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Expo an ideal chance for hotels to develop their service culture
November 11, 2017
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The Expo is an excellent chance for hotels to develop their service culture in preparation for its global audience. They really stand a chance to gain international recognition and exposure which can be capitalised on post the Expo 2020. This was stated by JS Anand,  founder at Leva Hotels & Resorts, during an exclusive interview with Inayat-ur-Rahman of The Gulf Today. He noted that investors are making use of the lucrative new opportunities in the hospitality sector as new projects are coming up all over the city.

Here is the full interview:

Q: With the Expo 2020 driving surge in the hospitality sector, do you think that Dubai will see a response similar to the aftermath of the IMF conclave in 2003?
A: In the run-up to Expo 2020, there have been mixed reactions to the oversupply in the hospitality sector. As it is, most of the trends have emerged only in the midscale sector as the real requirement lies in that very segment.

 
Some of the proposed projects are actually residential in nature as some of the land use has made a transition from the hospitality sector.
 
The investors are responding in kind to the surge and are making use of the opportunity that a growth at this scale presents.

Q: With the trend towards 2 and 3-star hotels increasing, can we see a significant change in the market?
A: I think that the luxury segment is saturating with established names and the 3-star market is the natural beneficiary of this. With tourism on the rise, there is still a huge market out there for 3-star upscale hotel options. The trend is still in its nascent stage, and the current competitors are not enough to adequately cater to the largely untapped market. I think investors and hoteliers are realising this and we can expect the segment to show significant growth in the next five years.

Q: Do you think serviced apartments and Airbnbs will be a competition to the traditional hotel format?
A: Already, platforms like Airbnb are eating into the business and leisure segments with their formats. Not only is growth consumer-driven, but it is also boosted by the steady rise in the supply of homes to such platforms. In fact, the surge in demand for such accommodation options is expected to grow at a rate estimated to be anywhere in the vicinity of 400% since its launch in 2015. Even corporate visitors in the city for meetings and conferences are opting for these homes.

Q: What are some of the pitfalls of this sudden increase in the run-up to Expo 2020?
A: The most obvious and perhaps the most dangerous disadvantage or threat is oversupply. When supply outnumbers demand, nothing good can come out of it. The occupancy rate in the market is bound to suffer, leading to a domino effect resulting in a dip of average prices in the market.

Q: Many people have doubted the industry’s consistency, do you think that Expo 2020 will be an opportunity to bring stability to the industry?
A: It would be incorrect to say that the hospitality market has not been consistent. Every market sees its highs and lows, and this industry is no different. We must appreciate that the kind of growth it has shown in the past was unprecedented.

Q: Has there been any change in the investor portfolio in the industry in light of its surge?
A: The investors are making use of the lucrative new opportunities in the hospitality sector as new projects are coming up all over the city.
There is a marked rise in investors opting for the serviced apartments industry, and it has emerged as a profitable option. With a net return in the range of 6.5% to 9%, it has become a massive piece of the investor portfolio.

Q: What are some of the trends that you see emerging in the industry?
A: The industry has woken up to the importance of using customer data as inputs for its decisions. Most hotels are employing big data analysis to make smarter business decisions. The use of technology has also increased over the years with many using apps to manage stays and using big data to manage customer data. With an increase in awareness, firms are also realising the importance of sustainable growth and are going green to do their bit for the environment. The industry is also witnessing a major spike in the commercial and residential properties in the region.

Q: To cater to the global audience, many hoteliers are adopting advanced technologies. Do you think such technology is being used to its maximum potential?
A: The hospitality segment is now using technology as an ally to woo the global visitor and is using online booking, marketing automation, and CRM strategies religiously. With the advent of social media, hoteliers have begun utilising these platforms to reach out to a broader audience. The industry is taking small but sure steps towards a complete upheaval of their operations. So, for now, I think we are still far from entirely using technology to its maximum potential.

Q: With the number of rooms being added rapidly, what should hoteliers do to maintain quality as quantity increases?
A: An increase in the number of rooms is of no use if the hotel lacks a strong service culture. The aim of hoteliers should be to go the extra mile and set new standards for excellence. With expansion, the hotel must also prepare for a new set of challenges. Technology has emerged as an essential means to improve guest services by using social media tools and online platforms to analyse feedbacks. In addition to this, empowering the employees to be a part of the decision-making process will give you a sound foundation going forward.

Q: How is Leva preparing for the Expo 2020?
A: Our brand is a young, homegrown brand that is still gaining a stronghold in the market. While the Expo 2020 is on the radar, it would be unfair to say that all our efforts are aimed at getting ready for it. As we gain more exposure and grow as a brand, we hope to achieve our aim of 750 keys by Expo 2020.

Q: Are there any new projects in the pipeline for Leva?
A: Leva has a few interesting projects coming up, and we are negotiating for more projects in various parts of the UAE. Our confirmed sub-brands include 83 rooms in 3-star D’Zign by Leva, Deira and 138 rooms in 4-star Zen by Leva, Al Barsha.

Q: In the rapid rise in competition in the industry, what are some of the factors that distinguish Leva from the others?
A: Leva believes in a lean top management with hands-on leadership to provide the necessary direction to the brand. We have a lean staffing model and clustered operational services for a smooth internal process. We deliver and project realistic communications and goals. Our models are cost-effective with an idea to maximise every allocated square footage in a hotel asset with multiple revenue maximisation strategies for the investors and partners.

We ensure educating ownership to understand the partners we choose based on delivery and not recommendations alone.

Leva promises competitive fee structure that allows us to be more profitable brand compared to other international operators. Our cost model is designed to be one of a kind due to our teams’ exposure to upscale and midscale brands in the western markets

Q: Do you think the Dubai hospitality industry is “Millennial-ready”?
A: The current generation of visitors is well-informed, aware and always on-the-go. They are looking for options that offer world-class facilities at reasonable prices. There is a need for swift adoption of technology to cater to them. In addition to this, we need more cost-effective midscale properties to fill the huge gap in the market. Dubai has potential and ways to move ahead in the hospitality segment in all possible aspects.

Q: What are some major industries that will benefit from the trickle-down effect of the boom in the hospitality sector?
A: While the hospitality sector is the direct beneficiary of the surge, other industries like retail, banking, and media will also reap benefits. With more consumers, a massive influx of money is expected into the economy and with the spotlight on the market, these three industries will definitely see a rise in operations. The SMEs in the region will have the unique chance for accelerated growth in light of the developments in the economy.

Q: What after the Expo 2020? What precautions should the industry take to maintain its position post the event?
A: The Expo is an excellent chance for hotels to develop their service culture in preparation for its global audience. They really stand a chance to gain international recognition and exposure which can be capitalised on post the Expo 2020. The firms must inculcate practices that benefit it in the long-term and are not just instituted for the Expo 2020, only to be discarded later.
 

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