Accor's first luxury boutique hotel in the region was the Majlis Grand Mercure Residence in Abu Dhabi. Mona Al Marzooqi / The National
Accor's first luxury boutique hotel in the region was the Majlis Grand Mercure Residence in Abu Dhabi. Mona Al Marzooqi / The National

Travel and Tourism

Accor to add 700 rooms at two-hotel cluster near Dubai International Airport

French hotel operator looking to tap surging airport passenger traffic in Dubai.

Sananda Sahoo

12 January, 2016

The French hotel operator Accor will open hundreds of new hotel rooms near Dubai airport to tap surging passenger traffic.

The company will operate two hotels, one under its five-star Majlis Grand Mercure brand, and a three-star Ibis Styles, adding a total of 700 rooms in Al Garhoud close to Dubai International Airport, said Olivier Granet, the French company’s new regional managing director.

The cluster of hotels is being developed by Abu Dhabi’s Al Otaiba Group.

This month it will open its largest Ibis property in the region with 588 rooms, the Ibis Dubai One Central, situated near Dubai World Central. Accor is also due to open the 250-room Ibis Styles at Dragon Mart in the city this month.

“There is a certain pressure on the room rates because of the supply and global environment this year but we still have increase in the number of visitors, and we know the cycle in the hospitality industry,” Mr Granet said. “At Accor we will try to maintain the rates as much as possible in most of our properties.”

He succeeds Christophe Landais who left to head Accor Hotels’ Iran operations.

Accor operates 30 hotels in the UAE. It has another 11 properties under development in the Emirates, adding about 3,500 rooms to the market.

In November, the latest monthly data available, Dubai reported a 5.4 per cent increase in supply and 2.4 per cent increase in demand year-on-year, according to research firm STR Global.

The average occupancy rate declined 2.9 per cent year-on-year to 83 per cent, and there was a 7.1 per cent dip in the average daily rate to Dh889.13.

Accor still regards the Abu Dhabi market as attractive as some of the sector’s anticipated drivers of growth, such as Louvre Abu Dhabi and other attractions have yet to open.

“You can expect there will be additional attractiveness to generate additional room nights in the future [once these are ready],” Mr Granet said.

Abu Dhabi average hotel occupancy fell 2.8 per cent to 76 per cent in December, even as room rates declined by 6.8 per cent to Dh546.18.

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What is graphene?

Graphene is a single layer of carbon atoms arranged like honeycomb.

It was discovered in 2004, when Russian-born Manchester scientists Andrei Geim and Kostya Novoselov were "playing about" with sticky tape and graphite - the material used as "lead" in pencils.

Placing the tape on the graphite and peeling it, they managed to rip off thin flakes of carbon. In the beginning they got flakes consisting of many layers of graphene. But as they repeated the process many times, the flakes got thinner.

By separating the graphite fragments repeatedly, they managed to create flakes that were just one atom thick. Their experiment had led to graphene being isolated for the very first time.

At the time, many believed it was impossible for such thin crystalline materials to be stable. But examined under a microscope, the material remained stable, and when tested was found to have incredible properties.

It is many times times stronger than steel, yet incredibly lightweight and flexible. It is electrically and thermally conductive but also transparent. The world's first 2D material, it is one million times thinner than the diameter of a single human hair.

But the 'sticky tape' method would not work on an industrial scale. Since then, scientists have been working on manufacturing graphene, to make use of its incredible properties.

In 2010, Geim and Novoselov were awarded the Nobel Prize for Physics. Their discovery meant physicists could study a new class of two-dimensional materials with unique properties. 

 

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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.”

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