JEDDAH — The prevailing economic weakness brought about by the ongoing regional conflict and the global drop in oil prices does not deter Mövenpick Hotels & Resorts from its planned expansion projects.
Andreas Mattmuller, CEO Middle East and Asia of Mövenpick Hotels, in a recent interview said despite the negative sentiments affecting many of the businesses, Mövenpick remains optimistic, saying that these economic issues increase the business challenges for the immediate term, “however we maintain a long-term positive view for the success of travel and tourism within the region and the Kingdom of Saudi Arabia. We are a very resilient brand and when we commit to a certain destination we keep on doing everything possible in order to boost the top-line and profitability of our hotels.”
He explained that the travel industry in Saudi Arabia largely revolves around religious tourism and pilgrims will continue visiting the country regardless of the current economic difficulties. The number of religious tourists is expected to rise from 17.5 million recorded in 2014 to between 25 and 30 million in 2025, which will be a boost to the country’s economy.
As a matter of fact, he disclosed the hotel’s plan to continue its expansion in Saudi Arabia, with the recent opening of Mövenpick Hotel Riyadh regarded as a milestone as it marked its 10th hotel in the Kingdom. “We are planning to open five new properties —Mövenpick Hotel City Star in Jeddah this year (2016), Mövenpick Residences Al Khobar, Mövenpick Hotel Financial District Al Riyadh and the recently announced Mövenpick Hotel Apartments Al Tahlia Jeddah in 2017, and last but not least Mövenpick Hotel Heraa Jeddah in 2018,” Mattmuller revealed.
Excerpts from the interview follow:
• Which region in Saudi Arabia offers the best growth opportunity for the hotel business? Why? How about in the Middle East?
Our hotels in the Kingdom of Saudi Arabia – specifically Makkah and Madinah are performing well and we are expecting a 15% growth in 2016 vs 2015 in occupancy levels due to the expanding number of religious tourists, and the country has heavily invested in property development and infrastructure to accommodate the growing number of religious tourists.
Projects such as the expansion of Makkah’s Grand Mosque, The Haramain High-Speed Rail network (which will run between the holy cities of Mecca and Medina through King Abdullah Economic City) and the passenger terminal at Jeddah’s King Abdulaziz International Airport, indicates that the market is growing, meaning Mövenpick is expecting an increase in demand and occupancy levels throughout the year.
As for the Middle East, Oman is a very important market for the industry. The government has reinvigorated plans for tourism developments throughout the country resulting in a remarkable growth in the industry. In 2014, more than two million tourists visited the country and the annual growth during the past ten years (from 2005-2014) stood at 7.4 per cent. Consequently, this progress is a call for international brands and operators to drive the development and help build the infrastructure.
• Restriction on pilgrim visa quotas has affected the religious tourism demand. What are the alternative clientele that you will pursue to increase your room occupancy and ADR as well?
We are witnessing an important increase in Saudi nationals travelling within the Kingdom for business and relaxation. The Kingdom’s drive to promote domestic tourism, encouraging Saudis to holiday at home, is achieving increasing success.
• Which market segment are you aiming at as you proceed with the establishment of new hotels?
We plan on expanding in Abu Dhabi, Fujairah and Ras Al Khaimah. One of our other main goals is to enter Oman, and we are looking at projects in Muscat, Sohar and Salalah. We are also looking at projects in Doha and Lusail in Qatar.
•With your increasing presence in the Middle East, what do you want to achieve as a whole by 2020?
Mövenpick Hotels & Resorts has a solid presence in the Middle East where it currently operates 30 hotels, which includes clusters in Saudi Arabia, the UAE and Jordan, as well as good reach across the GCC and the Arabian Peninsula. As we continue to grow, our strategy for 2020 is to have 45 hotels operating in the region. We are also very much focused on growing and launching additional Mövenpick hotels in different areas and destinations within the region where we currently are not present.
• Your quest for expansion seems to be unstoppable. What factors or issues would discourage or even force you to prevent from further expansion?
Ultimately our plan is to continue growing at a sustainable pace while ensuring that our values are embedded in all our new properties.
Maintaining the strength of our existing relationships and developing new long-term win-win relationships are at the core of our development plans. It is our aim to always align with the vision of our investors as this key aspect allows us to achieve our common objectives and goals in terms of financial returns, quality of service, guest satisfaction and employee fulfillment.
• Being a man of action, what would best describe your achievements? When would you say enough is enough? What irritates you most (as a leader)?
Giving the brand a significant foothold in this region is probably the biggest achievement. When I started, our regional portfolio included our existing hotels in Egypt and four hotels in Jordan. At the moment we manage 30 hotels in the Middle East and several key projects are under development in various countries.
The continued growth of our brand and organic expansion of our portfolio in the region is naturally an aspect that my team and I continue to pursue as primary goals. Of course this has to happen while making sure that our company values are embedded in all our new properties. With an eye on the future, our vision is to extend Natural Enjoyment to our guests and partners around the world.
We shall not stop developing our brand while we also strongly focus on the performance of our existing hotels. We shall always continue to develop our brand in key strategic locations.
