In late February 2023, 275 owners, operators and advisers from the region gathered at the Anantara Eastern Mangroves, Abu Dhabi for the 6th edition of the Gulf & Indian Ocean Hotel Investor’s Summit (GIOHIS), part of the HOFTEL Hotel Investor’s Summit Series.
The Summit deliberately set out to tackle some of today’s big issues – the ambitions of the Kingdom of Saudi Arabia; the arrival of gaming in RAK; the rush of owners to franchises and away from management agreements; the opportunities and challenges of ESG standards; the rise in construction supply costs and interest rates; whether glamping is now a real alternative to “hard built” hotels; whether high fashion brands add value to luxury hotels and indeed whether the luxury sector has now peaked.
With thanks to Tea, some of the key takeaways from a well received session included:
- The concept is attractive but execution, especially in operations, is a challenge not many have risen to
- Several fashion brands have launched into hospitality (e.g. Versace, Armani, Fendi, Missoni…) but most of these have failed
- That said, there have been some success stories, notably Bvlgari, Nobu and more recently Baccarat
- Key success factors include the establishing the right partnership, location, financial structure, and commitment
- Scaling has proven the greatest difficulty for almost all of these brand extensions with the notable exception of Nobu. Perhaps the adjacency of a restaurant brand (F&B) with hospitality is part of what has enable the success of Nobu Hotels
- Branded residences is where the consumer brands can shine. In certain cases, the price premium achieved by non hotel branded residences has reached 50%. Expect more brands to enter this space as the appetite for branded residences continues to gather pace e.g. the St. Regis, Dubai sold out 70% of its 232 units within an hour of its launch