Millennium and Copthorne Hotels looks to expand to 50 Middle East properties

The UK-based Millennium and Copthorne Hotels group aims to expand its footprint in the region with additional hotels in the UAE and plans to enter Saudi Arabia.

The hotel chain operator has 110 properties globally and manages brands such as the five-star Millennium and Grand Millennium, four-star Copthorne, and three-star Kingsgate. The company manages eight hotels in the UAE.

“We are looking at operating 50 properties throughout the Middle East by 2017,” said Naeem Darkazally, the vice president of sales and marketing for Middle East and Africa at Millennium and Copthorne. It operates 17 properties with 5,000 rooms in Kuwait, Jordan, Qatar, Oman and Iraq besides the UAE.

The company expects to have 10 new properties in Middle East in the next 18 months, with 6,000 rooms overall across the UAE, Kuwait, Oman and Saudi Arabia. Three of them will be in the Emirates.

In Abu Dhabi, the company will add the 677-room luxury Bab Al Qasr hotel on the Corniche, which is expected to open in the second quarter of next year. This would help it diversify its portfolio to leisure travel from corporate hotels.

Copthorne Millennium Fujairah, which will be attached to a shopping mall, and Millennium Golf Resort in Al Ain close to Jebel Hafeet, are also expected to open next year. They will have more than 200 rooms each.

The company also expects to open a 151-unit executive apartment development in Dubai Marina next year, along with the 218-room Biltmore Bateen Marina Abu Dhabi hotel by the second quarter of 2016.

“Dubai has gained its spot in the international market in both corporate and leisure, and with the big support from Etihad and Emirates, which will keep expanding destinations, it helps us to put the cities on the global map,” said Mr Darkazally.

The revenue per available room in the Middle East rose by 9.8 per cent last year over the previous year, and overall revenues rose by 23 per cent year on-year.

The expansion plans also include Saudi Arabia, which is expected to emerge as the second-largest market in the region after the UAE for its Millennium and Copthorne brands. The kingdom has 20 properties waiting to come on stream over the next three years, adding 6,000 rooms in both primary and secondary cities, Mr Darkazally said.

Last year the company reported pre-tax profits of £263.6 million (Dh1.59 billion), a 54 per cent jump from 2012. Much of it came from condominium sales by its Singapore subsidiary, Glyndebourne Development. Global revenues came to £1.04bn, a 35 per cent rise from a year earlier.

As it expands in the region, Millennium and Copthorne will be among a handful of companies from South-East Asia such as Dusit Thani, Anantara and Banyan Tree, that are eyeing this part of the world for growth. Their main focus has traditionally been China and gateway cities such as London, New York and Singapore.

Earlier, “the overall feeling was a reluctance to take the risk of entering a market that was developing and to their more conservative view uncertain”, said John Podaras, a Dubai-based partner at the Hotel Development Resources consultancy.

“Additionally, at the time it was more strategic to focus on expanding their footprint into the local markets such as China, which were potentially far larger than the GCC and Middle East.”

Some operators who did look at the market but pulled out of it include Japan’s JAL Hotels and Hong Kong-based Langham Hotels, which came close to signing a few properties.

“Additionally there were other operators who found it difficult to adapt to the owner’s and market’s requirements,” Mr Podaras said.

But things are changing now.

“However, it is noticeable that potential newcomers are cautious, more so than pre-2009,” he said.

“In line with most operators, they are more careful about the owner and developer. They need to see proof of funds, they monitor closely the development process and they are cautious about committing too much in the way of owner’s priority and equity.”

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Millennium and Copthorne Hotels looks to expand to 50 Middle East properties