Arabian Travel Market: Hilton plans to double its Middle East, Africa and Turkey hotels portfolio in five years
The hotel operator has a pipeline of 173 properties, most of which are at construction stage, its regional president says
Hilton, the New York-listed hotel operator, plans to double its portfolio of 169 hotels in Middle East, Africa and Turkey in the next five years with a sharp focus on expansion in the Arab world’s two biggest economies – Saudi Arabia and the UAE.
“Last year, was a bit slow … in terms of the number of openings. [However] the good news is that we signed quite a few new hotels during the pandemic, showing the strength of our brand,” Jochem-Jan Sleiffer, Middle East, Africa and Turkey president for Hilton told The National on the sidelines of Arabian Travel Market on Tuesday.
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“When I look at the entire region … the opportunity is still there to double the number of hotels within the next three to five years.”
The operator has boosted its pipeline of new properties to 173 hotels and the majority of them are under construction, Mr Sleiffer said.
“Some of the openings, which were planned for this year will slip into next year. [But] we will see a big hike in 2022 and 2023,” he said.
In the Middle East, Hilton currently operates 60 hotels and has 86 hotels in the development process. Its regional portfolio will more than double when the pipeline matures.
In the UAE, the company has 30 hotels and 17 in the pipeline, while in Saudi Arabia, it has a portfolio of 14 hotels and a pipeline of new properties that is three times bigger.
“We saw the demand before the pandemic and we see the demand now. The demand is huge,” Mr Sleiffer said. “We have 115 million Hilton Honours members and these people want to travel, they are actually desperate to travel.”
Hilton has ambitious plans to expand in Saudi Arabia, a market that offers opportunities in both leisure and religious tourism. The kingdom is home to Islam's holiest sites, which before the pandemic annually attracted millions of pilgrims – a group that Hilton expects will continue to fuel demand for hotels.
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“The religious travel will always be a big base for the business that goes into that country", he said, adding that the kingdom has the potential to be “much bigger” than any other market in the region.
The opening up of Saudi Arabia’s market after 14 months is also a “big deal” for Hilton, not just for its Middle East operations but also for its European properties that count the kingdom as an important source market.
Hilton, like other hotel operators, has benefited from a rise in staycation business in the UAE, Mr Sleiffer said.
“There’s very little [corporate] business … it’s purely leisure. People have discovered how many things you can do here actually,” he said, adding that Hilton adapted to the trend very quickly and some of its beach properties have performed very well despite pandemic headwinds.
The government’s vaccination drive in the UAE has also helped in boosting Hilton’s business. The operator now counts local residents as its biggest source market, followed by Russia and some other Central Asian states.
Mr Sleiffer expects corporate sector business to take about one-and-a-half to two years to fully recover. There was very little demand for MICE (meetings, incentives conference and exhibitions) business in 2021, but there are indications of a pick-up in the second half of the next year, as people are “anxious to get back together".
A hospitality veteran who has spent more than three decades with Hilton, Mr Sleiffer took up the leadership role in the region in January last year.
With the hospitality industry still dealing with uncertainties, he is calling for a vaccine passport or a similar centralised inter-governmental system that can help ease travel restrictions.
“The quicker governments can get together in deciding on vaccination passport, a digital passport” the better it will be for the hospitality industry, as it will allow people to travel safely, he added.
Updated: May 19, 2021 01:10 PM