two Holy Mosques in Makkah and Madinah for Hajj and Umrah.

The challenge for Saudi Arabia is two-fold, Marghalani believes: First, in providing the right number of hotels across the market range; and second, in equipping Saudis with the skills to run them to international standards.

“From all I’ve heard in the industry, I know the pipeline for new hotels in Saudi Arabia is there, even just over the next three years. There is a big number of international brands looking at developments in some of the mega-projects, like NEOM, the Red Sea, AlUla and Qiddiya,” he said.

But the immediate need is for accommodation to house the thousands of attendees to the G20 summit in November, when the leaders of the most important countries on the planet will be arriving in the Kingdom for their annual power gathering, along with their significant entourages and thousands of media representatives.

“All the studies I’ve seen show that we have enough capacity in the five-star space, with existing stock and planned openings. There is probably a need for more mid-range hotel accommodation, which I am sure the authorities and investors are looking at seriously,” he said.

On the question of Saudi manpower for all those new establishments, he pointed to the success of the Tahseen program developed in partnership between the Kingdom, the Marriott International hotel chain — which owns the Ritz-Carlton brand — and Cornell University of New York, which trains young Saudis in hospitality skills and is now entering its third year. Some of the big megaproject developments, such as Qiddiya and the Red Sea Development, have their own schemes to assist Saudis in training for the hospitality business.

The customer profile of the average Ritz-Carlton guest is rather different from most other hotels in the Kingdom, Marghalani said. About 45 percent of its business comes from what he calls “special corporate” — the consultants, executives and bankers who travel to the Kingdom for business during the week, when the hotel is usually full.

Roughly the same proportion of revenue comes from government groups and events, the most notable being the FII annual gathering when, again, the hotel is full.

The remaining 10 percent are made up of Saudis visiting Riyadh from other cities, or from “honeymooners, weekenders, transients and normal tourists” who want a bit of Ritz luxury during a holiday in the Kingdom.

“I think this last category will grow in 2020 with the opening up of online visas for foreign tourists. We saw a big increase in this sort of business at the end of last year for the Riyadh Season and the WWE wrestling event. When Qiddiya opens, it will be another boost for us — it’s only a short drive from the Ritz-Carlton,” he said.

But the big event this year will be the G20, although the main venue for the event has not been decided yet. The leaders’ summit are so big and well attended that few venues can expect to stage the whole event, while security also demands some segregation of the elite from rest of the delegates and media.

“I’m not sure where the main event will be, that is up to the G20 authorities. But the Ritz-Carlton is usually the main hub for similar events to the G20, like FII,” he said.

There has been some speculation that the FII event, usually staged in October, might be postponed because of the G20 event coming just a month later, but Marghalani saw no issue. “FII has been held here for the last three years and each time it has been better and more successful. I can see no reason why there might be a conflict with G20,” he said.

For an establishment that has become inextricably connected with the Saudi and global elite, the hotel has an active program of social and community engagement — giving uneaten food to the Riyadh needy, recycling water in the grounds, and charitable programs in the Holy Month of Ramadan.

“And we have all LED lightbulbs throughout the hotel,” Marghalani said. With so many grand chandeliers, that must run into the tens of thousands, and make for a considerable energy saving.

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