The Viceroy Hotel Group entered the region when it re-flagged the Yas Hotel as the Yas Viceroy Abu Dhabi in 2011. Six years later, the operator has a confirmed pipeline of three in the Middle East, including the Viceroy Palm Jumeirah Dubai, the Viceroy Jumeirah Village Dubai, and the Viceroy Princes Island Istanbul.
Heading the brand in the region is Anton Bawab, who, prior to joining the operator 10 years ago, spent four years with Mubadala’s Real Estate & Hospitality team. His first project in the region was the property in the UAE capital, which, in 2016, hosted its eighth Formula One. And while the sporting event boosted Abu Dhabi hotel revenues in November compared to the rest of 2016, profit per room in the UAE capital was down on previous years, according to new data from HotStats.
The HotStats survey revealed that at US $151.59, profit per room at Abu Dhabi hotels in November was 1.4 times higher than the year-to-date 2016 figure for the city at $63.33, but was 20.3% below November 2014 levels. The HotStats statement said that while the Grand Prix is a key event in the Abu Dhabi calendar and hotels are typically at capacity enabling management to leverage room rates, the impact of the event in 2016 was below previous years.
While this data was not available at the time we interviewed Bawab in November 2016, he admits at the time: “The market is soft for everyone. It’s not helpful that we have an immense amount of supply coming in, so we’re all in the same boat.”
He, however, says that the hotel has “one of the most understanding, supportive ownership groups” in the form of Aldar. Bawab reveals that Aldar is looking at investment into the property, with facilities being upgraded, and new concepts being worked on. As part of this investment, the hotel opened its kids’ club ‘Generation V’, which Bawab says “took a meaningful space of the hotel”.
Bawab continues: “It took a meaningful investment and we are looking now at the lifecycle of the food and beverage outlets. Over the next couple of years you’ll see a few new concepts coming up, just to make sure we are still relevant — not just to people who want to come and stay with us but to people who live around us.” He points out that the population of Yas Island is set to increase, with the launch of residential developments such as Yas Acres.
“We see that the island is maturing. The island was built at a phenomenal speed and there’s a long-term plan for the island but we had to work through the first five years. I tell everyone, we probably opened five years too early, a hotel of that size, and even the hotels across the road from us. We needed a critical mass to function all year round, and that’s happened with the beach coming up, Ferrari World opening, and [Aldar has] done a brilliant job in ensuring there’s a new thing coming up every year. With Miral taking shape, they’re putting a real engine behind promoting Yas as a destination.”
The hotels around Yas Viceroy have the same owner, so the properties collaborate around bigger events. Bawab notes: “We don’t compete because of the price difference. We will collaborate in terms of big events, and being owned by the same ownership group, we have started to collaborate in terms of procurement. There’s no sense in having seven different contracts and we’re starting to see those efficiencies now come through.”
From one mega-project like Yas Island to another, Viceroy Hotel Group is set to open the Viceroy Palm Jumeirah Dubai on The Palm — with March 31, 2017 being the scheduled date of opening at the time of going to press. The project, which was initially scheduled for a 2016 opening, is targeting a Q1 2017 debut.
Bawab admits the initial date was “ambitious”. He says: “It’s a 1.2 million square foot development. There are 1.2 million to the power of 10 opportunities for errors. The first programme we went out to the market with was a little ambitious and probably underestimated the complexity, and the number of players and stakeholders that it depended on. Nothing dramatic happened, nothing caused a delay, other than us taking a step back.”
The Palm Jumeirah is a sub-market within Dubai’s hospitality sector, and Bawab believes that it defies all the market dynamics in the rest of the emirate. This is why he’s not concerned by the level of competing hotels in that district. “We at Viceroy have come from a different proposition from anything I have seen in Dubai. And I haven’t seen all the new kids on the block yet but knowing what the brands are, we have that proposition, and that allows us to tap into the leisure market of Dubai.
“If you look at the Dubai market, The Palm defies all the market dynamics. If Dubai goes up by two the Palm goes up by eight. The beachfront on The Palm is finite and we have one of the most prime locations on The Palm. Because we’re on, and not in, The Palm, accessibility in and out of the hotel is fairly easy,” he says, adding that the target market for that property will be sophisticated, high-net worth individuals (HNWI), in their mid-30s to late-40s, who are discerning and will not accept compromises.
Another Dubai project on the cards is the 60-storey Viceroy Dubai Jumeirah Village, which does not have a scheduled opening date at this stage. Unfortunately, in August 2016, the construction site broke out into flames. Thankfully, no one was injured. There is no indication of delay, if any, to the project, and Bawab does not give anything away either. He says honestly: “Given that it’s a construction-related question, I’m going to stay out of it as I’m the operator. We have not yet entered the building, we don’t have staff on the ground, we don’t have systems installed, it’s all shell and core.”
Developed by SKAI, the US $373 million (AED 1.37 billion) project’s building design has won awards, and been patented and registered as a trade mark in 186 countries, with plans to replicate similar structures in other major gateway cities around the world. The property will feature breathable architecture allowing sunlight to shine through the core of the tower and a vertical microclimate design with over half a million square feet of flora, naturally helping maintain the temperature. When completed, it will comprise 254 serviced apartments each with private sky gardens and 247 hotel guest rooms. Bawab says: “The design is very intriguing, it doesn’t come without its intricacies and challenges to operate but this is what we do. I struggle to think of who else could have looked at it and said, ‘yeah we can do it.’ It’s not your run-of-the-mill hotel, so we look forward to it.”
The third project in the pipeline is in Turkey, with the Viceroy Princes Island Istanbul. The property is located on the island of Büyükada in Turkey’s Marmara Sea, with 77 guestrooms, suites and serviced residences, a traditional and restored Ottoman Grand Mansion and a “Yali” seafront mansion, extensive gardens and a private cove.Initially meant to open in March this year, at the time of going to print, Bawab confirms over email that the opening has been moved one year ahead. He says: “The opening has been rescheduled to 2018 given the recent tragedies in the city, and wider country. It would not have made sense to open commercially this year.”
Bawab says that the situation with Istanbul has been unfortunate, and continues: “It’s definitely not going to give us the projections we thought we were looking at when we looked at this hotel, but we’re in it for 25 years so if the first two years are softer than we thought then it’s a bump in the road. It’s not detrimental.
“So will we see the same number of international visitors to the city? No, they’ve dwindled. Will it come back? It will come back much faster than anywhere else. It is, in my view, as strong as rebounding as London, Paris or New York.”
While there have been bumps in the road for Viceroy in the region, Bawab is not fazed. He claims there are many more properties in the works which haven’t been announced yet. The strategy is to only reveal the projects once the entire development process — from land entitlements to permits to financing, to engagement of architects, contracts — is confirmed. However, Bawab chooses to stress on the slow and steady pace of the brand. He comments: “Viceroy doesn’t have a cookie cutter approach to design, or the kind of properties. If we find an opportunity that allows us to cater to the Viceroy guest, then we will do it.
“And because of our size I look for opportunities with developers that we get along with. We don’t do short-term agreements. That’s why when you ask me about Jumeirah Village, whether it’s delayed by six months or a year, we’re in that project for 30 years, so six months at the front end is not going to be that damaging. I look for partners with whom I don’t mind being their partner for a lifetime.”
He continues: “I am not going to tell you that we’re going to hit so many properties by so many years. It’s so clichéd and it’s not us. Having just told you what I told you, if we do one great project in one year we’re going to go for it full force, and if we find four we’re going to go for these four. We’re very appreciative of the fact that [because of] our size, we’re not going to be able to open one hotel a month, so you won’t find us opening 12 hotels a year. We’re very mindful of that because it would be unfair to the properties that we currently have if we were to expand that rapidly.”
“At the same time we’re going to continue the growth and continue serving all the properties that are being designed. So we’re not really a 12 or 13-hotel company, we’re a 24-hotel company because I have that many hotels on the drawing board with design meetings with designers and architects, owners, budgets, pre-opening budgets — they take as much time as an operating hotel,” he concludes.
