Abu Dhabi National Hotels (ADNH) has launched a company that will manage hotels for other owners.
ADNH CEO Khalid Anib told sister title Hotel Design & Build: “We have developed a company to manage [hotels] on behalf of other owners under international mid-scale and upscale brands.”
This development has been quite a recent turn of events, and this division of ADNH will be known as Abu Dhabi National Hospitality Management company, or simply Abu Dhabi Hospitality.
While Anib cannot yet reveal which hotel, he confirmed to Hotel Design & Build that the division is already operating one property in Dubai.
Anib believes that franchising or third-party management is the future of the Middle East. He points to the developments in other mature markets as a sign of what’s to come here: “Today in the US, 85% of hotels are franchised. Nearly 60% in Europe are franchised, and this is growing significantly now.”
Anib adds: “[Third-party management] is something that will grow substantially in the Middle East. The market in the Middle East is becoming sophisticated and mature, and therefore owners are looking for different alternatives when it comes to the management of their properties.”
Owners, Anib noted, want to be in control of the bottom line. He told Hotelier Middle East in the past that the main reason owners picked a franchise model was the daily operational expenses management rather than the fee structure. At the end of 2017, he said: “We just want to be in control of the daily operational measures and related expenses. Look at P&L statement for franchise and managed hotels, there’s a big difference in the ratio. It’s more efficient in the franchise hotel.”
Read the full interview in the inaugural issue of Hotel Design & Build (May 2019).