Interview - Laurent A. Voivenel, Senior VP, Operations, Development for the ME, Africa and India, Swiss-Belhotel International
Interview

‘Mid-market opportunity’ highlighted, ‘Balancing Supply, Bridging the Gap’ discussed at Hotelier ME Conference in Dubai

Laurent A. Voivenel, Senior Vice President, Operations and Development for the Middle East, Africa and India, Swiss-Belhotel International, has been ranked for the 5th consecutive year in the MENA hospitality industry. The Hotelier Power 50 list by Hotelier Middle East recognises and celebrates the region’s 50 most influential hotel professionals for their outstanding performance.

With more than 32 years of experience, including 18 in the Middle East, Laurent focused on accelerating the growth of Swiss-Belhotel International in the region.

  • Elaboration on the opportunities :

The hospitality landscape across the region is developing at a rapid pace and we are keen to take advantage of this massive opportunity. Tourism performance in the main cities across the Middle East is expected to remain strong with the fruition of major infrastructure projects like airport expansions, relaxation of travel policies, increased global connectivity and growth of low-cost carriers, new leisure attractions, enhanced business facilities and year-long calendar of regional and international events. We are expanding our portfolio of brands across the region both in the upscale and the mid-scale segment.

  • Common existing misconceptions in regards to the return on investment and profitability of mid-market hotels :

There are many factors that make mid-market hotels a lucrative investment option for owners. Despite the strong demand, only limited budget hotels inventory is entering the market. It makes the supply and demand dynamics far more favourable for mid-market hotels, hence, giving investors a great opportunity to capitalise on. Moreover, lower cost of construction, operations and staffing for mid-market hotels contribute to greater profitability of projects and faster ROI. Since there are limited facilities, such hotels require less investment and take less time to build.

  • Key challenges holding back the development of mid-market hotels and how it can be overcomed :

Some sort of intervention from the authorities should be there regarding land allocation where mid-market hotels are to attract investors. The cost of land is prohibitively high or not available for budget hotels. Alternative construction methods like modular construction should be considered. To promote investment in mid-market hotel sector, flexible financial support infrastructure with increased lending from banks are needed. To establish the UAE as a sustainable destination, it is imperative to balance out the supply gap.

  • Requirements of modern travellers:

The millennial travellers are the key target for mid-market hotels and their preference is quality-driven, trendy and technology friendly hotels. Soon we expect to introduce in the Middle East Zest Hotels which is a fun and fresh budget hotel brand voted this year as Asia’s leading budget hotel brand at World Travel Awards.

  • Changing market dynamics:

The business is becoming more complex and competitive for operators who are grappling with multiple challenges. Market is being disrupted by new forms of competition like Airbnb. Guests’ profiles and preferences are changing too who are looking for greater value for money along with better quality, greater convenience and unique experiences.

  • New trends in owner and operator relations highlighted :

New patterns of ownership, finance and management are emerging. Contract terms are swinging in favour of owners who are primarily performance driven and are no longer satisfied with long-term capital appreciation. Operators need to understand better today’s owners who are far more involved in all areas of hotel operations from selection of general managers to driving social media.

  • Bridging the gaps between owners and operators?

Both the parties need to look at the equation differently. There is need for greater communication to build lasting relationships. It is important for operators to understand and listen to owners and react with solutions.

Innovation is the key in every aspect of the business. Alternative revenue generators should be developed. Owners must give operators a fair chance to implement new ideas with ample space and time.

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