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The lifestyle concept, increasingly recognized as a must-have to attract millennials or those who belong to generation Y, is gaining favour with hotel developers in the UAE. At the Arabian Hotel Investment Conference (AHIC) in May in Dubai, hoteliers concurred that the concept above all needs to be tech savvy, social with a vibrant feel and unique.
''It is a misconception that lifestyle equals luxury,'' says Eli Younes, Executive Vice-President and Chief Development Officer of Carlson Rezidor Hotel Group. ''Lifestyle concepts can be found in a lower segment like Studio M, or upper scale like Quorvus, while our Radisson Red sits in the middle.''
John Vanderslice, Global Head of Luxury & Lifestyle Brands at Hilton Worldwide, concurs that lifestyle and luxury are not the same thing. ''They can coincide, but it's rather a mindset of being original,'' he says.
As a millennial, Ivanka Trump, Executive Vice-President of Development and Acquisitions at The Trump Organisation, explains what her generation expects from lifestyle hospitality that edges towards the luxury end.
''To us luxury is about the true personalised experience, the tangible is paramount, the instagramable moment we share with our friends,'' she says. ''Technology plays a big role in cultivating the experiential.''
Design was equally as important to meet high expectations, particularly in Dubai, to remain competitive, according to Trump.
''Today it isn't just about the person walking in impressed by the grand lobby but also the whole network of friends who see it on the social media and are commenting on the experience, so design has become more relevant because we live in this culture where everything is shared,'' she adds.
Whilst international names like Trump are bringing new lifestyle brands to the region, including the likes of Aloft and TRYP by Windham in Abu Dhabi, W Hotels and ibis Styles in Dubai, they are still far and few in between. Instead it has been the homegrown hotel companies, which have taken the lead. Rotana came up with the stylish yet affordable Centro, and the Jumeirah Group developed Venu, described as an energetic cosmopolitan social place, where guests are given the freedom to create their own story. The first will open in Meraas' Bluewaters.
''The millennium traveler is not about age but the mindset. They want public spaces to mingle and connect with social media. It is about an intuitive service, be there when you need to be and not when you don't. These travelers have fluid expectations requiring flexibility,'' says Robert Swade, Group Chief Development Officer at the Jumeirah Group.
Emaar Hospitality, meanwhile, has been going the lifestyle route from the start, boasting success with The Address and its Vida concept and is busy bringing Rove, a joint venture with Meraas, to the market.
Philippe Zuber, COO at Emaar Hospitality Group explains that it was about creating destinations over and above the beauty of a setting. ''We need to create a sense of arrival and an experience people will remember. Over 50 per cent take pictures, so it is about creating emotions, making sure that the consumer will share them by making their stay different,'' he elaborates.
As far as The Address is concerned, this has been achieved by working with the brand's DNA — the concept of where life is happening.
''We may have different generations, but the inspiration of each individual is the same,'' explains Zuber. ''They want to be surrounded by a beautiful environment, so we need to pay a lot of attention to the design. They also want free wifi, as well as spa and food and beverages (F&B).
The Vida concept, meanwhile, was developed to enter a more boutique lifestyle segment. The journey started with transforming Downtown's Manzil. ''It was something that didn't exist in Dubai, so we recreated this destination,'' says Zuber.
''The habits of consumers have changed dramatically. You have to come up with something which has much more identity and soul so that they are emotionally engaged towards the brand,'' he says, adding that this was achieved by creating a boutique experience with all the luxury components in a more contemporary way.
Trump says F&B is a big element of the lifestyle brand. The choice of restaurant, environment and lobby, are fundamental to the long term success of your operation. ''You can bring high energy into an environment by creating activity and excitement,'' she says.
Whilst more Vidas are planned for the UAE and one in Bahrain, Emaar is currently focusing on bringing six Rove Hotels in Dubai.
Again a slightly different lifestyle concept, Rove, is expected to attract what Zuber terms the nomad traveller.
''We believe that this segment will be extremely attractive,'' he says. ''Studies indicate that there is less appetite for the value proposition brands as they don't give any emotional engagement.
''When we talk about a destination, the idea is to create an emotional connection to the brand. The consumer brings our assets to life, making the future of hospitality extremely bright,'' he adds. On the international brand front, Rezidor has some announcements on introducing its lifestyle brand Radisson Red into the UAE.
''Hotel owners are talking about Red. It is exciting, fresh and authentic with its own identity, and creating such a buzz. This year we're ready to give it a push,'' says Mark Willis, Area Vice President — Middle East and Turkey at The Rezidor Hotel Group.
Radisson Red falls into what he terms the lifestyle select category — an upscale hotel with select services, coming in a streamlined design with attention to detail and functionality.
''When we talk about lifestyle select, the next generation customers want speedy internet to download emails, rather than a fussy service, or luxurious fabric on their seats if given the choice,'' says Willis. ''Business travel has changed, people don't want a long drawn out three course meal. They want to eat quickly with a fork in one hand and an ipad in the other, while enjoying a vibrant environment with quality service.''
Although the physical reception is still there, technology drives hotel services such as online check-in and taxi booking, circumventing the reception and concierge.
''We won't have unmanned hotels, but slightly less manpower,'' says Willis. ''This is lifestyle select. We want to provide just what the guest wants, not more. There is an array of facilities and services the millennial traveller doesn't use. Few business travellers use laundry services for example, as their trips have shortened dramatically.''
Reds are likely to be contemporary inside out, with particular focus on what is inside the hotel for the customer, such as making the reception and restaurants more like public lounges.
''A modern simplistic design used to be seen as something that was cheap,'' says Willis. ''That is not the case today as it is seen as sleek and elegant. Huge amount of money goes into areas like the reception and restaurants. If you take a more clean quality-focused rather than overstated approach, it reduces the development price and is reflected in the price point.''
The Radisson Red's rates will sit in between the midscale Park Inn and upperscale Blue. ''It is comfortable where everything works. Red is pitched as a new built proposition although we'll have some conversions,'' Willis concludes.
Hoteliers look beyond market blip
Since a substantial new supply of hotels started hitting Dubai's streets last year, and with the rouble and euro tumbling soon after, hoteliers have been feeling the pinch. However the future is far from being doom and gloom, according to hospitality experts.
''There have been a lot of comments about additional supply, which is very relevant to the year on year growth that Dubai has had,'' says Mark Willis, Area Vice President – Middle East and Turkey at The Rezidor Hotel Group. ''There has been a huge influx of supply last year. However, you also see the impact Dubai has made with generating leisure and business.''
According to Willis, Dubai was facing a shift in dynamics because of elements like the drop in oil price and reduced Russian and European inbound business. However, he pointed out that despite political instability in the region there was no turmoil in sight. ''Dubai is an international city, the outlook still remains positive. We're doing fine and are going to have a good summer,'' he says, summing up the general market sentiment.
According to STR Global figures, hotel occupancies have dropped, if only slightly, in the UAE overall to an average of between 72 and 88 per cent, with Dubai's occupancy dropping by 2 per cent and average daily rate (ADR) by 5 per cent during the first quarter of this year, compared to last. Interestingly, hotels in the luxury segment are more affected than the mid-market.
''Occupancies in Dubai averaged 78 per cent and ADR $275 in Q1 2015. This is still strong, and Dubai still remains at the top globally in terms of revenue per available room (RevPAR) performance. In the US anything over 50-60 per cent of occupancies is a reason to be happy as far as hotel investors are concerned,'' says Elizabeth Randall-Winkle, STR Global's MD, puting numbers into perspective. Colliers International is forecasting occupancies at between 75 and 80 per cent, with ADRs of $220 up to $480, thus seeing RevPAR drop by up to 2 per cent maximum, depending where the hotel is in Dubai for this year, compared to last year. For Abu Dhabi, although hotels in the emirate charge lower rates at similar occupancies, RevPAR is predicted to actually rise by up to 3 per cent for the same period. ''The pace of the new supply have been very slow to come on stream and also new hotel applications have been carefully monitored by AD municipality,'' Filippo Sona, Director and Head of Hotels MENA at Colliers International, explains the emirate's stronger performance.
Abu Dhabi Beach hotels on Saadiyat and Yas, in particular, have managed to stabilise performance, and created an optimum business mix of leisure and MICE guests, which was further supported by recent openings and upcoming entertainment venues in the area, according to Sona.
Michael Glennie, President and COO at FRHI Hotels and Resorts compares Dubai to Singapore where a 30 per cent increase in supply four yeas ago didn't have the negative impact people thought it would had. ''This whole supply discussion and whether demand can keep up with it boils down to whether induced demand really works, and it did in Singapore. There are great parallels with the UAE, a strong government, tourism authority and airlines,'' he explains.
Hoteliers will still have to watch out for an erratic rouble and the euro's uncertain path. While Gerald Lawless, President and Group CEO of the Jumeirah Group, felt that a threat to tourist volumes could lurk in a weak euro, he also believed things were looking up in the euro-zone.
Eli Younes Executive Vice President and Chief Development Officer of the Carlson Rezidor Hotel Group believes that the euro cannot be blamed alone but rather a list of macro-economic and geopolitical issues that were creating headwinds in the Middle East. ''Yes, there has been an impact in Dubai, and you need to adjust your pricing strategy or your value proposition,'' he said.
According to Sona having to adjust performance expectations a little wasn't necessarily a bad thing at all. ''The combination of new hotels offering promotional rates, and existing hotels adjusting rates to compete, has made the market more affordable. And the benefit of this is a consistent, if not increased, volume in demand. It is simply the response of the consumer to a rate compression,'' he says.
Source: Nicole Walter, Special to Property Weekly