IHG Targets UAE, Saudi For MidEast Expansion

The company has around 25 new hotels in the pipeline, which are to be launched over the next five years, a top executive said.



InterContinental Hotels Group is expanding massively across the UAE and Saudi Arabia- its key growth markets in the Middle East, a senior executive said.

The company, which currently operates 81 hotels in the Middle East and Africa region and runs brands such as InterContinental, Crowne Plaza and Holiday Inn, has 25 more in the pipeline.

“In Saudi Arabia, we have nine hotels in the pipeline,” Pascal Gauvin, IHG COO for Middle East, India and Africa told Gulf Business at the sidelines of Arabian Travel Market.

“By the end of the year we will open the Crowne Plaza in Riyadh and another InterContinental hotel.”

The hotel group is also planning to launch its first Indigo Hotel in the Middle East in the Kingdom soon along with other major projects in the country.

“We signed the largest Holiday Inn in the world with 1238 rooms in Mecca and it is under construction currently. It is a big move for us in Mecca where we already have an InterContinental,” said Gauvin.

“Also under construction are Staybridge suites- two in Jeddah and one in Al Khobhar. We currently have Staybridge Suites in Cairo, Abu Dhabi, Beirut and now in Saudi Arabia.”

IHG is planning to expand its presence across Dubai as well with an additional InterContinental and Crowne Plaza hotel opening in the Marina. The Intercontinental Hotel in Dubai Marina is slated to open by the fourth quarter this year while Crowne Plaza will be operational in another two years, Gauvin said.

The UK-based hotel group is also launching an InterContinental Hotel in Kuwait next year while the construction timeline for the 25 hotels in the pipeline will span five years.

The Middle East market, especially the GCC, is a strong growth area for IHG and is also considered a priority market. Revenues from Asia, Middle East and Africa (AMEA) soared to $230 million in 2013 from $218 million earned in 2012.

“Our revenue per available room (RevPar) in the AMEA was up 3.8 per cent in Q1 2014 compared to the same period last year. In Saudi Arabia, we were up 2.4 per cent and in the UAE we are up 3.9 per cent,” said Gauvin.

The executive added that though the certain parts of the Middle East is grappling with unrest and face a resultant travel ban, growth in its GCC markets are off-setting the decline in other states.

“Generally the region is doing well, but of course we have areas such as Egypt, Lebanon that are going through some trouble so we need to support our hotels.”

But Gauvin said that despite the unrest, IHG hotels in Egypt and Lebanon are still operational and have the potential to be more successful.

“Our hotels (in problem areas) are still leasing despite the crisis. We opened the Staybridge Suites last year in Beirut and it has been performing remarkably well…so that shows that there is still potential.

“There will always be something happening. If Lebanon is down now then six months from now, Lebanon will be booming. We had a fantastic year and we have been in the country for 52 years.

“In this time, there were great years and some bad ones. Hotel business is a long-term business and there will always be problems that can happen anywhere in the world…but the good thing is that we have stability in rest of the region. Our hotels are performing extremely well in other parts of the Gulf,” he said.