The Savoy Hotel in London. It is owned jointly by Saudi Arabia’s Prince Alwaleed bin Talal and Qatar’s state-run Katara Hospitality. Kirsty Wigglesworth / AP Photo
The Savoy Hotel in London. It is owned jointly by Saudi Arabia’s Prince Alwaleed bin Talal and Qatar’s state-run Katara Hospitality. Kirsty Wigglesworth / AP Photo

Middle East books room in Europe’s top hotels



From the banks of the Thames in London to the sunny promenades of the Côte d’Azur, and from Frankfurt and Rome to the Balearic Islands, a revolution in hotel ownership and management has firmly taken root.

Thirty-six years after the Egyptian tycoon Mohamed Al Fayed unilaterally pioneered the phenomenon, buying one of Paris’ best-known hotels, the Ritz, Middle East hospitality interests are strongly represented in major European cities.

And, as the Parisian example demonstrates, it can turn perceptions upside down. An overseas visitor may consider London’s Savoy hotel as quintessentially English as Big Ben or Tower Bridge.

Yet it is owned jointly by Saudi Arabia’s Prince Alwaleed bin Talal and Qatar’s state-run Katara Hospitality. Prince Alwaleed’s Kingdom Holding investment company bought the hotel with HBOS – now part of Lloyds – in 2005 for £230 million (Dh1.3 billion).

Without Prince Alwaleed’s commitment, which preceded Katara’s substantial involvement announced in December last year when it bought Lloyds’ 50 per cent stake, the Savoy would have been unable to undertake the £220m makeover carried out during a three-year closure.

“Without the passion, personal interest and financial validation of the prince, it would not have happened at all,” Kiaran MacDonald, the general manager, said a few months after the reopening towards the end of 2010.

Mr MacDonald has not changed his mind, acclaiming the prince’s “long-term vision”, shared by his new Qatari partners.

For Prince Alwaleed, who also owns the George V hotel in Paris and the Plaza in New York. But insists he has no intention of offloading the 125-year-old Savoy, or the other two.

“I would never sell the George V, the Savoy and the Plaza,” he told The Sunday Telegraph in 2012.

The Savoy is operated by the Toronto-based Fairmont Hotels and Resorts, whose parent company, FRHI, is owned by the Kingdom Holding and Katara. It manages more than 100 Fairmont, Swissôtel and Raffles hotels – including the celebrated Singapore Raffles – in 30 countries.

The Savoy’s first full year of trading after reopening ended with pre-tax losses of £53.4m and, later, “going concern” warnings about future viability.

But these warnings have been removed following successful refinancing in October last year. Losses, with interest charges still wiping out an operating profit, were cut in the last published accounts, for the year ended December 31 2013, to just under £44m.

Meanwhile, in France, much of major investment from the Middle East is from Qatar and Katara has its own cluster of prestigious French names in its hotel portfolio.

In Paris, these include Le Royal Monceau Raffles and Pensinsula, both close to the Champs Elysées and the Arc de Triomphe, and the Buddha-Bar Hotel.

Another Qatari investment division, the Luxembourg-based Constellation Hotels, owns the Hotel du Louvre and Concorde Lafayette – now known as Hyatt Regency Paris Étoile – and Hotel du Louvre in the capital and two hotels on the French Riviera, the Martinez in Cannes and Palais de la Mediterranée in Nice.

The InterContinental Carlton Cannes, famous for its links with the annual film festival, is another of Katara’s hotels.

Beyond France and the United Kingdom, Katara – the name the ancient Greek cartologist Claudius Ptolemy gave Qatar in the second century – has luxury hotels in cities including Rome, Frankfurt, Amsterdam, Madrid and Milan.

The company’s reach stretches to Africa and South East Asia and back to Qatar, where seven hotels are under its ownership.

“None of this is surprising,” says Remy Rowhani, the director general of the Qatar Chamber of Commerce and Industry.

“The growth in hotel ownership is part of Qatar’s major development of non-carbon industries, which now account for more than 50 per cent of GDP. Diversification is the key and tourism is a strong growth area.”

Mr Rowhani was speaking on the sidelines of the recent Middle East Congress, in which The National was a media partner, held at the Jumeirah Carlton Tower in London.

As the venue’s name suggests, it is one of the eight hotels in Europe – among 22 worldwide – operated by the Dubai-based Jumeirah Group, part of Dubai Holding.

The group runs these hotels on behalf of third party owners but both operates and owns its “core Dubai hotels”, the Burj Al Arab, the three hotels within Madinat Jumeirah, Jumeirah Beach Hotel and Jumeirah Emirates Towers.

“The European market remains strong,” says Piers Schreiber, the group’s vice president for corporate communications.

“We have certainly seen robust demand into our portfolio of hotels in Europe, both for our business hotels, such as Jumeirah Frankfurt, and our destination or leisure hotels, such as Jumeirah Port Soller in Mallorca … Our London hotels are perennial favourites, especially among visitors from the [Arabian] Gulf region, but increasingly among travellers from the US.”

A study by BNP Paribas reveals European hotel investment enjoyed a record year in 2014, totalling €15.2bn (Dh61.62nbn).

The French bank’s analysts found investment in the five main markets – France, Germany, Italy, Spain and especially the UK – represented three-quarters of the total for Europe, which was up by 68 per cent overall on 2103.

The Gulf region was among the primary drivers of that growth, says Bruno Juin, the managing director of the BNP Paribas real estate hotels division.

“The 2014 hotel investment as driven by foreign capital; mainly from North America, the Middle East and Asia,” says Bruno Juin, the managing director of the BNP Paribas real estate hotels division.

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COMPANY PROFILE

Company name: Mozn

Started: 2017

Founders: Mohammed Alhussein, Khaled Al Ghoneim, Abdullah Alsaeed and Malik Alyousef

Based: Riyadh, Saudi Arabia

Industry: FinTech

Funding: $10 million

Investors: Raed Ventures, Shorooq Partners, VentureSouq, Sukna Ventures and others


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