THE PIPELINE : EMEA
into that forecast ,” says Tony Potter , the former Corinthia CEO who lately founded a Malta-based management firm called Braveagle . “ One of the issues in Libya is the lack of certainty .”
Servotel Corp ., a London-based developer and advisory firm , had eight development contracts across North Africa that were put on hold following the Arab Spring ; only one of those projects has since restarted , and Servotel President Ömer Isvan believes all but one other are dead . “ We were increasing some focus on Egypt at the time ( of the Arab Spring ), which we replaced with different geographies ,” Isvan says . “ Luckily , the post- ’ 08 recovery in CIS countries has replaced the gap . Our plans for the region are to simply wait and see .”
On the positive side , the unrest in North Africa is boosting the United Arab Emirates , especially Dubai , which posted one of the highest occupancy rates of any global market in 2012 . Travel to Dubai is largely tourism-centric , spurred on by discounted package holidays and enhanced airlift . “ Dubai will continue to be seen as one of the safest destinations in the Middle East for tourism , which will further boost demand ,” says Paul Thomas , director of London-based consultancy Whitebridge Hospitality .
Other Middle East markets generating investor interest include Oman and Saudi Arabia , the latter being driven by the Islamic pilgrimage market in Mecca and Medina . Saudi Arabia ’ s secondary markets are drawing considerable interest from the economy sector , including the Best Western and Tulip Inn brands . Saudi Arabia could absorb about 35,000 additional economy hotel rooms by 2018 , according to a report from consultancy Colliers International , and it estimates affordable real estate in secondary markets there could deliver annual returns of 18 % to 21 %.
Turkey is arguably the hottest development market in EMEA today . “ Turkey has seen a tremendous influx of capital , much of it coming from the Middle East and the Arab Spring , as well as the travel that had previously gone to those markets ,” says
Bob Loewen , chief financial officer for Wyndham Hotel Group , which has recently opened Wyndham and Tryp properties in Istanbul .
But Turkey is lately being seen as more than just Istanbul . Recent project announcements include a Radisson Blu in Kayseri , a Four Seasons resort in Cesme and a Renaissance in the northern port of Izmir .
Rezidor views emerging markets of Eastern Europe as having the greatest growth potential . “ These countries have increasingly stable systems , huge natural resources and an imbalance of supply and demand when it comes to internationally branded hotel rooms ,” says Rezidor President and CEO Wolfgang Neumann . Rezidor has recently announced projects in Zalakaros , Hungary ; Astana , Kazakhstan ; and Baku , Azerbaijan . It is also the leading international
New Renaissance in Barcelona
operator in Russia , the CIS and the Baltic states , with 10,600 guestrooms open and 6,000 in the pipeline .
London is one of the few established cities in Europe that is still seeing notable pipeline activity , with about 4,900 rooms expected to open in 2013 following about 8,000 launched last year , much of it in the upper-upscale and boutique segments , PwC reports . Midscale hoteliers in London are challenged to differentiate in a market where competition at the top end from new supply is exerting downward pricing pressure . The gap continues to widen between London and the struggling provinces , which are seeing positive trends in RevPAR but not enough to beat back soaring utility costs and wage increases . Additional gains in the provinces will need to come from rate hikes , but PwC projects a fourthstraight year of mostly flat ADR in the
28 HOTELS March 2013 www . hotelsmag . com