Selim El Zyr, the president and chief executive of Rotana Hotels. Delores Johnson / The National.
Selim El Zyr, the president and chief executive of Rotana Hotels. Delores Johnson / The National.

India move a Rotana Hotels milestone



A move into India by Rotana Hotels would be a milestone for the Abu Dhabi operator.

As yet, the company manages hotels only in the Middle East and North Africa, with properties spanning across the Gulf region, and countries including Iraq, Sudan, and Egypt.

"We have signed up agreements in almost every major city of the Middle East," said Selim El Zyr, the president and chief executive of Rotana Hotels. "We are almost everywhere in North Africa. So it is natural to keep on expanding. We cannot stop there. We cannot grow any more if we don't look outside of where we are."

India, where Rotana hopes to be managing 20 hotels within a decade, is a logical step for a number of reasons, he said. It is a market on the doorstep of the UAE that is in need of more hotels as travel within and to the country booms, and because of the close ties and large Indian expatriate community here. Travel and tourism directly contributed 1.68trillion rupees (Dh120.43 billion) to India's economy last year, and that is forecast to rise by 7.6 per cent this year, and to reach 3.8tn rupees in 2022, according to figures from the World Travel and Tourism Council.

"India is not a foreign country to us," said Mr El Zyr. "We are so close, we know the culture, we know many people. We have a huge amount of staff that are with us that would like to relocate to India."

There are other areas where the operator is hoping to open hotels, he said. "India, we have taken the step and we have somebody there. We are looking at many other markets. We are looking at Africa, CIS [Commonwealth of Independent States] countries in Central Europe, Turkey," Mr El Zyr said.

Iran is another country in which it would like to operate, despite that country's tense relations with the international community.

"Iran has got tremendous potential. We are waiting and hoping that very, very soon this tension between Iran and the world will ease up," Mr El Zyr said. Rotana would eventually like to have hotels in China, too.

These expansion plans follow what Rotana's chief executive called "a challenging year" for the company. The Arab Spring took its toll on many of the company's hotels and projects.

"In Libya, we had signed a management agreement, and all of a sudden it went off the radar, so we didn't know what the future was," Mr El Zyr said.

"I went to Libya maybe a week before it all started, and we were also in negotiations to bring up a couple more brands. The effect of Libya on us was a loss of opportunity. But the effect of Egypt and Syria was a lot more direct. In Egypt, we have got our hotels and about 1,500 staff members. We had our worries, to keep them, to maintain the brand image at a time when business almost collapsed. But luckily, with the support of four owners, we were able to stand against the hurricane. We are OK now. Our business is not where it should be, but we are not in the red any more."

Rotana has a resort in Syria and a hotel in the capital, Damascus. "The revenue generated from these hotels was insignificant, whereas we had anticipated for Syria a lot of return. We had four hotels under construction in Syria at the time when it all started. They have all been put on hold." But these setbacks were largely compensated for by the performance of Rotana's hotels in the GCC, which benefited as travel flows were diverted from troubled countries to the UAE in particular.

These effects meant the company fell 5 to 10 per cent behind its budgeted performance for last year, Mr El Zyr said. "In the end result, there has been an improvement over 2010 because we opened a few hotels in 2011, but we were slightly behind budget."

Some of the company's hotels scheduled to open last year in the UAE are also taking longer than expected.

Rotana now hopes to open its Centro hotel at the Abu Dhabi National Exhibition Centre this year, with two more properties at the complex not expected to be completed until next year, the chief executive said. "Delays happen in construction. It is natural that, at the time when there is a surplus in the market, developers and contractors tend to delay projects," he said.

Its resort on Saadiyat Island in Abu Dhabi is even more severely delayed.

"Saadiyat we are still waiting to get financing," said Mr El Zyr. "For many reasons, it's better to delay projects of this nature. Two hotels just opened on Saadiyat. And for the whole market, to bring in so many hotels at the same time is not healthy."

As the company ventures into India, Mr El Zyr acknowledges that the country is likely to present its own challenges.

"This is a country of tremendous opportunities. But this doesn't mean that there are low-hanging fruits," Mr El Zyr said.

"There are opportunities; but it's challenging. It's not easy, otherwise everybody would go to India tomorrow."

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COMPANY%20PROFILE
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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
 
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
Round 3: February 7-9, Dubai Autodrome – Dubai
 
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
The specs

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Engine: 8.0-litre, quad-turbo 16-cylinder

Transmission: 7-speed auto

0-100kmh 2.3 seconds

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0-300kmh 11.6 seconds

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

DMZ facts
  • The DMZ was created as a buffer after the 1950-53 Korean War.
  • It runs 248 kilometers across the Korean Peninsula and is 4km wide.
  • The zone is jointly overseen by the US-led United Nations Command and North Korea.
  • It is littered with an estimated 2 million mines, tank traps, razor wire fences and guard posts.
  • Donald Trump and Kim Jong-Un met at a building in Panmunjom, where an armistice was signed to stop the Korean War.
  • Panmunjom is 52km north of the Korean capital Seoul and 147km south of Pyongyang, North Korea’s capital.
  • Former US president Bill Clinton visited Panmunjom in 1993, while Ronald Reagan visited the DMZ in 1983, George W. Bush in 2002 and Barack Obama visited a nearby military camp in 2012. 
  • Mr Trump planned to visit in November 2017, but heavy fog that prevented his helicopter from landing.
Paatal Lok season two

Directors: Avinash Arun, Prosit Roy 

Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong

Rating: 4.5/5

THE LIGHT

Director: Tom Tykwer

Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger

Rating: 3/5

Vidaamuyarchi

Director: Magizh Thirumeni

Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra

Rating: 4/5

 

Emergency

Director: Kangana Ranaut

Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry 

Rating: 2/5

The specs

Engine: 3-litre twin-turbo V6

Power: 400hp

Torque: 475Nm

Transmission: 9-speed automatic

Price: From Dh215,900

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The specs
Engine: 77.4kW all-wheel-drive dual motor
Power: 320bhp
Torque: 605Nm
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One in nine do not have enough to eat

Created in 1961, the World Food Programme is pledged to fight hunger worldwide as well as providing emergency food assistance in a crisis.

One of the organisation’s goals is the Zero Hunger Pledge, adopted by the international community in 2015 as one of the 17 Sustainable Goals for Sustainable Development, to end world hunger by 2030.

The WFP, a branch of the United Nations, is funded by voluntary donations from governments, businesses and private donations.

Almost two thirds of its operations currently take place in conflict zones, where it is calculated that people are more than three times likely to suffer from malnutrition than in peaceful countries.

It is currently estimated that one in nine people globally do not have enough to eat.

On any one day, the WFP estimates that it has 5,000 lorries, 20 ships and 70 aircraft on the move.

Outside emergencies, the WFP provides school meals to up to 25 million children in 63 countries, while working with communities to improve nutrition. Where possible, it buys supplies from developing countries to cut down transport cost and boost local economies.

 

MATCH INFO

Euro 2020 qualifier

Norway v Spain, Saturday, 10.45pm, UAE

MATCH INFO

Barcelona 4 (Messi 23' pen, 45 1', 48', Busquets 85')

Celta Vigo 1 (Olaza 42')

At a glance

- 20,000 new jobs for Emiratis over three years

- Dh300 million set aside to train 18,000 jobseekers in new skills

- Managerial jobs in government restricted to Emiratis

- Emiratis to get priority for 160 types of job in private sector

- Portion of VAT revenues will fund more graduate programmes

- 8,000 Emirati graduates to do 6-12 month replacements in public or private sector on a Dh10,000 monthly wage - 40 per cent of which will be paid by government

MATCH INFO

Champions League last 16, first leg

Tottenham v RB Leipzig, Wednesday, midnight (UAE)

More from Armen Sarkissian
ESSENTIALS

The flights

Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.

The hotels

Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.

The tours

A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.