Gerald Lawless: Mr. Jumeirah

Having changed its name from Jumeirah International to Jumeirah, Jumeirah is going international. The Dubai hotel group’s boss Gerald Lawless tells Arabian Business about its plan to take on hospitality giants such as Fairmont and Four Seasons.

  • E-Mail
By  Staff Published  March 5, 2006

Having changed its name from Jumeirah International to Jumeirah, Jumeirah is going international. The Dubai hotel group’s boss Gerald Lawless tells Arabian Business about its plan to take on hospitality giants such as Fairmont and Four Seasons.

Gerard Lawless is a happy man. Not only has the Irishman just run the Dubai marathon, but his Jumeirah group of luxury hotels is running away with deals. After re-branding and announcing plans to expand internationally last year, 2006 has already seen it breaking into two major new markets — China and the US.

In January, it took over Essex House, one of New York’s most prominent hotels, and late last month, it agreed a deal to launch a 52-hectare tourism development in Shanghai.

Added to its eight properties in Dubai, as well as the Carlton Tower and Lowndes Hotel in London’s Belgravia, the new ventures have boosted Jumeirah’s plan to build a 40-hotel-empire by the end of 2009.

“When I came on board in 1997 to develop the resort of the Jumeirah Beach Hotel, Burj Al Arab and the Wild Wadi water park, I did not think we would achieve so much so quickly,” Lawless says.

“We’re now well on target to achieve over 40 hotels within four years. We have twelve in place now, but I would expect to have another five hotels signed up or in operation this year. Probably as many as ten.”

Lawless is especially pleased to have got off the mark in the US and China, as both are likely to provide several openings for the hotel management deals Jumeirah is pursuing.

He says negotiations are already underway over tourism ventures in other cities in China, while the group is also looking to cash in on the weak dollar by targeting ‘gateway cities’ in the US such as Miami, Chicago and San Francisco.

Internationally, many deals are also likely to come through Jumeirah’s parent company Dubai Holding, the government investment vehicle which bought Essex House last year and is busy snapping up tourism developments all over the world.

“With our sister companies in Dubai Holding, we have some more opportunities coming up,” Lawless says.

Despite fears over a potential 100% rise in hotel rooms over the next three to five years, Dubai is another obvious target for the firm.

Lawless says Jumeirah has been in negotiations with property giant Nakheel over the management of developments on its various mega-projects in the emirate, which include the Palm Islands and The World.

He also claims not to be worried about the new properties’ potential impact on room rates in its existing hotels.

“First of all, the supply is needed to sustain the viability of Dubai as a tourism product,” he says. “Unusually, we welcome more hotels — we’re running at more than 90% occupancy in most of our hotels but in the long term it is important they build the hotels they are building.

“Also, the rates will go with the market. I don’t see why people get excited if our prices are at the same level as New York’s, which actually they are not, as it’s not wrong that we should be recognised as a major international city.

He continues: “I do accept that you can’t just continue putting prices up without it having an impact, but we monitor what other international destinations are charging and our research shows that, although we are at the upper end of the scale, we are competitive.”

“I don’t see prices dropping dramatically and I think we are well able to adjust to the market. The market is expected to grow and we expect we will still be running at pretty high capacity."

The last year has also seen the hospitality group making wholesale changes behind the scenes as part of an effort to supportthe expansion. The company recently set up sales offices to target potential customers in Europe, the US and Asia, and has introduced a new distribution system which allows agencies to book rooms directly with the firm, rather than through a third party.

Jumeirah has also recruited public relations agencies in its most important source markets, including the UK, Germany, GCC, France and the US, and it says representation will be extended to Asia next year. “This is an investment in the future and reflects our belief in our future expansion,” says Lawless. “We’ve already set up regional sales offices in London, New York, Moscow, Paris and Hong Kong — and we’ve done all that in less than a year.

“We’ll also be moving forward in other locations. There’s a lot of potential for us now to refer business between London and New York.”

Although the 2009 deadline is still some way off, Lawless also has plans up his sleeve to develop the business beyond that. He is on the lookout for management deals for water parks, having reached capacity at the Wild Wadi attraction in Dubai. Recently, it has struck agreements to manage a select group of five-star luxury hotels and a water park in the Saraya Aqaba real estate project in Jordan; and to operate parts of Aqua Dunya, a huge theme park that is scheduled to open in Dubailand in 2008.

“Its water park will be four times the size of Wild Wadi,” Lawless says of the Aqua Dunya project. “We convinced them (the owners, Al Sharq Development) that we would not be in a competitive situation as we are already at almost capacity in Wild Wadi anyway — and we have the local experience. We signed a contract to run their water park and the associated hotel.”

Also in the pipeline is an expansion of the hotel group’s bar and restaurant business, which now includes over 100 food and drink outlets in Dubai — many of which could be franchised to outside investors, Lawless says. Restaurants the company plans to expand include pizza and pasta outlet Toscana, which currently has one outlet, and wine bar The Agency. Its Noodle House chain also currently has two outlets but will have five restaurants in its name by the end of this year.

“The restaurants business has good returns,” says Lawless. “As long it is well run, well managed and well controlled, it has a lot of potential, particularly through franchising. We’re in active discussions with other potential locations and we would like to take Noodle House regional, and perhaps franchise it. But we want to set our own standards first and make sure we would be able to control future standards.”

Ultimately, though, it’s the hotel side of the business that will be key if Jumeirah is to succeed in its aim of rivaling luxury hotel brands such as Four Seasons, Mandarin Oriental and Fairmont.

Lawless says he doesn't want to compete in terms of size with his main rivals — Four Seasons aims to expand from 65 hotels to over 100 in the next few years, and the forty hotels it is aiming to develop wouldn’t put Jumeirah in that league.

But that's not to say the Irishman wants to stop there. He says the brand could be easily translated into other areas of the tourism industry, and that the company might look beyond five and six star properties once its current phase of expansion is over.

“If you get too big you can almost self-destruct,” he warns. “Four Seasons has about 65 hotels now, and within four years, we will have 40 hotels. If we ant to continue to deliver the quality, that’s enough. But that doesn’t meanwe can’t evolve and develop a new brand, which of course we would look to do as well.”

He adds: “At this stage, most of our skill lies in the upper end of the market, but it doesn’t mean that in the future we would not become an organisation that would have other brands. We would always keep Jumeirah as the luxury brand, if we were going to go into different levels with three star and four star, we would evolve different names for those brands.

“We could look at a level a little below Jumeirah. We’re concentrating on Jumeirah now, but I’m sure that opportunity and pressure will come about to look at others.”

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code