The global net income of the American multinational hospitality company Hilton reached $225m during the fourth quarter (Q4) of 2018, while the full year’s net income recorded $769m, according to Hilton’s Fourth Quarter and Full Year 2018 Results. This is setting Hilton’s 2019 off to its most dynamic year, while celebrating 100 years pioneering the hospitality industry.
Amir Lababedi, the managing director for development in the MENA region at Hilton, told Daily News Egypt in an interview that Hilton aims to expand its capacity in the Middle East, especially in Egypt, explaining that Hilton plans to add 1,683 new rooms by 2025 in Egypt.
“Hilton group is made up of 17 brands, including Waldorf Astoria, Conrad, Canopy, Hilton, Curio, DoubleTree, Tapestry Collection, Embassy Suites, Hilton Garden Inn, Hampton, Tru, Homewood Suites, Home2Suites, and Hilton Grand Vacations, in addition to new brands, called Signia and Motto,” said Lababedi.
DNE spoke with Lababedi about Hilton’s expansion plans in Egypt and the Middle East, in addition to his evaluation of the Egyptian tourism sector’s performance and challenges. The interview’s transcript is below, lightly edited for clarity:
Does the group have expansion plans in Egypt? And what is your five-year strategy?
We have been working in Egypt for 60 years. We already have 16 hotels which are currently operating and eight others that are in the pipeline with more than 1,600 rooms to open during the upcoming five years. We are always on the lookout for more hotels and more deals to sign, so these numbers are expected to increase.
Those 16 hotels are divided into 15 Hilton hotels and a Conrad hotel.
Besides, we are expanding into new geographical territories in and close to Cairo, such as the New Administrative Capital (NAC), New Cairo, the 5th Settlement, Sheikh Zayed, and Sixth October City. We are also looking forward to increase our presence in secondary markets and national projects, such as the Suez Canal Area Development Project, Port Said, Damietta, Mansoura, Tanta, Assiut, and leisure destinations, including El Gouna, Al Alamein, and Ain Sokhna, all of which are set to expand our brand presence in the country.
Our priority in the coming years is to both expand into new geographical territories and introduce more of Hilton’s 17 brands into the country. Within these projects and locations, we firmly believe there is a need and great potential for new mid-scale and focused services brands, such as Hilton Garden Inn, and for our softer brands, such as DoubleTree by Hilton and Curio Collection by Hilton, which lend themselves well to both new build and conversion or adaptive re-use projects. All of these brands are being very well received by the hotel investment and development community, and we have many ongoing discussions to introduce all of these brands.
Currently, we already have two DoubleTree hotels under construction, one is located in El Gouna and the other is in Ain Al Sokhna. We also have two Hilton Garden Inn hotels which are also in the construction phase, one in Cairo Business Park close to the NAC and the other in Damietta which is a very important secondary city in Egypt.
Lastly, we are very much looking forward to introducing the first Waldorf Astoria into Africa in Cairo’s Heliopolis area. This project is currently undergoing rebranding activities.
While resorts do remain part of our strategy here and always will do, we need to ensure the quality of the product represents the brand. Therefore, we now have a number of hotels located in both our resorts and city locations that are undergoing renovations, such as Ramses Hilton, Hilton Pyramids Golf, Hilton Hurghada Plaza, Hilton Hurghada Resort, Hilton Alex Green Plaza, and Conrad Cairo. For those hotels that do not meet the criteria, we need to take the decision as to whether those brands will remain in the portfolio.
Tell us more details on the 1,683 new rooms to be inaugurated in Egypt?
The 1,683 rooms are divided into 257 rooms that are going to be opened in Hilton Cairo in Maadi by 2020, in addition to 179 rooms in DoubleTree by Hilton El Gouna Mangroovy Resort that are going to be opened by 2020, as well as 180 new rooms in Hilton Ain Al Sokhna which will be inaugurated by 2021.
Moreover, there are 130 new rooms to be introduced at Hilton Garden Inn Cairo Business Park by 2021, in addition to 120 rooms in Hilton Garden Inn Damietta Beach by 2021.
Also, there are 420, 200, and 197 rooms to enter operation respectively at Hilton Giza Pyramids by 2023, Hilton Port Said by 2023, and DoubleTree by Hilton Ain Al Sokhna in 2025.
What about Hilton’s expansion plans in the Middle East?
We plan to expand our capacity in North Africa in different brands, including Hilton Tangier Al Houara Resort & Spa by adding 297 rooms by the end of 2019 and Hilton Taghazout Bay Beach Resort & Spa by adding 170 new rooms by 2020.
Furthermore, 155 new rooms are to be opened in Hilton Garden Inn Casablanca Sidi Maarouf by 2021, and 150 rooms in Hilton Rabat will be inaugurated by 2022.
We have a dedicated development presence based out of Casablanca, Morocco as an illustration of our commitment to grow in this region.
What are the most common nationalities that visit Hilton’s hotels in Egypt?
Our top three markets are the Arab Gulf, especially Saudi Arabia, the UK, and the local market. We also started to see some Asian visitors.
How did Hilton deal with Egypt’s tourism crisis in the past eight years? And what were the occupancy rates of your chain during this period?
There has been a country-wide decline in occupancy rates due to the challenges that the local market was facing. Yet, we made sure during that time not to lay off any of our existing team members or shut down the doors of any of our hotels. Of late, the region has witnessed some of the strongest growth rates in the world.
What is the size of Hilton’s staff in Egypt?
Currently, there are 6,516 employees in our hotels in Egypt. We also have a dedicated corporate office based out of Cairo which supports those hotels.
Do you think Egypt’s tourism crisis is over? And how do you see the country’s tourism growth now?
We are observing a strong recovery in the market, and it is good to see that the crisis seems to be resolving and we are in a much stronger position now as a sector and as a hotel company in Egypt. Moreover, we are looking forward to adding more growth and further strengthening our footprint with more hotels and exploring new opportunities.
Finally, I also think that Egypt is one of the most important growing markets today and is one of our key growth markets for the region.
In your opinion, how has the floatation affected tourism in Egypt?
I think it has had a positive effect on the tourism industry in Egypt, as it became more affordable. I also think it can support domestic tourism.
What should Egypt do to attract more tourists?
I think it is important to ensure the diversity of the incoming tourists. It is also important to have the right products in the right location in order to attract different segments at different price points.
It is also essential to have strong brands in order to give the international tourism market the comfort and the quality, in terms of services and operations.
Egypt also needs to ensure the efficiency of the transport infrastructure that connects the airports to the new touristic destinations in Egypt.
Moreover, we need to ensure that the employees in the hotels understand and can deliver international- standard services. What is even more important that touristic agencies or hotels owners should guarantee a good culture and understanding of the tourism sector within their companies.
I need to highlight in this context that Hilton was recognised as number one work place by Fortune Magazine.
Over and above, we believe if employees are happy, then this happiness will be reflected on the guests, which will subsequently lead to their differentiation in the competition, and to strong performance in revenues, which will lead to a strong investment environment.
On another matter, I need to mention that what Egypt is doing now in terms of the e-visa is good, as it will make access to Egypt both cheaper and easier.