Of brand diversity and portfolio growth

Starwood is to operate two hotels at Saraya Aqaba, project including the Westin Aqaba

Brand: Starwood Hotels & Resorts
Spokesperson: Guido De Wilde, vice-president and regional director, Middle East

Plans for 2007?
Our development objective in the region is to expand the diversity of our brand portfolio in key growth locations using our already strong presence in the market with Sheraton, and now with Le Méridien, which together represent about 50 hotels in the Middle East, making us the largest operator in the region.
The Middle East is currently one of the strongest growth markets. We have already signed two W hotels in Dubai and Doha; and are in advanced negotiations over several projects which will hopefully bring some of our other brands to the region.
At the moment, we’re looking forward to opening the Sheraton Aleppo Hotel early this year, with Sheraton being the first international brand to enter this city. In Dubai we will open a 300-room property located right next to the Le Meridien Mina Seyahi Beach Resort and Marina. We will announce the brand for this property in the near future. In addition the first W in the Middle East, the W Doha, is scheduled to open near the end of 2007.
Several Starwood properties are presently undergoing renovations, including Le Meridien Al Hada and Le Meridien Medina. In January, the Sheraton Oman closes for $25 million renovations, to reopen Eid in October. The Sheraton Bahrain is undergoing a full renovation and several Dubai hotels will undergo soft renovations.

A bullish attitude to the year?
Substantial upgrades to tourism infrastructure in the region, and continued improvements in regional stability in the Gulf, bode well for the continued emergence of the region as a world-class destination and the maturing of the region’s tourism industry. With 80 new hotels are expected to open in the Arabian Peninsula by 2008, this will, however, be accompanied by various growing pains. As the supply of hotels expands, demand will need to catch up. This is unlikely to occur in perfect synchrony, so some imbalances will likely trigger corrections in terms of pricing and occupancy levels. A tightening of the labour market should also be expected – qualified staff will become even scarcer, and these escalating costs will probably have an impact on profit expectations.

New source markets?
Besides our main feeder markets for the region of Germany, UK and the Middle East, new markets have emerged such as Russia, China, Australia, Italy and Japan. The American market has also shown significant growth in Dubai and Jordan.

New for guests?
Development also goes hand-in-hand with our recent brand initiatives. We have also started to roll out a number of new signature service elements created in each brand’s voice and will be focusing on the lifestyle associated with our different brands, leveraging on our multiple distribution channels to create value from individual platforms.

Challenges for the industry?
The Middle East has had a proud history of resilience and the ability to bounce back from crises – as indicated by the average rate of international tourist arrivals to the region, which has grown at 10 per cent annually over the last 15 years, as compared to the world average of four per cent.
The main challenge that faces the hotel industry globally, not only within the region, is political stability. Peace is essential for any business to flourish and progress.