Rotana expects faster return to pre-pandemic growth levels by year-end, CEO says

Exclusive: Abu Dhabi hospitality group signs initial pact for five-star resort in Benin, West Africa's fifth largest tourist destination

Azure Rotana Resort & Spa will be in the port city of Oran, Algeria. Photo: Rotana
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Abu Dhabi-based hotel operator Rotana expects a faster return to pre-pandemic levels of business by the end of this year — from an earlier forecast of 2023 — spurred by a growth in tourist numbers, return of business meetings and the Fifa World Cup in Qatar, its president and chief executive said.

The hospitality group anticipates “nothing less” than a 20 per cent to 25 per cent increase in revenue this year compared to 2021 and another 15 per cent to 20 per cent year-on-year rise in 2023, Guy Hutchinson told The National on the sidelines of the Future Hospitality Summit in Dubai.

Backed by strong investor appetite in hospitality development, Rotana is planning seven more hotel openings by the end of this year, Mr Hutchinson said. Seven more property openings are planned for 2023, though these could double by the end of next year amid continuing discussions.

“We're no longer talking about recovery, that language is not what we use on a regular basis any more,” Mr Hutchinson said.

“We're talking about growth, expansion, reinstating the strongest fundamentals in the industry, reinvesting in properties, growing the portfolio. We have launched our new brand Edge and we are growing our franchise business.”

Dubai hosted 8.1 million international visitors in the first seven months of 2022, an almost threefold increase compared to a year ago and surpassing the total for 2021. The emirate, whose tourism sector has recovered significantly in the post-Covid era, hosted 7.28 million visitors in 2021.

Project pipeline from Benin to Luxor

Rotana currently manages a portfolio of more than 100 properties across the Middle East, Africa, Eastern Europe and Turkey, with an aggressive expansion plan.

The hotel management company signed an initial pact for a five-star resort in the West African nation of Benin, Mr Hutchinson said.

It also signed a deal for its new hotel brand Edge in Istanbul and a deal for The Residences by Rotana to provide villa accommodation in the port city of Bodrum on Turkey's south-west coast on the Aegean Sea.

The first Edge hotel is due to open in Jaddaf, Dubai on October 1.

Next year, Rotana will make its foray into the Algerian market with the launch of Azure Rotana Resort & Spa in the port city of Oran. The property is scheduled to open in March.

Its new hotel in Muscat's Al Mouj Development is due to open in the first quarter of next year.

The hotel operator will launch the Luxor Rotana at the end of 2023 in Egypt's historic city famed for its ancient monuments. Luxor Rotana is one of six new hotels set to open in Egypt, with properties also bound for New Cairo and the north coast in 2024.

“Egypt is one of the strongest developing markets that we've seen,” Mr Hutchinson said.

“I was there three weeks ago and the last time I saw physical construction on that scale was in China.”

The coming hotel openings planned for this year and the next comes as investment in hotel construction has accelerated following the pandemic, Mr Hutchinson said.

“We're seeing a pace in development and build with hotels that we didn't expect,” he said.

“Investors have seen a certain amount of resilience in the industry during the pandemic. They've seen a strong recovery and maybe they've had an opportunity to negotiate good contracts.”

As the third quarter draws to a close, Rotana has been “spot on” for its performance forecast for the three-month period, Mr Hutchinson said.

“We haven't seen any slowdown anywhere,” he said. However, there was a “small blip” with an outflow of GCC travel to Europe but countries such as Jordan and Beirut “will perform more strongly” next year.

The company has just finished its financial planning cycle for next year and will be “budgeting for very strong growth across the region,” Mr Hutchinson said.

He said Rotana expected the current trend of strong performance across the Middle East to continue into 2023.

“The region has done so well in capturing new markets and new business and there's been so much support from governments and airlines,” Mr Hutchinson said. “That's all underpinning very strong growth dynamics.”

Fifa World Cup buzz

Rotana's hotels in Doha and Dubai, the Middle East tourism hub, are reporting strong bookings in the fourth quarter during the four-week football mega-tournament in Qatar, which kicks off in mid-November, said Mr Hutchinson.

Its five-star properties in Doha's city centre are at full capacity, while the occupancy rate at its other properties will hit the “high 90s”, he said.

Rotana is also preparing to open two new properties in Doha on November 1 to ride the Fifa World Cup boom.

The group's Dubai hotels are recording “significant demand” for bookings in November and December, with occupancy expected to reach “mid to high 90s” as dozens of daily shuttle flights between the emirate and Doha transport fans during the event, Mr Hutchinson said.

He added that the higher inflation rate and fuel cost “have the potential” to impact the company as the average daily rates of hotel rooms go down, but the effect will be offset by growing occupancy and the diversity of source markets.

Visitors from traditional markets such as Saudi Arabia and the UK have rebounded strongly, while demand from existing markets like France has doubled, Mr Hutchinson said.

Travellers from new markets in Latin America, such as Brazil and Mexico, are also contributing to Rotana's growth.

“We haven't seen China reopen yet but when it does, it will add another layer of growth on top of where we are,” Mr Hutchinson said.

Updated: September 19, 2022, 4:11 AM