Viability's Guy Wilkinson writes a monthly column for Hotelier Middle East Magazine. This article originally appeared in August 2009. For more information about Viability, please visit http://www.linkedin.com/company/2347942 or http://www.viability.ae/

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COMMENT
Going from B&B to luxury
Viability director Guy Wilkinson offers his views on the cultural acclimatisation of the limited
service brand and uncovers the Kingdom of Saudi Arabia’s secret bed and breakfast network
accommodation that is anywhere
near recession-proof — being cheap
to build, cheap to operate and cheap
to stay at. Admittedly, development
programmes have been curtailed
somewhat, but that’s due to funding
problems and specifically, poor mar-
ket conditions in Dubai (where most
of these hotels are located to date), not
to any defect in the concept itself.
Bear in mind, however, that both
Ibis and Express have been adapted
to pander to GCC customer expecta-
COLUMNIST
tions and are noticeably more luxuri-
ous and fully serviced than their origi-
he best-selling car in the world nal models in Europe and the US.
T is the humble Toyota Corolla,
with more than 35 million sold
as of 2007. The top hotel brands
in the world are both in the mid-mar-
ket: Best Western and Holiday Inn,
UNLIKELY IMPORTS
The prospect of importing brands
with still more limited services, even
in the current recession, therefore
which had 308,636 and 256,699 rooms remains remote. The archetypal bud-
under their flags respectively in July get brands are Accor’s Etap Hotel
2008, according to the Hotels 325 sur- (two-star) and Formule 1 (one-star). How far can hoteliers push the budget bracket in the GCC?
vey. My point is nothing sells better The latter features ‘room vend-
than something affordable and reli- ing machines’ to complement a
able, especially these days. reception that is manned for just IT WILL BE A LONG TIME BEFORE GCC
Thus one might be forgiven for
assuming that of all the new hotel con-
a couple of hours in the morning
and evening.
GUESTS OF ANY NATIONALITY OR
cepts introduced in our region over
the past few years, the best poised to
Accor has confirmed on several
occasions that there is no plan to intro-
ECONOMIC BRACKET ARE PREPARED
weather today’s economic conditions duce either to the Middle East yet, and TO ‘SLUM IT’ TO SAVE A FEW DOLLARS
would be the branded, limited-service one can understand why. Recession
hotel, epitomised by Ibis and Express or no recession, it will surely be a long terms of introducing a true mid-mar- is the Affordable Suites of America!
by Holiday Inn, which now have a time before GCC guests of any nation- ket brand. This is arguably because It is a little known fact that Saudi
handful of operational GCC proper- ality or economic bracket are pre- ARRs are lower than for equivalent Arabia, for example, possessed a
ties. Another emerging brand is Pre- pared to ‘slum it’ for the sake of sav- hotels, due to the longer average stay massive 2437 serviced apartment
mier Inn, with one Dubai unit . ing a few dollars, let alone embracing and resultant discounting in serviced buildings in 2006, containing 58,239
Up until the opening of the first Ibis such extreme concepts as easyHotel apartments, and also because even apartments. Almost all of these are
at Dubai World Trade Centre in 2003, or the Japanese-style, Kuwait-funded the deluxe serviced residences gener- unbranded, low-cost and privately-
Gulf travellers on a budget had only Yotel ‘capsule room’, with letting ally have limited facilities, unless con- run, effectively creating the Saudi
two choices: to stay at an unbranded units of 15- and 10.5m2 respectively. nected to a full-service hotel. equivalent of a B&B network.
hotel or double up in an expensive Why would they, when unbranded Accor, predictably, has come near- In today’s economic climate, surely
branded room. Now there are a select hotels of an equivalent price can offer est to entering the mid-market, hav- the time is right for an affordable
number of branded hotels that embla- them full amenities of a standard size ing just debuted its four-star Suit- international brand to be profitably
zon their affordable rates — less than and full services? eHotel brand near the Mall of the introduced into this sector? HME
US$100 in several cases this summer Serviced apartments long ago Emirates in Dubai, which offers a mix
— in large signs on the wall outside. became accepted as a popular lodg- of suites measuring 30 and 45m², plus
It seems clear that this is a good thing, ing choice in the Gulf, resulting in a restaurant, a bar, 24-hour deli, pool,
both for guests and in particular, for the entry of hotel chains such as Mar- fitness room and business corner. By
the operators and developers, who riott and Accor at the luxury level. contrast, both the US and Europe are Guy Wilkinson is a director of Viability, a hospitality
and property consulting firm in Dubai.
must be congratulating themselves on But strangely, this market sector well provided for with true budget
For more information, email: guy@viability.ae
creating one of the few types of hotel has lagged behind that of hotels in ‘extended stay’ brands; my favourite
August 2009 • Hotelier Middle East www.hoteliermiddleeast.com