Plenty of potential in region

Jean-Marc Busato, senior vice president at Radisson SAS Hotels and Resorts, Middle East speaks to JONNA SIMON about the group's plans for the Middle East, the growth of the hotel industry and its prospects both in the region and worldwide.

Q: I believe the group has 14 properties in the Middle East and Africa, but only one in the UAE, in Sharjah. Do you intend to open more properties in the UAE?

A: Yes, definitely. We are currently looking at two to three properties and one of them is in the UAE. We are presently in contact with various investor groups, who are interested in making management contracts with us. We have also looked at The Palm Island I project and we will be developing hotels on the trunk and the outer crescent. We are also looking for city properties. We have a franchise agreement with Carlton Hospitality for the Radisson brand, but it also includes the Country Inn, Park Inn and the luxury brand, the Regent Hotels. We feel, there is potential for the Radisson and Regent brands within this area.

Q: You have just opened three new properties in Saudi Arabia. Could you tell me a little about them?

A: We took over a property in Yanbu in November last year, which was originally the first Hyatt hotel outside the USA. It has undergone a complete renovation, it is practically a brand new hotel and we are in the process of re-branding it to Radisson SAS. On January 1 this year, we took over the management of two hotels in Saudi Arabia, one in Jeddah and one in Riyadh, which we are also in the process of re-branding to Radisson SAS.

Q: There is a trend since 9/11 for Gulf nationals staying in their own region instead of their usual overseas holidays. Do you see this trend continuing and increasing?

A: Definitely, but we also still see many people from the Middle East travelling abroad. America is probably the exception, but vacationers from this region still go to Europe. For us this is important, as Europe is our stronghold. We are creating a lot of brand awareness in this region, both for vacationers and for business travellers to Europe. Don't forget, we also have a huge potential in the Americas through Carlton Hospitality, when the trend is ripe for travelling to North America again. We do, however, consider ourselves a European company with Scandinavian management approach.

Q: Could you explain a little about Rezidor SAS Hospitality?

A: Our mother company is SAS Scandinavian Airline System, which belongs to the three states of Denmark, Norway and Sweden. The company was previously run by the SAS Hotels corporation. Then we entered a franchise agreement with the Carlton Hospitality group, which gave us the name of Radisson SAS Hotels and Resorts. With the new master franchise agreement we had to find a new name, as we can not call ourselves Radisson SAS with other brands in the group, so up came Rezidor SAS Hospitality - Rezidor includes all four brands.

Q: As senior vice president Middle East you are based in Dubai. Why is that?

A: We have in a way previously neglected the Middle East in comparison to our growth rate in Europe. Now it has become a clear objective to expand our brands into the Middle East and we decided, we should be present locally with a branch office.

Our philosophy is that it is important for us to be close to the owners, guests, staff and the environment of the property. We believe, it is very important to support our operations in the Middle East on a local level.

Q: What is your forecast for the future growth of the hotel industry in this region?

A: I think, it would be wishful thinking to expect revenue increases at the present time. I see it more as a cost management issue. I do not envisage this trend continuing, but at present streamlining of the cost of hotel management seems to be the way.

I do think, there is an oversupply of rooms in certain segments of the hospitality market, but in other areas, there is growth potential.

Q: Which segment of the market do you see growing fastest? Vacation? Business? MICE?

A: It depends on the destination. In Egypt, we have mainly the vacation market, in the UAE it is a mixture of business and holidaymakers. I see both sections developing. People go more often on holiday, take shorter breaks.

Q: In one of your recent press releases, it mentions 'The new lifestyle brand' will be introduced shortly by Rezidor. What is this?

A: In the UK, we had at one time the Malmaison brand, which we were able to sell successfully. We have certain projects, which we have signed management contracts for. We have discussed new names with some famous companies, mainly in the fashion industry, in order to find an appropriate name. Malmaison was a new lifestyle concept of a hotel, which took off in the UK and which has now been sold. The new name from Rezidor should come out very soon.

Q: The company now operates 120 Radisson SAS Hotels and Resorts with approximately 42 under development and now the Regent, Country Inn and Park Inn since last year ... in total around 700 hotels including the Carlton Hospitality hotels by 2012. Will this development make you the largest hotel operator in the world?

A: No, but we are working on it! Hotel mergers are taking place all the time around the globe. We are committed to extensive expansions with our existing partners. We probably will not be the largest hotel group, but we will definitely be a key player.

Q: With the new properties in Saudi Arabia, you have stated that you will employ more Saudi nationals. How important is the training programme in the Radisson SAS group?

A: The training of Saudi nationals is a big issue for us, it is both a political and important subject and we have just finalised the guidelines for the training Programme. I think, it is important in Saudi Arabia to create job opportunities for the country's nationals. We take the issue very seriously and with the targets designated, I think it will work well.