Hospitality management group gets into swing of things

Dubai: Ernie Els setting up a golf course or clubhouse is so par for the course ... its hotel concepts that the champion golfer wants to take a swing at.

Els’s name has been associated with the latest venture from First & Foremost Hospitality, which is to develop a chain of hospitality properties exclusively targeted at the family clientele. And he brings with him more than the name, according to a top official with the operator.

“Ernie has equity in the project and is an active member of the group,” said Michael Scully, Managing Director at First and Foremost Hospitality. “His golf course design company will bring its expertise where there are golf courses … and we know that Els Golf courses can add considerable value to real estate value in projects they are associated with.”

For the “family” hotels, the initial phase will target locations in the UAE as well as in Egypt, particularly Red Sea sites.

“Our target market is both Western and Middle Eastern/Asian [guests], where we would target beach resort properties for the Western market and activity/shopping centre locations for our other markets.

“We are looking at Deira Islands as we will be developing a three- or four-star category.

“We will concentrate on our traditional feeder markets of central Europe and [the] Middle East when choosing destinations as that is where our strength lies,” said Scully. “Our partnership with Leading Family Hotels brings a database of 350,000 active users from these areas.”

Return on investment

This user base also helps the operator reduce commission fees by up to 25 per cent, which helps push up the profitability margins. “Our rates are generally five-star with a return on investment being in the four- or five-star bracket and higher than competitor hotels,” Scully said. “The majority of our bookings come direct through our system and so not subject to high commission rates.”

Cost of development of the new properties will vary “remarkably from property to property and owner to owner,” Scully said. “Depending on the above and discounting real estate values we envisage a per room price in the region of $330,000 which allows us to offer a double-digit return on investment for the developer or property owner.

“We are looking for development and strategic partners in all areas that we develop in. As we are essentially a management company, we are looking at partnering with developers, families, funds and banks as we can assure [the] higher returns on investment than many other sectors of the real estate market.”

Source: Manoj Nair, Associate Editor,


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