Accor performs well in the economy market

TTN presents its annual hotel and airline industry round up feature. New hotel openings continue throughout the MENA region and airlines welcome healthy competition as they see the opportunities - and the pitfalls - within the booming aviation business
An artist’s impression of the Ibis Salmiya in Kuwait City

Brand: Accor Hospitality Middle East
Spokesperson: Christophe Landais, managing director

How has 2007 fared for Accor Middle East?
By end October, we recorded a two digit profitable growth in terms of hotel revenue and a four per cent increase in occupancy versus the same period in 2006.
A further analysis reveals an excellent performance in the economy market. The Ibis World Trade Centre in Dubai surpassed our expectations this year by staying well ahead of the competition at 1.7 market penetration index (MPI).
In the mid-scale market, Novotel World Trade Center in Dubai, UAE and Novotel Al Dana Resort in Manama, Bahrain have performed well, reporting over 1.2 in terms of MPI and even competing directly with some upscale properties.
The Mercure brand has also fared extremely well.
The upscale market is notoriously competitive in Dubai, UAE, yet the Sofitel City Centre Hotel continues to fill rooms by offering value-for-money accommodation. The Palace, The Old Town, which opened in October 2007, marked the Sofitel brand’s first entry into the upper-upscale market in the Emirates.

What are the company’s plans for 2008?
The following new hotels are in the pipeline: Ibis Salmiya, Kuwait City with 175 rooms; Sofitel Jumeirah Beach Hotel & Resort, Dubai with 438 rooms; Novotel Port Saeed Dubai with 189 rooms; Ibis Port Saeed Dubai with 365 rooms; Sofitel Al Khobar, Saudi Arabia with 229 rooms; and Novotel Al Anoud, Riyadh with 166 rooms.

Are there plans to enter new markets?
Further to the opening of the Mercure Grand Karachi Airport in April 2007, Accor plans to increase its presence in Pakistan with the recent signing of the Novotel Lahore Airport and the upcoming signing of a new Ibis property in Karachi.
Oman is also a key development market for Accor; between 2010 and 2011 we plan to open several properties in the country, including one Sofitel, one Novotel and two Ibis hotels in Musca t and one Novotel and Ibis hotel in Sohar.
In Saudi Arabia we will see to contracts being signed for a Novotel hotel in Jeddah and Dammam.
Finally in Abu Dhabi, the Novotel Hotel and Residence is under construction, Novotel & Ibis Yas Island has been signed and another Novotel and Ibis project in Mussafah is to be signed in 2008.
We are also looking to develop our Pullman and Sofitel brands in Abu Dhabi. The launch of the Pullman brand will cater to the fast growing upscale segment in key cities in the Middle East. We have a short term objective of developing 12 new properties within the next five years.

What is the company’s strategy in the face of competition?
To capitalise on a clear and uncompromised segmentation due to the wide range of brands and concepts that Accor can offer. Examples include the repositioning of the Sofitel brand to enter the luxury hotel market; the Pullman brand to address the upscale segment with a special focus on executive business travellers and MICE; Novotel to maintain its authority as a leader in the upper mid-scale segment and to be present in all key business and leisure markets in the Middle East; Ibis to be a leader in the emerging economy segment; and finally Suite Hotel to cater to the mid-stay demand with a specialised, trendy offering.
Accor Middle East will be promoting the Sofitel, Pullman, Novotel and Ibis brands in China, India and Russia to ensure a presence in these key markets.

Is Accor bullish about 2008? If yes, why?
Accor’s performance in 2007 outclassed our solid performance the year prior, and we expect to see the same trend in 2008 as the growth of demand in main markets like Dubai is still superior to the growth of supply.
We don’t expect our new openings however to impact the hotel industry before mid-2009.

What will be the biggest challenges facing you in the Middle East in 2008?
I would say human resources; the high expected number of hotel openings in the Middle East will undoubtedly apply pressure on staffing;  on one hand, for retaining skilled employees in our regional properties and on the other hand for recruiting fresh talent for our new properties.