In first interview, new Jumeirah chief Stefan Leser lays out plan for growth
Stefan Leser, by his own admission, is an impatient man, but he has waited more than six months to speak to the media since his appointment as chief executive officer of Jumeirah Group, Dubai’s leading hospitality group.
He has spent that time getting to know the group, with its 22 properties in 11 destinations, 215 food and beverage outlets, and 13,500 employees, as well as the shareholder, the government-related conglomerate Dubai Holding.
He must also, I suggest, have been wondering how to follow an act like that of Gerald Lawless, his predecessor who spent 18 years in the top job at Jumeirah and was credited with masterminding its global success.
“Well obviously anybody who comes in after so long under the same man will be different. But I’ve got the highest respect for what he achieved and I have a great relationship with him,” says Mr Leser, a youthful looking 49 year old who originally came from Bavaria, Germany, but lived most of his working life in Switzerland.
The question Jumeirah-watchers have been mulling in the past six months is: just how different will Jumeirah be under the new man?
Mr Lawless was a lifetime hotelier with decades of experience in Dubai. Mr Leser, in contrast, spent most of his early career in information technology, before heading off to Swiss travel company Kuoni where he rose to executive board level.
Some cynics thought that Jumeirah might become an internet-based travel group, instead of remaining a luxury leisure and hospitality business.
I can set the speculative minds at rest. Mr Leser is keen to stress early on in our conversation: “There will be no change in Jumeirah’s strategy. Jumeirah originated under the vision of Sheikh Mohammed bin Rashid Al Maktoum, Prime Minister and Vice President of the UAE and Ruler of Dubai, and it is a very visionary brand. We have benefited from and contributed to the development of Dubai, and that will continue,” he insists.
But that does not mean everything will remain the same. The past decade has been a time of rapid growth for Jumeirah, with new properties going up in Dubai and the rest of the world. At the same time, the travel and hotel business has been revolutionised by the explosive growth in online booking firms that now control much of the market.
The economic background has changed too. First the financial crisis of 2008, now the falling oil price and other macroeconomic forces, have altered the fundamentals of the Jumeirah business.
Mr Leser takes me on a quick tour d’horizon of current trading. “Times have been easier for Dubai in the past, especially in demands from specific markets. But Jumeirah is performing quite well. We’ve broadened our customer base from new source markets, and grown those considerably.
“Some of the new markets don’t come at the same average room rates (AVR), because of source market mix and currency impacts, but we’re experiencing similar or the same volumes as we were a couple of years ago. We see that as a significant achievement,” he adds.
The new source markets have included central Asian countries such as Kazakhstan and Uzbekistan, which have been helping compensate for a fall off in numbers from Britain after the Brexit shock, and from Germany after European terrorism alarms.
“The biggest growth market for Germany recently was Germany, so that impacted Jumeirah. With the British, we saw a dip for a few weeks as they were coping with the surprise Brexit result but we are quite happy with the performance after that. The British are still coming,” he says.
On two other important markets, Russia and China, the news is also good. “The Russians are coming back. Our occupancy levels have not suffered as much as the missing Russian [airport] arrivals market, and they still have a significantly higher than average in-country spend. China is still a growth market for us and an important market. It is also why a significant part of the pipeline of new openings is in China,” he explains.
A new flagship hotel, designed by the late architect Zaha Hadid, will open in Nanjing next year, and a project in Bali, Indonesia, is well advanced. Mr Leser also sees India as a natural growth area for Jumeirah.
But the bigger and more immediate options he has identified as closer to home. Despite the oil price shock, he believes the opportunities to attract tourists from the Arabian Gulf, and to expand further into GCC countries, are better than ever.
“Growth is still at the centre of the strategy, but where there might be adaptations these will be around implementation speed or focus. It might be faster or pushing more for development in the GCC and more selective elsewhere, but driven by opportunities,” he says.
After several false starts, Saudi Arabia is again looming as a growth market. “My focus is on Saudi at the moment. We are working on a few opportunities which are exciting projects. Developing relationships with owners, negotiating contracts and defining opportunities is not a process that is done in weeks, but over a period of time,” Mr Leser says. You sense the impatience again.
In Saudi, he has not ruled out adapting an existing property, while he also sees opportunities in Qatar and Oman, with projects in the pipeline in both.
In these more challenging economic times, he sees some benefit from cost savings, but not at the expense of impairing the service quality associated with the brand. “Efficiencies are made by applying the appropriate technologies and processes,” he says, true to his IT background.
Expect too a new emphasis on the marketing and distribution side of the business – the actual marketing of accommodation and other hospitality offerings around the global tourism industry. “At Kuoni I was in charge of all outbound and inbound operations. I had the opportunity to head an organisation that formed a large part of the global hospitality offering. That’ a competency I bring to the table with Jumeirah,” he says.
If all this sounds like a move away from the traditional hotels business, Mr Leser is quick to point out that he recently appointed a renowned hotelier, Marc Dardenne (ex Emaar Hotels) as chief operating officer, with international expansion under another new appointee, chief development officer Shafi Syed (ex-Trump Hotels).
The conferences business and the F&B arm of Jumeirah are also earmarked for further growth, with more big name chefs slated to open restaurants. He sees opportunities in helping other parts of the Dubai Holding business, like Dubai Properties or the Tecom free zones, in maximising their F&B potential. He does not rule out buying an F&B business in Dubai.
He does, however, categorically exclude one of the rumours of recent years, that Jumeirah’s F&B might be spun off into a separate business and floated on a stock market. He also dismisses the old chestnut about an IPO of Jumeirah itself. “I was not hired to do an IPO. It was not even a conversation I had [with shareholder Dubai Holding].”
He promises a management style at Jumeirah that is “collaborative and consultative”, but he does not see the sense in getting bogged down in committee deliberations. “I do not believe in consensus or appealing to the lowest common denominator in a decision-making situation,” he says.
He says that he will know in five years if he has been successful or not according to three main criteria: executing the growth and development plans; enhancing Jumeirah’s basic brand-equity value; and maintaining the dividend flow to Dubai Holding.
The next big date in his diary will come in December, when the new hotel on the Madinat complex, Al Naseem, will open to a global fanfare. He has already experienced some of the razzamatazz of a big Jumeirah launch with the Burj Terrace earlier this year, which he says is “an incredible place” that will do well in its the new season just beginning.
But he is obviously keyed up about Al Naseem. “it’s going to be a fantastic property. The building technique meant we finished the inside of the property before moving to the outside. When the scaffolding comes down, you will see something splendid. It will be a premium offering, on a par with or slightly above Al Qasr. There is no other site in Dubai that can really compare with the Madinat resort,” he says.
Spoken like a true Jumeirah hotelier.
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Published: September 27, 2016 04:00 AM