A bedroom suite at the St Regis. Courtesy St Regis Hotels
A bedroom suite at the St Regis. Courtesy St Regis Hotels

The birth of a luxury hotel is a labour-intensive process

The US$600 million (Dh2.2 billion) St Regis project on Saadiyat will be one of the first resorts to open on the island that eventually will be home to branches of the Guggenheim and Louvre museums, as part of a $27bn masterplan.

But hotels do not just spring up unbidden out of the ground. A long, complex process is involved in the creation of such a project, in this case taking more than four years from idea to reality.

The amount of effort involved is tremendous, with 9,000 workers on site now toiling to get the hotel ready to open on November 1. Several companies are involved at every stage, including architects, interior designers, landscape designers, engineers and contractors.

The St Regis resort is being developed by Abu Dhabi's Tourism Development and Investment Company, while Starwood Hotels and Resorts is responsible for operating the hotel. Below, Paul McMillan, the senior vice president of design, construction and engineering for Starwood, Europe, Africa and the Middle East, talks about how the project started.


Typically on long, complex projects like this, we start work a little before the contract has been signed. A lot of the time we move ahead in good faith with owners on an agreement that we're going to make an agreement. That's not always the case, but on this project it was.


The first thing we really did on that project was develop a facility programme. That's a list of facilities that we felt were right for the site, for the brand, the owners, who themselves have specific requirements, and for the market. It's a document that would highlight the sort of facilities that we think are right for the location. It's essentially a brief for the designers and the architects to move forwards with. This takes three or four weeks.


There are a lot of factors in this location. The first of which is Abu Dhabi's a hot place. As a starting point, what are the climatic conditions. In summertime it's extremely hot. What are people going to do when it's hot? What are people going to do in the winter time? How will you take advantage of the beach? How will you take advantage of the new cultural precinct? They are all decisions that would be factored into the equation. It's really looking at everything from how people get to the resort, when are the peak times of the year, what facilities they would be expecting when they arrive. Then you'll get into the interiors, the style of the guest rooms, the restaurants. It's a market-driven approach. I would say all really well worked out hotels are derived from the market, not the other way around.


On a site like this where there's a natural beach it's important to give every guest room a view. You'd be surprised how often people don't do that. If you're coming from Europe and you'd seen the website or the brochure on this resort and you arrived and your guest room was looking back over the loading dock and you didn't have that magnificent view of the beach, I think you would feel shortchanged.

Recreation facilities

The second thing is to provide recreational facilities that appeal to different user groups. In luxury resorts, it's very important that you have a family pool and an adults' pool. If people are there as a couple without children, they have a very different approach to their recreational requirements. We have three swimming pools plus the beach. We've got private cabanas [small huts].

In resort hotels, people spend a lot of time out of their guest rooms. So where are they? They're at the beach, they're around the pool, they could be in the spa.

The other thing is in a luxury resort, people are there for a week. We've got to provide a variety of food and beverage offerings. We put a couple of the restaurants out of the hotel. Customers enjoy walking through the landscape to get to restaurants. We've got a beach club-style restaurant and we have an Asian restaurants in the ground. There's an upmarket steakhouse in the hotel and a multi-cuisine restaurant.

We think we're going to get business from the city coming to the property in the Abu Dhabi market. Nowadays, having a fantastic spa is critical.

Design process

The total design process is a year and a half to two years. It's ongoing. You're designing right up until nine months before you're open. Design work was done all over the place. The conceptual design and the architectural documentation was done in Dubai. The interior design was done in Atlanta. The landscape design was done in Johannesburg and Dubai.

There are model rooms to be built and they happen some time after the construction starts, so you're making modifications based on model room design. The model rooms were reviewed about a year ago.

For these style of hotels which are very bespoke - St Regis is a bespoke brand - the design is a much more complex and difficult process. It does take longer compared to a four-star cookie-cutter brand. Every detail has to be designed and every space should not look like any other space. We want every St Regis property to be unique.

The hotel is not going to be an overly ornate hotel. We don't feel that's appropriate for the location.


The objective from the architectural viewpoint for this hotel was to create sort of a Mediterranean concept. We felt that the typical very usual Middle Eastern facade style has been very much overdone. The important thing is to have a lot of shade. In places where you're getting temperatures of 40C to 50C, it's critical. That style of architecture with colonnades and wide eaves overhangs are very important for very, very hot locations. We felt that a very modern style didn't really work for the St Regis brand. In all of these deliberations, we're very aware of what the brand is. St Regis has a history stemming from 100 years ago. We like the hotels to have a more classical orientation. The Mediterranean style of architecture is really appropriate for the brand and the beach location we felt. Architecture design takes nine months to a year.


Nearly always the architecture comes before the exteriors. The interiors in this case lead on from the architecture. Typically, you would have an architectural design that would be pretty developed and you would have exterior renderings, you would have floor plans, we would know pretty much where everything is located, and then the interior designer will come on board. In resort hotels the exterior and interiors really have to work together. In this hotel we've used a lot of natural, light materials.


Important for a resort is the landscape. The landscape is nearly the most important part of the resort experience because people are out in the landscape all the time. We ensure that we have excellent quality landscape architects to do that work. There's a whole briefing process just to do the landscape. To make the landscape interesting you provide areas which don't really have any purpose, but are nice places to walk through in the traditions of the old classic hotels.

Building materials

Lots of very natural materials, marbles, limestone, and sandstone, sorts of natural Mediterranean materials. The other thing in this equation is that there's a budget and you have to balance, of course, the materials that you use with the available budget.

Construction process

Construction on this project took more than two years. There's the piling, then there's the completion of the frame, then all the windows and facades are put in, then the finishes go in. The last things would be moving all the furniture in, tiling and filling the pools, putting in all the light fittings, the chandeliers and putting the plants in.

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.”


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