On the fast track

Once a laggard in the Middle East, Rezidor SAS has made the region a priority market. Kurt Ritter, president & CEO, explains more.

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By  Shilpa Mathai Published  July 20, 2004

|~||~||~|How would you rate your performance in the Middle East?

We are doing well; we are over budget and on track. We have several properties coming on board and our next opening will be in Dubai. Cerruti Dubai will open early in 2005 in Media City. We were previously on a slow growth track in the region as we were latecomers here. Before 1994, we were only a local Scandinavian company so we obviously wanted to grow our base in Europe first and then come to the Middle East. However, this is now a focus market for us.

Why did you do a tie-up with Cerruti to launch a luxury hotel brand?

The idea was not because we wanted to tie up with a fashion brand. When I read about the rejuvenation at Cerruiti, that inspired me. Hotel Cerruti is our new lifestyle brand. The joint initiative will deliver a new kind of hotel experience for a new kind of audience. We see great opportunities in the Middle East for the development of our portfolio of brands. The introduction of Cerruti to this part of the world is an exciting next step.

How will these properties be different from your other hotels?

The Cerruti hotels will comprise both new builds and conversions of historic buildings in key cities and will range in size from 120 to 150 bedrooms. The first of the Cerruti hotels in the Middle East is going to be in Dubai, construction of a Cerruti in Kuwait is underway and I am sure opportunities will spring up in the region.

The hotels target stylish, well travelled people who appreciate high quality and understand detail. The buildings will be beautifully lit and presented, with intimate receptions and a certain respect for fashion. Rooms will be soft and sensuous, with the best of beds and linens, fabrics and finishes.

What type of agreement has Rezidor SAS signed with Cerruti?

Instead of forming a joint venture like Bvlgari and Marriott, Rezidor has signed a 15-year franchise deal with Cerruti. This gives us full control of the properties; we will run and design the hotels.

Why are hoteliers and fashion houses joining forces?

It is a quick way to get brand understanding and suitability. People already have very positive perceptions of the brand Cerruti; they associate it with satisfaction and the tieup augurs well for both of us. Cerruti can use the hotels to showcase their latest collections and that kind of exposure cannot be bad for their brand. Obviously, we will try and source uniform textiles from them.

You are managing a hotel on Kish Island, but not branding it as Radisson. Why?

Yes, we are not giving it a brand name for the time being. The property, one day, when the market is totally open, will be called a Radisson, but for the time being we can’t do it.
This is a good opportunity for us to get into the Iranian market as it opens up; we have been trying to get into Tehran for a while now and this is probably the best way to go about it.

We are the first international hotel company in 25 years to enter the Iranian hotel market. [Dariush Grand Hotel] is a fantastic property and the owner guarantees that transport is not a problem. I expect it will attract holiday makers from mainland Iran and Saudi Arabia. I don’t think we will have tour operators flocking in at this stage.

However, it is the right time for us to go in. Not many brands can do this because of their American origin. We would like to go to mainland Iran and, one day, Iraq.

How do you feel about Saudi Arabia given recent developments there? Do you have any openings lined up?

Radisson SAS currently manages three hotels in Saudi Arabia. Historically, Saudi Arabia has been a key feeder market to other neighbouring GCC countries, with local Saudis and expatriate residents taking short break trips to destinations such as Bahrain, Qatar and the UAE.

Saudi Arabia is currently experiencing similar occupancy figures year to date to those of last year in the main towns of Jeddah and Riyadh, but an increase in the average rate over the same period has been noticed of approximately US $7-10. The provincial area of Saudi Arabia has experienced occupancy growth of 9% but with a slightly lower average rate.

The events of the last few weeks are obviously a concern for us and all hotel companies with interests in the Kingdom. The situation will be watched very carefully indeed and the necessary action plans and steps have been taken accordingly. Our first and main priority is the safety of our guests and our employees.||**||

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