USA: Marriott Threatens Job Losses, But Opens Hotels

Marriott has told employees in the United States that furloughs and reduced work week schedules which began in April will be extended through to October.

The decision was taken as the coronavirus pandemic continues to slow demand for travel.

The financial impact of the pandemic is more severe than 9/11 and the 2008 financial crisis combined, Marriott said.

The company is rolling out a voluntary redundancy program for on-property and above-property staff in the United States who may choose to leave.

Similar voluntary programs are being considered in other parts of the world.

Given the company’s expectation that prior levels of business will not return until beyond 2021, the company anticipates a significant number of above-property position eliminations later this year, added a statement.

The company is not able at this time to predict how many associates will be affected by these separations or any resulting charges or cost savings.

Marriott has reopened all of its hotels in China and the group says it has seen a recovery in business travel.

The world's third largest hotel chain has 350 outlets across China and says that occupancy rate is now at 40%.

Marriott gave an upbeat statement on Monday about its business in China as it emerges from coronavirus lockdowns.

Last week it said the financial impact from the pandemic has been more severe for the hotel chain than 9/11 and the 2008 financial crisis combined.

Marriott chief executive Arne Sorenson said the occupancy rates at its Chinese hotels had been as low as 7% in late January when China was at its peak of cases.

Mr Sorenson told a travel conference: It's not just leisure travel growing, but it is business travel. Chinese are flying again.

However, he warned that occupancy might not recover to pre-coronavirus levels for several years.

Marriott said demand for hotel rooms in the US is also recovering but is currently only about half the level of its China properties at 20%.

The hotel group, which owns about 30 brands including Ritz-Carlton, St Regis and Sheraton, has extended furloughs for employees and reduced working weeks until early October.

Given the company's expectation that prior levels of business will not return until beyond 2021, the company anticipates a significant number of above-property position eliminations later this year, it said in a statement.

Rival Hilton reopened all of its 255 hotels in China two weeks ago and introduced a CleanStay initiative to protect employees and guests.

The hotel and travel industry in China were among the first to be hit from the coronavirus outbreak, and look to be the slowest to recover as businesses and factories reopen across the country.

Last month, Shanghai Disneyland reopened its gates although it introduced strict social distancing rules and limited daily visitors to about 24,000, compared to its pre-pandemic level of 80,000.

Within the United States, the world’s largest hotel brand Marriott is seeing occupancy rates rise as the travel industry begins to inch toward recovery, surpassing 20% among its open properties.

Crossing over 20% occupancy is a meaningful improvement from where we were before, but it is a long way from where we need to get to, Marriott International president and CEO Arne Sorenson said today at a travel conference hosted by Goldman Sachs.

That uptick is similar to the incremental climb reported by the airline industry ahead of Memorial Day weekend, traditionally one of the busiest travel times of the year.

Sorenson said most of Marriott’s occupancy growth was from drive-to markets, which is in line with expectations that domestic local travel will return well before international travel.

Extended stay hotels have been less hard-hit than the rest of the hospitality industry, with some seeing occupancy rates in the 30% to 40% range.

The Residence Inn brand would be performing better than the Courtyard brand, and leisure markets are performing better than the others, Sorenson said. It’s a steady move forward.

Despite the inklings of recovery, Marriott announced last week that it would extend furloughs that began in April through Oct. 2. Sorenson commented on this during the conference, noting that in addition to on-site workers, the company had furloughed two-thirds of its corporate staff.

It would have been incomprehensible before Covid-19. We know we won’t be able to bring everybody back, Sorenson said.

Meanwhile, in China, where all of Marriott’s 350 outlets have fully reopened, hotels and inns are crossing 40% occupancy rates as restaurants and businesses also begin to return.

It’s a big enough country where you can’t have those numbers without seeing leisure and business travel growing, said Sorenson. We are seeing steady improvement.

Like the United States, China is a domestic travel market, and its recovery could foreshadow where the U.S. market is headed.

With occupancy down and travelers concerned about health and sanitation more than ever—Hilton has partnered with Lysol, while Marriott launched its own cleanliness council—Sorenson said the new cleaning initiatives could impact revenue.

On the cost side, we will spend more on cleaning between guest stays than we spent before Covid-19, Sorenson said.

Think about the electrostatic sprayers we’re rolling out globally, which will intensify that cleaning—there is a cost to the equipment, there is a cost the materials that are used, and there is a labor cost associated in that incremental step.

But, we think it is imperative we do it to deliver to our guests a safe room.

The initiatives may not last forever, Sorenson noted, but will be maintained as long as Covid-19 is any way relevant to decisions we’re making about travel.

USA: Marriott Workers On Strike

Marriott International hotel employees on strike in Chicago have been joined by thousands of workers in San Francisco and Boston, who are picketing the company in a bid for higher wages and improved benefits.

Marriott has 850 company-managed hotels in the U.S. and Canada. It has 140,000 managed employees in the USA.

Workers at all seven of Marriott’s hotels in Boston—an estimated 1,500 employees—have walked away from their positions as part of what Unite Here Local 2 union organizers are calling the first ever hotel strike in the city.

The hotels affected by the strike include the Ritz Carlton, Boston; the Westin Boston Waterfront; and the Sheraton Boston.

The company declined to address the union’s specific demands but said in a written statement that it is disappointed that Unite Here has chosen to resort to a strike instead of attempting to resolve these disputes at the bargaining table.

While the union is not opposed to technology, it is asking for workers to be involved in discussions over how automation is adopted.

We want to be equal partners so we have a voice in how that technology can be supportive of workers rather than disruptive.

“During the strike our hotels are open, we have contingency plans in place and are activating those plans. We stand ready to serve our guests,” the company said. “While we respect our associates’ rights to participate in this work stoppage, we also will welcome any associate who chooses to continue to work.”

Leaders of Unite Here Local 26 claim its members can no longer afford to live and work in Boston due to stagnated wages, and argue that Marriott can afford to increase worker pay.

The union claims many workers are forced to take on more than one job, and new contract proposals from Marriott fail to improve the situation. In a statement, Marriott said its new contract proposal for union workers is in line with what was expected.

We are disappointed that Unite Here has chosen to resort to a strike at this time. Marriott’s current economic proposal matches the economic terms in the parties’ last contract, which included the largest increases in the parties’ bargaining history, a spokesperson from Marriott said in a statement.

During the strike our hotels are open, and we stand ready to provide excellent service to our guests. While we respect our associates’ rights to participate in this work stoppage, we also will welcome any associate who chooses to continue to work.

In Northern California, Unite Here Local 2 is leading roughly 2,500 Marriott hotel workers in picketing outside of seven hotels in downtown San Francisco.

These properties are the Marriott Union Square, the Palace Hotel, the W San Francisco, the Westin St. Francis Union Square, the San Francisco Marriott Marquis, the Courtyard San Francisco Downtown and the St. Regis San Francisco.

Workers at the San Jose Marriott have also joined in the strike.

For too long Marriott workers have struggled to get by, forced to work multiple jobs, sustaining workplace injuries, and having their hours cut, just to get by, D. Taylor, president of the Unite Here union, said in a statement.

Today, thousands of Unite Here workers are in the streets striking Marriott across the country because Unite Here workers believe one job should be enough to live on.

Meanwhile, strikes are ongoing at nine downtown Chicago hotels nearly a month after workers walked out. Marriott reached an agreement with the union early in the process, but workers continue to picket at three Hyatt Hotels Corporation hotels and several others.

From Unite Here’s comments, the root of these strikes lie in economic discrepancies that the hotel industry is well aware of.

In mid-September, members of the Hospitality Asset Managers Association said the labor market remains a major challenge for hotel operators, with rising labor costs and a need for skilled workers an ongoing concern.

These concerns were echoed at last month’s Lodging Conference, where Trump Hotel Group CEO Eric Danziger said the industry has failed to create positions that are attractive to U.S. workers.

The main reason these positions remain unattractive, he said, can be attributed to long hours, low pay and a lack of competitive benefits.

Furthermore, as of April 2018 the U.S. unemployment rate reached 3.9 percent, meaning dissatisfied employees have the option of seeking new positions, and labor unions likely believe unemployment figures place them in a favorable position to bargain.

In a statement, Ted Waechter, a spokesman for San Francisco’s Unite Here union, said the city’s workers have no plan to capitulate.

We’re going to stay on the lines until workers no longer have to work two or three jobs, Waechter said in a statement. This is not a limited-duration strike. We’re in it for the long haul.

USA: Hyatt Tightens Cancellation Policy

Hyatt has joined other major hotel groups in imposing a stricter cancellation policy.

According to a notice on Hyatt’s website, the company’s new default policy requires a guest to cancel a booking at least 48 hours in advance in order to avoid a cancellation fee.

The policy took effect for reservations made or changed after January 1, 2018.

Like its competitors, Hyatt suggested the policy change would allow it to manage guestroom availability more effectively.

The company didn’t say what the penalty for a late cancellation would be, but the industry standard is generally the cost of one night’s stay.

Hyatt added that the new policy is not binding on all its properties. Because each Hyatt hotel may continue to set its own cancellation policy based on local market dynamics and expectations, we always encourage guests to check the cancellation policy at the time of booking.

It will continue to be transparently communicated at the time of booking and in guest emails, the company said.

There’s an exemption for elite World of Hyatt loyalty members: Explorist, Globalist and Lifetime Globalist members will be able to cancel up to 24 hours in advance without a penalty when the hotel’s policy is a 48-hour cancellation.

It does not apply if an individual hotel’s policy requires cancellation more than 48 hours in advance.

Earlier this year, Marriott and Hilton both adopted minimum 48-hour advance cancellation policies, and InterContinental Hotels Group set a 24-hour advance cancellation standard.


Tourism Observer

USA: Hilton Offers Bonus Points

A day after Marriott/Starwood came out with a winter bonus points plan, Hilton has unveiled its own bonus earning program for Honors members.

Honors members register to participate.

For every stay during the promotion period, registered Honors members will get 2,000 bonus points.

Those who complete five stays during the period will earn an additional 10,000 bonus points, or a total of 20,000.

Members who travel a lot can keep racking up the extra points for additional stays during the January-April period.

There’s no cap on the number of points that can be earned, no minimum stay requirement, and no weekday/weekend differential.

The bonus offer applies for stays at all Hilton brands and locations except Hampton by Hilton Hotels in mainland China a total of more than 5,000 participating hotels worldwide.

Reservations already booked for stays during the promotion period also qualify, as long as the member is registered for Points Unlimited.

Hilton has published a page of frequently asked questions about the promotion on the Honors website.


Tourism Observer

Southeast Asia Shockingly Surpassed The Americas As The Chinese Luxury Traveller’s Choice

The Ritz-Carlton was the most popular hotel group in 2016, followed by the Banyan Tree, the Four Seasons, Mandarin Oriental, Fairmont and the Peninsula.

The popularity of membership schemes are a good indicator of luxury travelers’ overall levels of satisfaction with luxury hotels. Compared with 2015, the Ritz-Carlton membership scheme's popularity rose by 19%, taking the crown from the Hilton as the scheme of choice. Marriott fell to sixth. Younger travelers' preferences remain largely unchanged.

The popularity of the Ritz-Carlton's membership scheme is no surprise given its outstanding reputation among luxury travelers for high-quality service and luxurious standards.

The data according to the results of the 2017 Chinese Luxury Traveller report, issued jointly by Hurun Report and ILTM, focusing on the behavior and demands of China's high-end tourists, to understand and interpret the direction in which the industry is heading.

Holiday hotels are by far the most popular kind of hotel among respondents, gaining 81% of the vote.

Business hotels (18%), B&Bs (9%) and apartments (6%) received significantly lower preference rates.

The relaxing atmosphere, luxurious decor and the variety of high-end services provided by holiday hotels all work in their favor among respondents.

Hotel Service Most Important Consideration, Followed by Room with A View

Along with their growing enthusiasm for personalized travel services, China's high-end tourists are also attaching increasing value to quality of travel services.

Provision of personalized service is the most important factor when choosing a hotel for 49%. The following factors all prioritize hotel facilities and location; good views (48%), room cleanliness (44%), comfortable bedding (34%), good location (44%) and hotel style (36%) all constitute significant deciding factors.

Recomendations from previous guests through word of mouth (17%), value for money (15%) and membership benefits (10%) are of secondary importance to most luxury travelers.

Luxury travelers favor hotels with good locations that can provide them with personalized services, in combination with high-quality, comfortable rooms with good views.

Respondents no longer swarm hotels with leading reputations or simply convinced by discounts, as their tastes become more discerning.

Good service and spectacular views trump reputation and interior design.

Luxury Travelers In terms of accommodation budgets, the average nightly spend is nearly 3,800 yuan, with 28% spending 3,001-5,000 yuan, followed by 1,001-2,000 yuan with 26%.

Hurun Report and International Luxury Travel Market Asia (ILTM Asia) released The Chinese Luxury Traveller 2017: 60% of outbound luxury travellers willing to spend more than 3,000 yuan for a room night and travel business class or first class, adventure travel is the theme of choice for the three years, beach holidays on the rise, becoming a travel theme last year and luxury travel agencies flourish.

Customized travel services have begun to spread, with more than half of high-end travellers said they have experienced it.

A. Travellers prefer adventure tourism, it will be the luxury travel trend in the next three years.

Around World Travel, polar exploration, and outdoor adventures are themes for the Chinese luxury traveller in the next three years. Compared to the dominance of travelling for leisure in the past few years, this year, there is a marked increase in the Chinese luxury travelling for adventure. It should be noted that the Post-80s generation has displayed an increased interest in Africa and the Polar Regions, with numbers rising from 23% and 17% last year to 36% and 32% respectively this year.

B. Seasons significantly influence traveller’s choice of destination.

The time of year has a large bearing on the choice of location. In summer and autumn, the Post-80s luxury travellers possess a marked preference for island-hopping, with Phuket (27%), Maldives (18%) and Fiji (16%) and China's Sanya (16%) are the most popular choices. In winter and spring, Australia (16%) and Phuket (18%) are popular among sun-worshippers, while ski enthusiasts flock to Japan (32%), Canada (8%) and Switzerland (7%) also are traveller’s most likely destination.

C. Island with a Beach

Although Leisure at 41% was still the most popular vacation theme, polar exploration and outdoor adventures have continued their momentum from the past two years and rank second (31%) and fourth (20%) respectively. As a new option in this year’s study, island holidays were the dark horse of vacation themes and surpass both cruises (13%) and self-drive holidays (14%) and other traditional modes of travel to rank third. Island holidays are especially popular among the Post-80s generation and rank first with almost fifty percent (46%).

D.Southeast Asia and Europe are the outbound destination

Last year, Europe and Southeast Asia have grown in popularity as a destination accounting for 45% and 44% of respondents respectively. In just two years, Southeast Asia has successfully surpassed the Americas become the Chinese luxury traveller’s new choice, displaying a shocking 34% increase in millennial favour and jumping from last year’s fourth place to take the crown this year. Rupert Hoogewerf, Hurun Report Chairman and Chief Researcher said: “In the past years, Chinese luxury travellers have gone abroad an average of 3.3 times and stayed for an average of 27 days, with tourism increasing 5% to reach 69%”.

E. Hotels.

Luxury hotels are still the first choice for China's luxury travellers. The Ritz-Carlton and Four Seasons hotels are the most popular choices, ranking first and third. Boutique hotels are increasingly favoured, with Banyan Tree jumping from sixth place last year to fourth place this year, while Aman entered the top ten in seventh place.

Hilton is the “Most Popular Luxury Business Hotel” title, with Shangri-La, Sheraton, and top ten newcomer Marriott following closely after. The hotel of the most luxury traveller members is also The Ritz-Carlton, with the popularity of the brand experiencing a 19% increase over the last two years, taking the crown from Hilton.

In two years however, Marriott drop from second to sixth. Rupert Hoogewerf said, “Compared to airline memberships, hotel memberships do not hold as much value”.At 81%, resorts are overwhelmingly popular among luxury travellers and are their favourite type of luxury accommodation. Business hotels (18%), bed and breakfasts (9%), and apartment hotels (6%) are also preferred, but by a much smaller margin of travellers.

60% outbound luxury travellers spend more than 3,000 yuan per night. 32% of luxury travellers have accommodation budgets of over 5,000RMB per night. Humanized Service is the most important consideration, followed by a good view of the room.

At 56%, local cuisine is the most popular hotel restaurant cuisine option for Chinese luxury travellers. Japanese and Cantonese cuisine follow after by 32% and 31% respectively. French cuisine, Italian cuisine and Sichuan cuisine are all topped the list ten, while the Korean cuisine and hot pot did not in top ten.

Private dining room is receiving more attention as venues for private banquets and business dinners.
Accommodation sharing is still in its early stages in the luxury market. Private home-stay options like Airbnb are selected by only 25% of respondents, trailing behind the boutique hotel (48%) and the cruise (45%). 69% of respondents remain neutral or will not explore home-stay in the next three years.

F.China's luxury travellers love comfort when they travel.

61% of respondents, on their most memorable trips, travelled in business or first class. Air China has the most popular membership scheme among domestic airlines (54%), with China Southern Airlines (22.4%) and Cathay Pacific (21.9%) coming in after.

Among foreign airlines, Emirates and Singapore Airlines both run ahead of the pack at 23% and 22% respectively, benefiting from their reputations for offering both cost-effective and high level services. The fact that Singapore and Dubai airports are such important hubs for flight transfers also contribute to their popularity.

G.Quality Of Travel Itineraries

Customized travel services start to spread, with agencies placing a strong emphasis on the quality of travel itineraries to retain customers.More than half of luxury travellers (58%) said that they have experienced customized travel services. They are partial to travel agencies that provide well-designed itineraries, personalized services, and are actively problem-solving, placing 59%, 55%, and 49% of emphasis on each aspect respectively.

The emphasis placed on problem-solving ability of travel agencies has experienced an 11% increase in two years. Agencies in “Hurun Mainland China Outbound Luxury Travel Agencies 2017 Top 12” ranking include 8 Continents, Diadema, D-Lux Travel*, CITS Amex, HHtravel, My Tour, Magic Travel, Ctrip, Zanadu, CITS, CTS, and CYTS.

Agencies in the “Hurun Hong Kong Outbound Luxury Travel Agencies 2017 Top 6” include Wincastle Travel Limited, Cathay Pacific Holidays, Charlotte Travel*, American Express, Swire Travel, and Westminster. Agencies in the “Hurun Taiwan Outbound Luxury Travel Agencies 2017 Top 6” include One Style Tour*, Seascape Escape, Let’s Travel*, American Express, International Travel Information Services, and Lion Travel. (In alphabetical order, *new to list).

H. Travel retail.

While on holiday, Chinese luxury travellers like to purchase cosmetics (45%), local produce (43%), bags and suitcases (39%), clothes and accessories (37%), and jewellery (34%). Other than local produce, the four other most popular purchase categories are all dominated by female consumers. Compared to numbers two years ago, there is a noticeable increase in the percentage of travellers who bought cosmetics. With regard to the purpose of the purchase, 76% of purchases are personal, while 47% of purchases are gifts, and 4% are purchased on the behalf of others.



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QATAR: Accommodation Options For FIFA World Cup 2022

Qatar’s 2022 FIFA World Cup Local Organising Committee (LOC 2022) and the Supreme Committee for Delivery & Legacy (SC) held an accommodation concept workshop in collaboration with Qatar Tourism Authority (QTA) at Al Bidda Tower, Doha, recently.

The workshop saw 40 hoteliers representing global, regional as well as local hotel brands come together to discuss accommodation options and opportunities for the 2022 FIFA World Cup Qatar.

Representatives from hotel groups that have properties under construction or currently in operation in Qatar attended the workshop, including Hilton Group, Marriott, Mandarin Oriental, Taj Group, AccorHotels, Hyatt, Langham, Millennium Hotels, Retaj Group, Mondrian and Katara Hospitality Group, to name a few.

Also in attendance were LOC 2022 deputy CEO Nasser Al-Khater,and SC assistant secretary general, tournament affairs, as well as senior representatives from QTA.

The aim of the workshop was to brief hoteliers on the World Cup accommodation infrastructure required for a variety of user groups, including FIFA officials and team base camp hotels for participating teams, referees, media and broadcasters.

The workshop also outlined the roles and responsibilities of hotels providing permanent inventory for the tournament, temporary accommodation options and workforce requirements in the months leading up to and during the tournament.

“Today was an opportunity for us to demonstrate our operational preparations to local, regional and international hotel brands and reinforce that the LOC, SC and FIFA will do everything we can to ensure we collectively deliver all that is necessary to host the best World Cup yet. Today proved very constructive for all involved," Al-Khater said.

He continued: At the heart of this World Cup is a commitment to showcase the hospitality and friendship of the Middle East. As a result, we are actively researching a range of concepts to ensure any fan traveling here in 2022 has a variety of options from which they can choose.

Whether they want a five or three star hotel, a room on a cruise ship or a Bedouin-style tent for camping under the stars, fans will be offered some truly unique options.

In addition to hotels, LOC 2022, QTA and the SC, the organisation responsible for delivering the infrastructure required to host the 2022 FIFA World Cup, have already confirmed that they are looking into a range of accommodation options to ensure travelling fans have a broad choice, with temporarily moored cruise ships located at Doha Port, temporary campsites in the desert, and a short-term letting system with an operating model similar to AirBnB, among the options being considered.

QTA chief tourism development officer Hassan Al Ibrahim, added: Tourist accommodation and hospitality are both a key component of staging a successful World Cup and a main pillar of the tourism industry. We are working closely with our stakeholders in the hospitality sector to ensure that they are fully prepared to support in the delivery of an exceptional tournament.

And, through our partnership with the Supreme Committee for Delivery & Legacy, we are embedding long-term sustainability into the sector’s development plans to guarantee a thriving tourism industry through and beyond 2022.

The Qatar 2022 LOC assumed its responsibilities in 2010 immediately after Qatar won the rights to host the 2022 FIFA World Cup. It focuses on operational planning, tournament preparedness and coordinating with FIFA on all competition-related matters.

The Supreme Committee for Delivery & Legacy (SC) ensures that all preparations for the 2022 FIFA World Cup align with Qatar’s other development imperatives, as described in Qatar National Vision 2030.

The SC is tasked with delivering stadia and other infrastructure in Qatar as well as incubating the Josoor Institute, a centre of excellence for the sports and events industries in the Middle East.

BAHRAIN: Increasing Hotel Capacity By 4,000 Rooms

Bahrain will receive 15 new hotels, valued at $10 billion, by 2020, according to a statement from the Bahrain Economic Development Board (EDB) on Wednesday.

Brands like The One&Only, Fairmont, The Address, and Wyndham are set to mark their entry in to the Gulf country over the course of the next three years.

These hotels will add to Bahrain’s existing portfolio of over 190 hotels and resorts. This includes 18 five star hotels and 48 four star hotels. In total, the country’s hotels currently offer a capacity of 16,500 rooms.

In a separate statement, Khalid Al Rumaihi, Chief Executive of the EDB, said the new hotels were expected “to increase hotel capacity by around 4,000 rooms in the country by 2020 and fill gaps in the market.”

“These developments will both help to meet rising demand and attract new visitors to the kingdom. Bahrain showed strong growth in tourist numbers in 2016, witnessing a 6 per cent increase in the number of tourist arrivals,” he added.

Bahrain received 12.2 million people in 2016, and in 2015, the kingdom’s tourism sector accounted for 6 per cent of the total GDP, contributing revenues of $1.9 billion to its economy.

The country’s tourism market is predicted to grow at a compound annual growth rate (CAGR) of 4.8 per cent.

Following Marriott International’s announcement that they would be opening 15 new luxury properties across the region, the company’s president for the Middle East and Africa said on Wednesday that despite some oversupply concerns, he sees huge opportunity in the market.

“Whilst some of the Middle Eastern markets appear to be oversupplied, the fact of the matter is the ratio of branded rooms to population is exceptionally small,” Alex Kyriakidis, President and Managing Director of Marriott International, Middle East & Africa, said.

Kyriakidis said that Marriott would add 60,000 rooms across the region between now and 2022.

The majority of these, he said, would be located in the UAE, Saudi Arabia, and Egypt.

Regarding Saudi Arabia, Kyriakidis said “there is a pent-up demand for travel”, adding that “you have religious tourism, which has an exponential growth trajectory with the Muslim population growing around the world, in addition to domestic travel.”

“The kingdom is a huge focus for us, particularly the holy cities,” he said.

Marriott currently operates 11 hotels across the kingdom, which has a population of 31 million people, including two Ritz-Carlton properties.

In the UAE, Kyriakidis sees Marriott International diversifying its business away from the “upper upscale” brands such as Marriott, Le Meridien, Sheraton, and Westin.

“We see lots of opportunity in the select segment of the market, to compliment the upper upscale and luxury, and make Dubai more affordable, particularly for families to visit,” he said.

The select segment is a term Marriott International uses to describe its midscale offering, including brands such as Courtyard Hotels, Four Points, and Aloft Hotels.

Kyriakidis added that the intention was to “diversify our product within the UAE.”

For Egypt, the senior official noted that travel to the country had been “marred by safety and security concerns.”

Nevertheless, he said that the company is seeing “a significant uptake in travel to the country now by virtue of the fact that its currency is not dollar pegged.”

In November 2016, Egypt devalued its currency by 48 per cent in an attempt to end its economic crisis, which Kyriakidis said had “made their country considerably more affordable for tourism” and in turn stimulated “demand from around the Arab world.”

Turning his eye to the UAE’s capital, he conceded that “we’re in a tough time right now because of the oil price,” but said that Abu Dhabi is “beginning to rethink its strategy about how to generate economic activity, and clearly leisure and tourism is at the heart of that.”

“We are thinking strategically about the capital,” Kyriakidis added.

Even as the hotels market in the Middle East and globally is seeing a strong shift from luxury to mid-range, the InterContinental Hotels Group (IHG) has not stopped expanding in the luxury segment of the market, although it is still strongly focused on the midscale side of the business.

The hotels group, largely known by its Holiday Inn, InterContinental and Crowne Plaza brands, is looking to bring its boutique lifestyle luxury brand, Kimpton Hotels & Restaurants, to the region.

This time it would be a unique offering in the luxury end of the market, says Pascal Gauvin, IHG’s Chief Operating Officer for India, Middle East and Africa.

“It’s an American brand. We are now starting to export it outside of America. We would love to start with Dubai in this region,” he told Gulf News in an interview.

IHG bought the brand in 2014, and started to take the Kimpton brand outside of the US only in January this year.

It has signed for a property each in Amsterdam, which is about to open sometime this year, and Paris, Gauvin said.

“We only want to do the big capitals for this band. And of course, for this region, we want to start with most probably Dubai and then take it to all the other big cities in the region.”

Asked if Dubai would see a signing for Kimpton sometime this year, Gauvin said: “I can’t tell you when we are going to sign one in Dubai. It depends on the investors’ appetite.”

He was quick to add that IHG has already in discussions with investors to bring the brand to this market.

“We are talking to some investors already. The ones that we have started seeing are really keen on exploring possibility with the brand. People who are interested are the ones who already know the brand from the US, and they are very glad that we have started exporting the brand,” Gauvin said.

Contrary to belief by some that the luxury end of the segment might be reaching a saturation point in a market such as Dubai and the overall region, Gauvin said he was optimistic about the growth in this segment.

“Luxury will always be luxury, because by DNA, this is where this region started and so we will remain quite strong in the luxury [segment] … but maybe a different luxury than what we see today. It’s more boutique lifestyle luxury more than the large brand luxury,” he said.

IHG has another lifestyle brand, Hotel Indigo, which caters to the upper scale of the market, and reflects the neighbourhood around, as Gauvin puts it.

“But Kimpton is the other way — it’s more inward thinking. So we want to cocoon them [the guests] inside the hotel. Restaurants here will play a very important part,” he said.

Hotel Indigo, meanwhile, is under construction in two markets in the region — in Dubai and Riyadh. “IHG is planning to bring new brands to this region,” Gauvin said.

IHG has 79 existing hotels in the Middle East with 26 in the pipeline. “In three to five years, they will all be open. And that’s 47 per cent growth,” Gauvin said.

“There is a diversification taking place in the market. And that’s why we are bringing in a lot of midscale brands such as the Holiday Inn, to Dubai in particular, but in the region in general,” Gauvin said. “We were an emerging market for many years, and it’s maturing [now], especially the UAE, specifically Dubai. So it’s really time to focus on our midscale brands.”

He added that IHG would continue to expand its InterContinental and Crowne Plaza brands.

A surge in Airbnb-driven short-term bookings eating into Dubai’s hotel industry margins? Not likely as there is enough space to accommodate all of the demand — and not necessarily competing — from the various guest categories, according to findings by the consultancy PwC.

“It’s the Generation Z that is so taken up with a “shared economy”,” said Martin Berlin, Middle East Partner and Global Deals Real Estate Leader at PwC. “This is the audience that will find a stay with an Airbnb app most appealing; but this is effectively creating a user base in cities where they didn’t exist before or wasn’t fully developed.”

PwC has issued its Megatrends report on the hospitality sector, where it defines the user groups the hospitality industry should be planning for — the “silver generation”, the millennials and Generation Z. And each group has their marked preferences on where they want to make a room booking and how they want to make it.

Until now, the millennials and the Genz Z born after 2000 were clubbed together under the impression that their tastes bore close resemblances and with little differentiation. But the PwC report prefers to see some subtle differences between them.

“Although there is limited knowledge about the travel preferences of the Gen Z tourist, it is predicted that due to higher access to information and higher education levels, this travel segment will bring forth a new age of innovation within the travel and tourism industry,” the report states. While Gen Z would prefer non-traditional hotel concepts such as Airbnb, the millennials — more so those further up on their career paths — are “partial to smaller boutique brands and shared economy structures such as Airbnb”.

But the region’s hotel industry will still have a fight when it comes to retaining their hold on the business traveller. There are options opening up via short to longer term staying options offered by non-hotels for a corporate guest.

The PwC report reckons as much. “The hotel industry’s prized possession — the business traveller — is soon to be targeted by Airbnb,” it states. “Hoteliers need to take strong proactive action to retain business travellers and attract customers across all ages and demographics.

“This would require adapting their services to become more consumer-centric in order to create unique guest experiences. Hoteliers also need to invest in creating strong identities for smaller lifestyle chains rather than larger cookie-cutter brands. It is important for the hotel industry to be proactive rather than reactive when it comes to locking horns with this disrupter.”

Dubai’s developers are changing tack, with a horses-for-courses policy rather than keep committing to hotels either too heavy with luxury trappings or a bare-bones budget option. Damac has now introduced investment options on hotel apartments overlooking its Trump golf course, with prices starting from Dh395,000.

Meraas, the Dubai Government owned master-developer introduced four concepts in one go as part of its drive into developing a hospitality presence.

According to Berlin, “Dubai will still be a top attraction for the “silver” tourist, and with their preference for longer term stay options. The laws on short-stay homes have already been passed in Dubai and it’s just a matter of time before other Gulf cities come with their own versions to govern this category. It will only mean further growth opportunities.”

Even on how marketing campaigns should approach them, Gen Z are overtly dependent on connectivity while millennials want to know more — and are not immune to influence by — social media.

For Middle East hoteliers, there are lessons on marketing tactics they will need to imbibe. “The shift from the intermediaries to the influencers is one of the largest marketing shifts the travel and tourism industry has foreseen,” the report notes.

“The Gen Z and the millennial tourists are no longer swayed by travel brochures but are most likely to make decisions based on social media influence. Therefore, it is imperative for players in the travel and tourism industry to increase the importance of social media platforms in their marketing strategies.”

Starwood & Marriott Merger Approved Without Any Conditions

Chinese regulators granted antitrust approval to Marriott’s acquisition of Starwood, the last remaining hurdle to closing the merger.

The chains said they expect the deal to close before the market opens in New York.

The approval follows Chinese authorities’ decision, which the companies announced Aug. 8, to take an extended look at the merger for up to 60 more days. The regulators made their decision before the Oct. 8 deadline expired.

There was some suspicion that the extension may have been motivated by the Chinese government and/or regulators’ desires to extract divestitures or other assets from either Marriott or Starwood during the approval process. However, a Marriott spokesperson said, “The transaction was approved without any conditions.”

Marriott and Starwood had said all along that they expected the $12.2 billion deal to go through even as it had sailed through all other regulatory approvals.

The deal, when it closes later this week, will create the largest hotel chain in the world with 1.1 million rooms, spread out over nearly 30 brands.

The road to closing this transaction, which Marriott and Starwood initially announced in November 2015, has taken numerous twists and turns, including an unexpected bidding war with China’s Anbang Insurance Group and its consortium in March 2016. Anbang eventually dropped out.

The extended antitrust review by the Ministry of Commerce of the People’s Republic of China was the latest and last hurdle.

Regulators in dozens of other countries and jurisdictions around the world, including the U.S., the European Union, Saudi Arabia and Mexico, had previously decided not to stand in the way of the mega merger.

USA: Commencement Of Vertical Construction At Gaylord Rockies Resort And Convention Center

Marriott International, Inc. (NASDAQ: MAR), RIDA Development Corp. and Ares Management, L.P. (NYSE: ARES), held a VIP ceremony yesterday on the 85-acre site of the two million-square-foot Gaylord Rockies Resort and Convention Center to celebrate the recent closing of a $500 million construction loan as well as the commencement of vertical construction. The private event was attended by its developers, finance partners, city and state officials, Marriott executives and project supporters.

Gaylord Rockies Resort and Convention Center
Master of Ceremonies for the event, Ira Mitzner, President of RIDA Development Corp., stated, “The closing of the Gaylord construction loan and the commencement of vertical construction will bring over 10,000 construction jobs and over 2,500 permanent jobs to the state of Colorado. This $800 million project represents the finest of public-private partnership, and will create a strong and unique economic engine for the State of Colorado for many decades to come.”

“Today’s exciting event represents another milestone in the construction phase of the Gaylord Rockies Resort and Convention Center, which we are thrilled to be involved with,” said Andrew Holm, Managing Director in the Ares Real Estate Group. “In partnering once again with RIDA Development and Marriott and with the support of the City of Aurora and the State of Colorado, we are confident in the lasting positive impact this project will have on the local economy and tourism industry here.”

Centrally located in Aurora, Colorado – a city known for its arts culture, sports and recreation, the resort will be less than 10 minutes from Denver International Airport with sweeping views of the Rocky Mountain Front Range. Once completed in late 2018, Gaylord Rockies will be the largest combined hotel and convention center in Colorado.

Gaylord Rockies Crystal Lake At Grand Lodge
Mayor Steve Hogan attended the event and stated, “On behalf of the City of Aurora, let me say we are excited about the possibilities of the Gaylord Rockies Resort and Convention Center. We offer our congratulations and thanks to RIDA Development, Ira Mitzner, and everyone else involved in making this wonderful addition to Aurora, metro Denver, and Colorado, a reality.”

Marriott, together with the owner and development partnership led by RIDA Development and Ares Management, previously announced the December 2015 closing on a $500 million construction loan from Wells Fargo Bank as lead agent for an eight bank consortium including co-lead agents Bank of America and Bank of Nova Scotia, as well as Sumitomo Mitsui Bank, Credit Agricole, CIT Financial, MidFirst Bank and US Bank.

“Gaylord Rockies Resort and Convention Center is a significant project, not only for Aurora and the Denver area, but for the entire Rocky Mountain region,” said Mark Lanspa, Executive Vice President in Wells Fargo Commercial Real Estate’s Hospitality Finance Group. “On behalf of Wells Fargo and our entire bank group, we are proud to partner with our long-standing customers, RIDA Development, Ares Management and Marriott International, on this exciting project and look forward to seeing its success.”

Concurrently, a $530 million guaranteed maximum price construction contract was entered into with Mortenson Construction and WELBRO Building Corporation allowing the project to begin vertical construction last month. Construction of the Gaylord Rockies Resort and Convention Center is expected to result in the hiring of more than 10,000 construction workers for one of the largest hospitality industry projects to break ground in the U.S. in 2016.

The Gaylord Rockies Resort and Convention Center will feature:

1,507 luxurious guest rooms, including 114 suites
Over 485,000 square feet of exhibition, meeting, pre-function and outdoor space
A Grand Lodge with spectacular views of the Rocky Mountain Front Range
8 dining outlets
Indoor/Outdoor Pool Complex with water slides and lazy river
Outdoor basketball and tennis courts, walking trails and putting greens
Relâche Spa and Salon, plus state-of-the-art fitness center.

Under a long-term contract, Marriott will manage the Aurora hotel and convention center, which is expected to lead to the hiring of approximately 2,500 permanent direct and indirect employees of the hotel. The economic impact of the project is estimated at more than $7 billion of economic activity for the State of Colorado, with more than 80 percent of guests expected to be net new visitors to the state.

Speaking at the ceremony on behalf of Marriott International was David Marriott, Chief Operating Officer, Americas Eastern Region, who stated, “Through the power of both the Marriott and Gaylord Hotels brands, we’re excited to funnel first-time group business into the state of Colorado by adding to our portfolio a western region resort and convention hotel of this magnitude. With its extraordinary environments, first-class entertainment and services, and the convenience of everything in one place, Gaylord Rockies will be a destination within itself offering memorable experiences to group and leisure guests alike.”

Adding to the excitement of yesterday’s event, Bonnie Godsman, CEO of GAMA International, was on hand to sign the first contract for more than 5,100 room nights. GAMA’s 2024 Annual Leadership and Management Program (LAMP) will bring in more than 3,000 financial services field leaders and industry executives representing more than 50 companies from 23 countries. The association’s meeting is estimated to generate $1.5 million from rooms revenue with an additional estimated $1.5 million in out-of-room spend. Due to the group’s size, GAMA has never met nor considered meeting in Colorado.

“My hearty congratulations to Marriott and Gaylord Hotels on the announcement of their Gaylord Rockies property,” said Godsman. “I am ecstatic to invite my organization and its members to experience our annual conference in this exciting new property in the beautiful city of Aurora.

The pre-opening sales office recently opened adjacent to the resort construction site in Aurora. Michael Kofsky, Director of Sales and Marketing, will lead a team with the goal of pre-booking more than 1.25 million room nights prior to opening. The hotel is expected to bring over two million visitors to the City of Aurora and the State of Colorado during the first several years after opening.

ETHIOPIA: Ethiopia On Her Way To Become Chain Hotel Hub

Ethiopia is ranked among the top 10 leading markets in Africa for international chain hotel developments while Egypt leads the group with 18 new hotel chains being developed. Currently, Ethiopia gripped 8th position with 84 per cent hotel development pipeline and under construction disclosed the survey presented at the Africa Hotel Investment Forum (AHIF) in Addis Ababa.

The hotel business boom in Africa is topping the global market. Taking its share from the African market, Ethiopia has eight new global brand hotels under pipeline. Across the continent, 270 hotel chains are in the pipeline with the expected number of rooms, exceeding 30,000. Egypt is followed by Morocco, Nigeria, Algeria, Tunisia, South Africa, Libya, Ethiopia, Kenya and Rwanda. Although the leading nations are mainly from northern Africa, countries in Sub-Saharan Africa (SSA) are gaining momentum in hotel development projects.

The information obtained from Bench Events indicates that, out of the top 10 global hotel operators, Hilton Worldwide leads with about 7,250 rooms in new hotels. However, Marriott leaps forward, leading with the development of 36 new hotels across the continent. Hotel Partners Africa also identified the top ten opportunities for investors keen to develop hotels in Africa. In West Africa, Nigeria presents the biggest opportunity, with the strongest economy on the continent with 34 branded hotel bedrooms per million population. Ghana with 59 bedrooms and Cote D’Ivoire with 61 bedrooms also present great opportunities with very strong demand.

Rwanda, Angola, Tanzania, Mozambique and Zambia present 29, 48, 63, 79, 122 bedrooms respectively. Despite the existence of great development potential in the region, the political and other risks tend to suggest that new international investment will be limited in the near future. However, Libya continues to attract investors despite the political unrest. Project returns also identified to bring high revenue.

Hotel values in the majority of these locations have been strongly growing. In African countries, 76 per cent of hotel investment returns have been higher than combined averages across other property investments. African countries have shown significant annual growth over the last six years including Zambia and Ghana at 6.5 per cent, Tanzania 6.3 per cent and Angola 6.2 per cent from the most under-supplied opportunity markets. Ethiopia is also listed among the top markets with several deals in process and new chain hotels venturing into the untapped hotel development. Hilton signed a deal for upscale Hilton Awassa Resort & Spa which is expected to open in 2020. Marriott International in partnership with Sunshine Business, opened Africa’s first Marriott Executive Apartments in Ethiopia’s capital.

“Hotel developments prove that it’s an exciting time for Ethiopia which is being transformed from the traditional market to a much developed and less riskier business environment. Investment by major operators evidenced that luxury is coming to the growing nation,” said Estelle Verdier, Managing Director of Jovago East and Southern Africa.

On the other hand, hosting the glamorized and biggest AHIF, which was attended by major global industry players and policy makers, placed Ethiopia in a better position to attract more investments. During the event, major brand operators such as Wyndham Group, Ramada Addis, Inter Continental Group, Accor Group, Western International Inn linked management agreements to run star-rated hotels which would open doors between end 2015 and 2018. The AHIF has also been seen as fresh negotiations expected to bring more chain hotels to Ethiopia.

HUNGARY: The Elizabeth Park Hotel Budapest, A Ritz-Carlton Partner Hotel Opens

The Ritz-Carlton Hotel Company, L.L.C. is delighted to announce that from 1st September The Elizabeth Park Hotel, Budapest, a Ritz-Carlton Partner Hotel will be managed by the company and following an extensive renovation program, the hotel will be re-launched as The Ritz-Carlton, Budapest in Spring 2016.

The centrally located, 198-room hotel will undergo a comprehensive renovation which includes the addition of The Ritz-Carlton Club, new luxury suites and fresh concepts at the hotel's dining outlets.

"It is an honour to bring The Ritz-Carlton experience to Hungary at the heart of this vibrant capital city. We are looking forward to opening the newest European hotel in Budapest in 2016," said Herve Humler, President and Chief Operating Officer.

"We are delighted to be partnering with the Ritz-Carlton for such an exquisite property to build on our unique portfolio of hotels. We are bringing together two of the best names in the business, both dedicated to offering world-class luxury and hospitality. We look forward to welcoming guests to experience the renewed property in early 2016," said Mohammed Al Habtoor, Vice-Chairman and CEO, Al Habtoor Group, the hotel's owner.

Marcus A. Loevenforst has been appointed as the General Manager to lead the team of Ladies and Gentlemen at this historic location and oversee the transformation of the hotel into the first Hungarian property for The Ritz-Carlton portfolio. Mr. Loevenforst, originally from Germany, brings more than 23 years of luxury hospitality experience spanning several continents and locations, including Stuttgart, Miami, San Francisco, Cleveland and Toronto, and with The Ritz-Carlton Hotel Company in Berlin, Bahrain, Moscow and Naples. Most recently his role was as Vice President, Operations for EDITION hotels.

The Elizabeth Park Hotel, Budapest is located on St Erzsebet Square with commanding views over St Stephen's Basilica in the heart of the city, only a short distance from the business district and shopping areas. The Hungarian capital is home to an extensive World Heritage site, including the banks of the River Danube, the Buda Castle quarter, Andrassy Avenue and the Millennium Underground railway, the second-oldest metro line in the world. It is one of Europe's most beautiful cities and a popular tourist destination known as "The City of Spas" with many natural thermal and medicinal springs.

About The Ritz-Carlton Hotel Company, L.L.C.
The Ritz-Carlton Hotel Company, L.L.C. of Chevy Chase, Md., currently operates 86 hotels in the Americas, Europe, Asia, theMiddle East, Africa, and the Caribbean. More than 30 hotel and residential projects are under development around the globe. The Ritz-Carlton is the only service company to have twice earned the prestigious Malcolm Baldrige National Quality Award which recognizes outstanding customer service. For more information, or reservations, contact a travel professional, or visit the company website at www.ritzcarlton.com. The Ritz-Carlton Hotel Company, L.L.C. is a wholly owned subsidiary of Marriott International, Inc. www.marriott.com / www.news.marriott.com

The Ritz-Carlton Hotel Company, L.L.C. is delighted to announce that from 1st September The Elizabeth Park Hotel, Budapest, a Ritz-Carlton Partner Hotel will be managed by the company and following an extensive renovation program, the hotel will be re-launched as The Ritz-Carlton, Budapest in Spring 2016.

The centrally located, 198-room hotel will undergo a comprehensive renovation which includes the addition of The Ritz-Carlton Club, new luxury suites and fresh concepts at the hotel's dining outlets.

"It is an honour to bring The Ritz-Carlton experience to Hungary at the heart of this vibrant capital city. We are looking forward to opening the newest European hotel in Budapest in 2016," said Herve Humler, President and Chief Operating Officer.

"We are delighted to be partnering with the Ritz-Carlton for such an exquisite property to build on our unique portfolio of hotels. We are bringing together two of the best names in the business, both dedicated to offering world-class luxury and hospitality. We look forward to welcoming guests to experience the renewed property in early 2016," said Mohammed Al Habtoor, Vice-Chairman and CEO, Al Habtoor Group, the hotel's owner.

Marcus A. Loevenforst has been appointed as the General Manager to lead the team of Ladies and Gentlemen at this historic location and oversee the transformation of the hotel into the first Hungarian property for The Ritz-Carlton portfolio. Mr. Loevenforst, originally from Germany, brings more than 23 years of luxury hospitality experience spanning several continents and locations, including Stuttgart, Miami, San Francisco, Cleveland and Toronto, and with The Ritz-Carlton Hotel Company in Berlin, Bahrain, Moscow and Naples. Most recently his role was as Vice President, Operations for EDITION hotels.

The Elizabeth Park Hotel, Budapest is located on St Erzsebet Square with commanding views over St Stephen's Basilica in the heart of the city, only a short distance from the business district and shopping areas. The Hungarian capital is home to an extensive World Heritage site, including the banks of the River Danube, the Buda Castle quarter, Andrassy Avenue and the Millennium Underground railway, the second-oldest metro line in the world. It is one of Europe's most beautiful cities and a popular tourist destination known as "The City of Spas" with many natural thermal and medicinal springs.

About The Ritz-Carlton Hotel Company, L.L.C.
The Ritz-Carlton Hotel Company, L.L.C. of Chevy Chase, Md., currently operates 86 hotels in the Americas, Europe, Asia, theMiddle East, Africa, and the Caribbean. More than 30 hotel and residential projects are under development around the globe. The Ritz-Carlton is the only service company to have twice earned the prestigious Malcolm Baldrige National Quality Award which recognizes outstanding customer service. For more information, or reservations, contact a travel professional, or visit the company website at www.ritzcarlton.com. The Ritz-Carlton Hotel Company, L.L.C. is a wholly owned subsidiary of Marriott International, Inc. www.marriott.com / www.news.marriott.com

The Ritz-Carlton Hotel Company, L.L.C. is recognized as one of the world’s leading luxury lifestyle brands. The Ritz-Carlton enjoys a global reputation for setting the gold standard with award-winning luxury hotels, residences, golf communities, elegant spas, innovative retail and acclaimed restaurants. The brand engages guests through unique, memorable and personal experiences that transcend luxury hospitality and create indelible marks in their lives.