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Q&A: Omer Kaddouri, CEO, Rotana

Omer Kaddouri, President & CEO, Rotana Hotels & Resorts

Omer Kaddouri is president and CEO of the Rotana hotel group, which is headquartered in Abu Dhabi. Rotana has properties in more than 20 destinations, mainly in the Middle East, with plans for further expansion in Africa and beyond. It includes the Arjaan, Rayhaan and Centro brands.

Are you on course to meet your target of operating 100 hotels by the year 2020? 
Yes, we opened 10 in 2016, which is pretty much on target. With the opening of 16 new properties by the end of 2017, we should reach 76 hotels. With an average of 10 a year opening, I think we’re going to smash that target!

Where is your newest opening? 
In Kinshasa, DRC [Democratic Republic of Congo] in  December – quite a way away from most of our hotels, it’s exciting. It’s a hotel-apartments model, unique for the Arjaan Brand – and unique for Kinshasa, which has lots of hotel rooms but no quality hotel apartments.

Is it a challenge opening a property in the DRC? 
Yes it is. There’s been some political upheaval recently. But it’s par for course. You go to sub-Saharan Africa and some of the developing places with your eyes wide open. You study the lie of the land, and use a lot of the local expertise and experience – the owners of this hotel have been in Kinshasa since 1970.

Where are you opening properties in 2017?
There’s a lot happening in the [Middle East] region: two more in Turkey, four in Saudi Arabia. Our first four-star hotel in Muscat, near the airport – then a year later we’ll open an additional 100 keys of apartments at the property.

And there’s still a lot of interest in the UAE. In Dubai alone we’ve got nearly 5,000 more hotel rooms to open up between 2017 and 2020, of which 2,500 are five star. There’s lots happening in our home region, meanwhile we’re also out trying to grab some footprint in other countries around us. 

Do you think the level of growth in Dubai is sustainable? 
It’s a question everybody’s been asking for years. But for the past 3-4 years there’s been 10,000 hotel rooms opening in Dubai every year. Today compared to last year, Dubai is down just 1-2 points in occupancy – percentage is still up in the high 70s to 80s.

Why it does it continue to be busy? Because Dubai is working tirelesly on marketing itself. The airline is growing, there are more destinations, theme parks are opening up every year now. Business is still strong, people are still coming in  – but they’re paying less year on year; the Revpar’s been dropping about 10 points a year for the last two years, because there are so many hotels – coming in with promotional rates, trying to grab market share.

On top of that price of oil has really affected government spend, there’s less money coming from oil & gas companies. So all these things have happened to our region, but we’re still running at occupancies of 80 per cent.

Is the drop in Revpar putting you off investing in Dubai? 
Definitely not. It might be knocking our profitability but hotels are still doing well and will continue to do so. We may see a slight dip immediately after the six months of the Dubai 2020 Expo – but you see that after any major event in any major city.

But as long as it continues the dynamic of driving business into Dubai, there’s no reason why can’t continue – this what it’s planning: sustainable occupancies and revenues. What other countries put as much strength and focus into ensuring a sustainable hospitality industry as Dubai and Abu Dhabi?

What is your biggest challenge? 
The geo-political situation in the region – we hope that what’s happening in places like Syria is not going to spread further. This is what people worry about the most.

We are seeing positive steps in Iraq. But Syria… we don’t want it to be the straw that breaks the camel’s back. We’ve overcome crises in the region before, and we hope to do so again – but there’s no sight of that at the moment.

And we are all monitoring the price of oil carefully. But it’s been a while now in the $40-50-a-barrel range, and life is going on. You’ll be amazed to find how people are adaptable to scenarios. We all got used to $120 a barrel, we’re all getting used to $50.

What’s your take on the big chains’ aggressive direct marketing to the traveller?
We are a small company compared to the big boys. When they sit down and look at how how much commission they’re paying, I’m not surprised they have think tanks and huge meetings on how to cut this. They could be saving billions of dollars every year, so I can understand why they’re doing that.

Those consolidating are building ever-bigger muscle to take on the OTAs. But we are not a giant multinational, we need to work with all platforms. As much as we drive our own website and brands – doubling every year in terms of room nights and revenue – it’s not enough. I’ve said before that we embrace the OTAs, contrary to others.  

Maybe one day if Rotana amalgamates with a huge company, that will change, because the muscle will change.

And do you envisage that amalgamation happening? 
A lot of hotel chains, especially coming out of China, are on the warpath to snap up regional brands, because they want immediate access to certain regional areas where they’re not strong.

I know we are attractive to some of the large companies. But we’ve taken 20 years to build what we have today. We’re in control of our destiny, and that’s the way we want to keep it… until further notice! 

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