Q&A: AccorHotels MD talks Saudi expansions, Gulf market trends

French hospitality giant AccorHotels has made Gulf countries a key focus under recent expansion plans. A large portion of new projects are set to be carried out in Saudi Arabia, according to Olivier Granet, the company’s Managing Director & Chief Operator Officer for the Middle East. In an exclusive interview with Argaam, he outlined new targets and explained how the company plans to respond to evolving consumer demands.

Q: Can you elaborate on current expansion plans in Saudi Arabia, the UAE and other key markets in the GCC?

A:  While the UAE has so far formed the bulk of our regional offering with over 9,000 rooms in more than 30 open hotels, our expansion strategy in the region is now [slightly] more driven toward the Saudi market, where we have over 9,000 new rooms coming up in nearly 35 hotels under construction. We are targeting 50 operational hotels with more than 13,500 rooms in Saudi Arabia over the next three years. Our strategy is to build on our existing strong partnerships and network in the kingdom, where we have more than 15 properties in operation containing over 4,500 opened rooms.

We feel that the Kingdom, perhaps more than any other regional market, faces a growing need for quality hotel accommodation in order to cater to its increasingly large numbers of visitors, particularly around the Holy Cities of Makkah and Madinah.

Q: What challenges have you faced as you have strengthened your presence in the region, given the current investment climate and lower oil price environment?

A: There are a number of global factors that may affect the hospitality sector and create moderate declines in the regional market during specific periods or events. However, we believe that these declines only occur at occasional intervals and are not part of a long-term trend. In fact, we have observed that over the long-term, demand for hotel rooms has consistently outpaced supply in the regional market.

At AccorHotels, our development strategy is based on the long-term view that the regional hospitality industry requires further development and that there is significant opportunity for further growth.

Q: What are the latest developments surrounding AccorHotels’ stake swap agreement with Kingdom Holding that was announced late last year?

A: As per our original announcement, the deal is subject to regulatory approvals and aims to be completed in June 2016.

Q: How are you looking to address the growing demand for 3 and 4-star hotels in the GCC?

A: In an effort to meet the increasingly high demand for affordable quality accommodation and to broaden the UAE beyond a five-star destination, we will continue to take advantage of our global leadership position in this segment and push ahead with the development of more 3 and 4 star accommodations from our popular brands to help diversify the local hotel landscape.

In terms of prominent customer demands, we are finding that more and more guests are attracted to “lifestyle” hotels carrying a unique or differentiated concept. This is a trend we are noticing across the full market spectrum – from economy to luxury.

Write to Joumana Saad at joumana.saad@argaamplus.com