Rotana to enter budget market with new brand

Rotana Hotels and Suites has launched a new hotel brand to sit alongside its portfolio of four- and five-star hotels in the Middle East.

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By  Laura Barnes Published  January 3, 2006

Rotana Hotels and Suites has launched a new hotel brand to sit alongside its portfolio of four- and five-star hotels in the Middle East. Called Centro by Rotana, the concept behind the brand is to provide accommodation for budget-conscious travellers across the region, without compromising on comfort or business facilities. “We believe there is a niche market developing in the region for businessmen who want the necessities of a five-star hotel, but at an affordable cost,” said Daniel Hajjar, vice president sales & marketing, Rotana Hotels and Suites. “By entering the three-star sector, we will be targeting a broader market, as well as appealing to some of our existing clients. People are beginning to say they do not want to pay US $200-$300 for a room, so we are catering for those who want to pay a lot less,” he added. With an average cost of US $70-$80 per room, Centro is expecting a return on investment between 15-20%. However, as each property is to be a new build rather than re-branding existing Rotana hotels, there is an expected turnkey cost of $60,000-$70,000 for each room. With plans to open 25 properties within the next five years, Centro has already secured agreements for three properties to open in the UAE – two in Dubai and one in Abu Dhabi. Although the first hotel will not open until the end of 2007, Centro is also looking at having a presence in Egypt, Lebanon and Kuwait. Rotana is the latest in a line of chains to enter the region’s increasingly competitive budget hotel market. InterContinental Hotels Group launched its Express by Holiday Inn in the Middle East at Arabian Travel Market earlier this year, and has announced plans to open 25-30 of these three-star hotels across the region in the next five years. Meanwhile, Rezidor SAS is also eyeing the three-star market, with the opening of Park Inn. The mid-tier brand will be introduced to the Middle East in 2007, when the first Park Inn property opens in Al Khobar in Saudi Arabia. As such, Centro will only open where Rotana already has a presence, so it can push the complete brand and range of service offerings to its guests. “International hotel chains have discovered there is a niche in the market. However, their products are made using a cookie cutter… they are all the same,” said Selim El Zyr, president & CEO, Rotana Hotels. “So the challenge we face is to bring something different, a three-star hotel with the perception of a five-star property,” he added. As such, Rotana has employed the design company, LWD, to design a number of concepts for the suites. Having already worked with LWD on a number of projects, Hajjar adds that they chose LWD as they have the same spirit as Rotana. Measuring 22m², the hotel rooms will have a modern but functional look, with refurbishments scheduled for every five years. As budget properties, the hotels will have the basic requirements for a business traveller. They will also provide a three meal restaurant with a bar and daily shop. “Centro will be a three-star property with all the necessities, including a well appointed business centre, meeting rooms, and most importantly, leading-edge technology. It will be like a five-star hotel but without the frills,” commented El Zyr.

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