GM INTERVIEW: Frank Eikeland, Park Inn by Radisson
Five-star hotels at four-star prices could bring trouble to Al Khobar
Business is good at the four-star Park Inn by Radisson, Al Khobar in Saudi Arabia, but general manager Frank Eikeland fears that an influx of five-star properties slashing their rates could mean trouble ahead
Since joining the three-year-old, four-star Park Inn Al Khobar property in 2010, general manager Frank Eikeland has seen business go from good to great.
Year-to-date (January to August) average occupancy is 70.7%, up 12% on 2011. Furthermore, year-to-date RevPar has increased 20% on last year at SAR 355.36 (US $94.75).
Eikeland attributes the continued success of the hotel, the only Park Inn-branded property in KSA, to business opportunities and construction projects arising in the Al Khobar and Dammam areas of the Kingdom, bringing lots of long-staying guests from within Saudi Arabia, India, the US and from across Europe.
So far this year, 11% of total stays at the modern, European-style hotel have been for 21 days and up, while the average length of stay year to date is 2.5 days.
Catering to these long-staying guests has presented some operational challenges for the hotel, which Eikeland has addressed – mostly via TripAdvisor.
Looking at the group’s TripAdvisor page, Hotelier is impressed to see that Eikeland has personally replied to all 42 guest reviews, good and bad.
While most are glowing accounts of stays, with the hotel ranked number five out of 41 in Al Khobar, some long-staying guests suggested the themed buffets in the hotel’s one restaurant become repetitive after more than a week’s stay.
One reviewer refers to Park Inn as their “home from home in Al Khobar” but adds: “The food is of good quality but lacks variety if you are a long-stay guest”.
Eikeland replies to the post on TripAdvisor: “You highlight the importance of variety on the buffet, as your expectation as a long-staying guest is different from one staying for only a short time. Please contact me next time you choose to return to Park Inn by Radisson, Al Khobar so we can together — with our chef — find ways to make that stay an even better one.”
He tells Hotelier: “We have themed nights but when you stay three or four weeks and eat in the restaurant everyday you’ll see the same kinds of items. For those people for whom we see this is not working, they’re getting tired of the food so we introduce them to the chef and they can order something special. We’re not a big hotel — we have 148 rooms — and it’s a handful of people that have special requests so we fulfil them.”
Several other reviewers say checking in and out can be a “slow process”, to which Eikeland posts replies promising to follow up with the relevant departments.
“When we receive such comments we have meetings with department heads, find out what the problem is and why it’s like that. We look at the routine for check-in and make sure it’s speeding up, we also now offer drinks while the guests are waiting,” he tells Hotelier.
Retain to gain
It is this proactive approach to dealing with guest feedback that keeps them coming back, and perhaps led to the hotel being highly commended in the ‘Best four-star hotel in Saudi Arabia’ category at the second Saudi Excellence in Tourism Awards earlier this year.
Eikeland says a large number of guests are repeat visitors: “This is also because, unlike many hotels, we’ve had the same staff more or less since the beginning. Guests recognise them and you know how important that is when you’re in Arabia,” he says.
Nearly a quarter of the hotel’s employees are Saudi Arabian nationals — all members of the security team are Saudis, with others employed in finance, HR and sales — though Eikeland admits it can be more of a challenge to retain the national staff.
“There is a high turnover [among the nationals]. You have to get them motivated for the job and that is a little challenging sometimes — especially for security. Most of those in finance, HR and sales have stayed for a long time, there’s one staff member who has stayed since we started,” he says.
However, generally the key to retention across the board is enabling staff to “grow” within the company Eikeland asserts: “We grow people and they see that the longer they stay the more they can grow.
“We run internal training programmes as on-the-job training is very important and we have a lot of development schemes as part of The Rezidor Group.”
Saudi Arabia has a huge hotel development pipeline over the next four years and as the Kingdom’s hospitality industry develops, Eikeland hopes to see more nationals seeking to work in hotels.
With the development of Saudi Arabia’s hotel industry comes added competition. According to data by hospitality research firm Christie + Co, there are 6896 budget and mid-scale hotel rooms in the current project pipeline, including 480 rooms within two new Park Inn by Radisson hotels coming up in Jeddah and Riyadh.
“It’s typical, for Europeans especially, to look for four-star hotels because they are value for money and many firms like their management to stay in four-star properties because it gives off the right signals about the company,” Eikeland observes.
“So there is a market for more Park Inns and four-star hotels in Saudi Arabia in the future without a doubt,” he says, but adds that the luxury market in the area is a different story.
“There are many prestigious hotel projects coming to Al Khobar and Dammam areas, and the rest of the Kingdom, in the future. At this point, the demand is not enough to support only five- and ‘six-star’ hotels. There are a huge number of people who are normal people looking for mid-scale properties,” he says.
According to Eikeland, an oversupply of luxury, high-end hotels in the area is threatening to negatively impact business as five-star hotels under pressure slash rates to four-star prices.
“I see the war among the five-star hotels getting tougher and if that gets tougher it’s going to get tougher for me because their rates get closer to mine,” he says.
Eikeland believes part of the problem is due to the fact that minimum rates for each hotel category are set but not enforced by local tourism bodies.
“It is not working, the caps have been there for more than a year, but hotels are breaking the rules. They know they should operate within the rate frames of four- or five-star hotels, but they’re not being punished for not doing so. It upsets me because the rules are crystal clear, I would like to see them enforced.”
However, he welcomes ‘friendly competition’: “It’s difficult to compete with a five-star hotel. I’d rather see more four-star hotels, then we can compete on the right level.”