In this episode of AHIC talks, Jonathan Worsley spoke with Makram El Zyr, a second-generation hotelier whose father Selim El Zyr was one of the founding partners of Rotana. As the brand's Corporate VP of Development, Makram now leads the brand's ambitious expansion plans, focused on building their relationships with owners across every new project they move into.
Welcome to AHIC Talks, a podcast for the Arabian & African Hospitality Investment Conference: The annual gathering of the hospitality and investment community for the Middle East & African region. Tune in each week to hear our team at AHIC share insightful conversations with industry leaders and innovators in the hospitality and investment community. And now, let's dive into this week's episode.
Jonathan Worsley: So on this episode of AHIC Talks I'm delighted to have Makram El Zyr, who is the Corporate VP for Development for Rotana Hotels. Makram, delighted to have you. Thank you for joining us.
Makram El Zyr: Thank you Jonathan. Pleasure being here and looking forward to AHIC in September.
Jonathan Worsley: Yeah, well I think we're all looking forward to AHIC in September and getting together in person. Now Makram, tell us a little bit about yourself and how you got into the hospitality industry.
Makram El Zyr: Jonathan, I was born into a hospitality family. I mean, it started off with my grandfather actually, who opened up a restaurant and a catering business in Lebanon in the 50s. My father, my uncle, my cousin and my brother were all hoteliers. We were around back of house running around, we played tennis every day, we lived in hotels. So hotels were our life. Actually funny enough, as soon as I graduated from school, I joined the American University in Beirut, and I wanted to be actually a mechanical engineer. So I did one year of mechanical engineering and then I woke up one day and I said, what am I doing? Rotana was at the time 3-4 years old. Rotana was established in '92. I decided to get into hotels in 95, so I switched careers. I did my bachelor's in Business Administration and then decided to go to Lausanne (EHL). That's where my grandfather, my father and my uncle went to study hotel business. So it all started off in tennis courts and kitchens and laundries when I was a kid.
Jonathan Worsley: What an amazing background, an amazing life to have grown up with your grandfather and your father developing Rotana hotels.
Makram El Zyr: Yes, I mean actually, my grandfather was more into catering and restaurants. But my father went to Lausanne in the late 60s. He then moved to -- when he graduated, he got his master's from Cornell, and worked at Hilton for about 20 years before deciding to establish Rotana along with the chairman Nasser Al Nowais in '92. And the first hotel was in 1993, actually the Beach Rotana in Abu Dhabi. So I was also back of house at the Beach Rotana going around and...
Jonathan Worsley: So you started in your first hotel in '93 and in 2022 you'll have around 80 hotels in operation, I believe?
Makram El Zyr: That's correct. That's correct. I mean, we have 68 today operating and by the end of '22 we expect to open 12 hotels, so up to 80 hotels by 2022, which is exciting for us.
Jonathan Worsley: Truly exciting. And where have you found the opportunity in the region?
Makram El Zyr: When the company was established in 1992, the decision was that we wanted to manage hotels in Abu Dhabi, one, two hotels, three hotels. The founders, my father and Nasser Al Nowais wanted to fill in the gap which they saw growing. And this gap was the international companies were losing touch with the owners. They were growing phenomenally fast at the time. And Nasser Al Nowais, he was at the time, the chairman of the Abu Dhabi National Hotel Company. The Abu Dhabi National Hotel Company owned all the hotels in Abu Dhabi, or the majority of the hotels, and he had management contracts with these chains. So the attention they were getting was getting less and less. So they decided to create this company to replace these international players and stay close to owners, to put themselves in the shoes of owners. If you see where we are today, we're always within a certain radius where we can service an owner, we can always be close to an owner within a couple of hours. We did have opportunities in Sydney and Moscow and US and so on, but we will not go there before we fill in the radius to reach them. So opportunities Jonathan, are still within our region and extended region. I mean, Saudi is a massive market for us. We have today seven operating and seven under different phases of construction. The other side of the circle is Turkey and CIS, amazing opportunities there.
Jonathan Worsley: Just come back to the owners for a minute. What is it you're doing differently to some of the other brands out there?
Makram El Zyr: Mainly Jonathan, we are from the region. And our radius in the region is still within, let's say a four-hour flight. Anytime there's an issue, anytime there's a need for vice-chairman to interfere and they do. Another reason that Jonathan is our size, we are 112 hotels today, compared to the mega-companies with thousands of hotels, we're just a drop in the ocean. The chairman and the vice-chairman have time to give the attention, to give the knowledge, their expertise, their recommendations, to owners and hotels. And they do. We know that the founders of the companies are both hoteliers, and they come with vast, vast experience. So this makes a big difference. And we noticed that especially during 2020, and the first six, seven months of 2021, because of our size, and because we were quick to react, we managed to, I wouldn't say save but we managed to protect the hotels we managed.
Jonathan Worsley: And I would imagine also, there's a lot of pride in having a regional brand as well for these owners.
Makram El Zyr: Absolutely! I mean, a lot of these owners wanted a regional company, someone that they could reach out to, easily reach out to. Someone that would understand their concerns, that would understand the market they offered. A lot of them wanted at one point or somehow the expertise, the muscles of the mega-companies, but they found out that even with a small company like Rotana’s is relatively small, we still have the experience, we still have the knowledge, we still have the technology and the platforms, just like any other player. So we are able to deliver. And honestly, every hotel we operate today Jonathan has a comp set. And we are, if not number one, we are number two or number three, so we're giving the mega-companies, in most instances a hard time. This shows that we are capable.
Jonathan Worsley: Yeah, good for you. And you're purely a management company?
Makram El Zyr: It started off as a management company, and this was a decision taken by the founders when they established Rotana. And they moved completely away from ownership or equity or participation because they did not want any owner to feel that another hotel is being favored because we have equity or we have a stake. And franchise was not on the table at the time, because it was more of protecting the brand, protecting the name. We wanted to be in control. We wanted to make sure that every standard is respected and everything is according to plan. But in 2018 we decided to start franchising. And it took us about seven months to do paperwork and everything needed for us to be able to franchise hotels, and we have successfully done that. We have seven today in our portfolio.
Jonathan Worsley: Excellent. Well done. And you're also expanding overseas. You bought two hotels in Turkey, you're also in Bahrain.
Makram El Zyr: Correct. I mean, we're expanding a bit more beyond our region, our comfort zone, let's say. So we are very active in Africa, we are very active in Turkey. We have two opening up, sorry, three opening up in the next two years. And we are very active in CIS countries and Eastern European countries I say. One of the strategies which we have adopted Jonathan, I don't know maybe 5-6 years ago is we are following where GCC travelers and businessmen are going to. So we see a lot of movement between the GCC and the Eastern European countries like Georgia, Azerbaijan, CIS, Croatia, Montenegro, for leisure and for business. So these countries and cities are naturally destinations for us. Because people have tried us, they've stayed with us, they know what to expect from Rotana, so they would automatically stay with us in any of these countries.
Jonathan Worsley: Right. And tell me a little bit about your brands as well, I think you've got five brands in total at the moment.
Makram El Zyr: Yes, that's correct. So our main brand is called Rotana Hotels and Resorts and these are the mainstream five-star hotels based in cities and in the resorts. They come with extensive F&B facilities, spas, depending on location, conference and banqueting facilities. Rotana Hotels and Resorts also exist as four-star hotels - smaller rooms, smaller facilities, less F&B, less conference and banqueting. Our second brand is called Arjaan Hotel Apartments by Rotana and these are your typical extended stay studios, 1, 2, 3 beds, penthouse, villas, and they offer hotel services. The third brand is called Centro Hotels by Rotana and these are the limited-service lifestyle hotels. They come in with very limited facilities but essential facilities. So everything you need in a hotel. There are no extravagant lobbies and additional staff and so on. So you get just what you need. These are typically next to exhibition centers, next to industrial areas, next to airports. The fourth brand is called Rayhaan Hotels and Resorts, and these are dry hotels. These are hotels that do not serve alcohol or have any alcohol-related facilities. And they have the exact same specs as Rotana Hotels. Same finishes, same specs, same configurations, but they just do not serve alcohol. And do not serve alcohol either because of the laws of the country or if the owner does not want us to serve alcohol. And the fifth brand is called Residences by Rotana. And these are branded residential apartments or accommodation that could be a villa. And these are typically close or associated with hotels. Because the hotel team is the team that provides the facility management to these branded residences. So automatically owners can rent at a higher rate or they could sell them at a premium because they are branded. And we have branded Residences by Rotana in Abu Dhabi, in Dubai, in Doha and Istanbul. So it's a model that's picking up speed.
Jonathan Worsley: Interesting. With the challenges of COVID during the past year, how have you managed to develop your pipeline and what brand is it that you're having the most success with?
Makram El Zyr: During COVID, I mean, it was extremely difficult. Most projects went on hold, or they were dormant. Projects that were in advanced stages of development or construction, we were still involved but movement slowed. There was not much movement on the ground. But in terms of signing new contracts, it was mainly Jonathan everything that we had from before, everything that we had already started negotiating and discussing and so on. These are the ones that we signed in 2020. In 2021 things are a bit different. I mean, we see more movement on the ground, hotels are being constructed, feasibilities are being done, so it feels like activity is back on track. Gave developers assurance that during good days and bad days they could have the stability they look for.
Jonathan Worsley: Right. With your contracts, do you find that you can be more competitive than some of your competitors as well?
Makram El Zyr: Yes, absolutely Jonathan. I mean, several of our owners are owners of international brands. And we know, I mean, they tell us that we are more flexible, we are more approachable, we are understanding of their situation, of their needs, of the market's needs, not to discount our flexibility in terms of fees, our structure and so on. So we do have this advantage.
Jonathan Worsley: We're all busy in Saudi at the moment. Tell me what are you doing in Saudi? I know, you said you had six hotels there at the moment...
Makram El Zyr: Seven and a seven.
Jonathan Worsley: Seven, okay.
Makram El Zyr: Yeah, seven operating hotels and seven under different phases of development. And we are, very, very, very aggressive in Saudi. We are establishing actually an office in Saudi and we are going to have a development team in Saudi to keep on feeding our pipeline with properties in Saudi and that's not only in tier-one cities, even in tier-two cities, tier-three cities, this is where the opportunity is. And we signed a couple of months ago, a fantastic 150 key hotel in Al Baha. So we see a lot of movement in the second-tier and third-tier cities. Exciting days coming.
Jonathan Worsley: Makram congratulations on the rollout of your brand and I must say you, your team and the founders must be proud to see the Rotana Brand stretching further afield and making impact.
Makram El Zyr: Thank you Jonathan.
Jonathan Worsley: We're delighted that we're going to be having the evening reception at Timo Restaurant, I believe it is, and Terrace at the Al Jadaaf...
Makram El Zyr: At the newly opened Al Jadaaf Rotana Suites.
Jonathan Worsley: So on day two of AHIC. So we're very much looking forward to that. Tell us a little bit about that hotel.
Makram El Zyr: It's a fantastic hotel that opened about three months ago in Dubai, in the Al Jadaaf area. It has about 400 keys; a hybrid between hotel apartments and hotels. So you will find very comfortable rooms, very spacious rooms that have the flexibility to become a one-bedroom apartment or a two-bedroom apartment inter-connecting and so on. So it has all the fantastic facilities and services. I'm sure everybody will enjoy it in a couple of months.
Jonathan Worsley: And also the nice thing about that location is you're close to the airport, but still only 10-15 minutes from downtown Dubai. So very convenient. And you've got the tram as well.
Makram El Zyr: Yes, not far away. So location is very, very strategic over there.
Jonathan Worsley: Well listen Makram, wonderful having you on this AHIC Talks and I look forward to learning more about your plans and your progress at AHIC in September. Congratulations on everything you're doing. What an exciting thing to be growing such a fabulous family business from where it's being used for starting in '93 and the first hotel, and today, leading the growth of the company. So tremendously exciting. So great to have you on this talk and we shall see you very soon. Thank you so much for joining us.
Makram El Zyr: Thank you very much, Jonathan. And I'm looking forward to seeing everyone actually, finally face-to-face in September.
Jonathan Worsley: Absolutely.
Makram El Zyr: Thanks a lot.
Jonathan Worsley: Thanks so much Makram.
Makram El Zyr: Thank you Jonathan.
Thank you for listening to AHIC Talks, a podcast for the Arabian & African Hospitality Investment Conference. For a full transcript of this conversation, along with other reports and insights visit AHIC.com. We look forward to welcoming you and your colleagues live and in-person at AHIC in Dubai from the 20-22 of September 2021. Register and purchase your pass today at AHIC.com and save on the early bird rate. For any questions email us at Hello@AHIC.com. Until next week, stay safe and keep well.
Published 03 August 2021