Chinese hotel brand eyes first openings in Dubai and Saudi Arabia

Ji Hotel brand uses modular designs to quickly fit out new-builds

H World International (HWI), a subsidiary of H World Group one of China’s biggest multi-brand hotel chain management groups is planning to bring its Ji Hotel brand to Dubai and Saudi Arabia, the company’s chief executive said on Wednesday.

While no agreements are in place, Oliver Bonke said the Chinese company could have up to 10 Ji Hotel properties established in Dubai in the next decade and a similar number in Saudi Arabia.

HWI’s portfolio includes well-established European brands such as Steigenberger, IntercityHotel, Maxx and Jaz in the City.

Mr Bonke said the company is “aggressively” looking to re-establish a Steigenberger’s presence in Dubai, having been deflagged from its location in Business Bay in 2021.

He said HWI would announce significant hotel projects in the kingdom in the coming weeks.

With a market valuation of $12 billion, H World Group operates 9,394 hotels in 18 countries. In 2019, it acquired Deutsche Hospitality in a deal worth around $780 million, with part of the strategy to take what has grown in China to the international market.

In February, Deutsche Hospitality was rebranded to HWI as part of its overseas growth plan, under which the first Chinese hotels will open in Dubai and Saudi Arabia.

Dubai last year recorded its best annual tourism performance, with international arrivals increasing by 19.4 per cent to 17.15 million, according to the latest data published by Dubai’s Department of Economy and Tourism in February.

Hospitality data analytics firm STR in March said occupancy levels in Dubai reached an all-time high of 90.8 per cent thanks to events held in the first quarter. Revenue per available room (RevPar) reached $212, up 14 per cent on the same month last year.

STR said most of the Middle East’s hotel pipeline activity is focused on Saudi Arabia (42,464 rooms) and the UAE (19,046 rooms).

Plug-and-play model

A midscale brand established in 2010, there are about 2,000 Ji Hotels in 31 provinces and regions throughout China.

Last year, it opened 900 hotels in China and expects to see similar growth patterns this year.

Its first overseas property Ji Hotel Orchard Singapore opened in 2019 and now it is looking to Saudi Arabia and Dubai for expansion.

Ji Hotel uses a plug-and-play model – or modular – where the rooms’ interiors are part-assembled in China and then installed at the property within one hour.

“We started in Shanghai working with a company that actually does the interior design and fit up for BMW and Lexus and contractors, and we essentially tasked them with the idea to develop a plug-and-play model for hotel rooms,” he said.

There are five modules designed to fit each room bedside/headboard, toilet/shower, sink/mirror, TV/entertainment and desk area.

It allows HWI to change and upgrade the interior every few years, using sustainable materials that can be upcycled or recycled.

Ji Hotel is currently on its fifth design cycle, Mr Bonke said.

“In China, we have the advantage of scale because we have 2,000 of them. We have them manufactured, shipped on site and then essentially plugged in,” he said.

“In China, and this doesn’t work for the rest of the world at this point, we can change a room around in an hour.”

In their search for “scalable markets”, Mr Bonke said Saudi Arabia and Dubai were identified as locations where HWI “can do 10, 15, 20 of these hotels”.

“The business model behind it is to leverage our experience in China with scalable supply chain plug-and-play models,” he said.

Focus on Dubai and Saudi Arabia

The first phase of its expansion will focus on Saudi Arabia, followed by Dubai.

“Right now, Saudi Arabia is our first go-to because there’s a lot that needs to happen in the midscale and in the economy [end of the market] because everybody’s focused on luxury, which is normal,” he said.

“Dubai did the same thing 20 years ago. You start with the luxury and upscale brands. Now you got to go with the next layer.”

While HWI’s growth is centred on franchise managed for all its brands, Mr Bonke said it was looking at joint venture partnerships for Saudi Arabia and Dubai.

“Maybe somebody brings in the land or somebody brings in the building, we could be an equity investor on something like that because we feel this business model is exciting and different,” he said.

“We want to put our money where our mouth is. For a scalable partnership, we would also invest.”

While the company doesn’t have an exact plan for the number of Ji Hotels in Dubai, he said up to 10 was feasible.

“Having five to 10 Ji Hotels in the city is not a problem because they serve micro-neighbourhoods,” he said.

“They’re small hotels 100 to 120 rooms so they serve multiple small neighbourhoods.”

HWI currently has one property in the city, the IntercityHotel at Dubai Jaddaf Waterfront, which opened in 2021. The planned opening for Jaz in the City in Deira has been delayed.

HWI has 16 properties in Egypt, four in Oman, two in Doha, two in Ras Al Khaimah and one in Riyadh.

It did have a Steigenberger in Business Bay but that agreement ended three years ago and Mr Bonke says the company is working on getting its brand back in Dubai.

“We need and want to be in Dubai with a flagship Steigenberger hotel,” he said.

“One of my priorities is to talk to local investors to see where can we have a flagship Steigenberger, because we need that brand in Dubai, just as we have it in Munich or Beijing or Shanghai. Steigenberger is a critical strategic priority for us.”

Source: thenationalnews

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