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Michael Scully, CEO, First & Foremost: Changing market dynamics threaten hotel performance

Although hotels in the Middle East continue to outperform the global average, increased local and regional competition set against a backdrop of global economic uncertainty, has put new and enhanced revenue streams firmly front of mind for hotel owners and operators.

Hospitality company First & Foremost to partner with hotels – innovative marketing strategies and creative F&B concepts needed to drive-in rooms and other revenues as uncertainty clouds industry optimism

Although hotels in the Middle East continue to outperform the global average, increased local and regional competition set against a backdrop of global economic uncertainty, has put new and enhanced revenue streams firmly front of mind for hotel owners and operators.

Dubai-headquartered hospitality company, First & Foremost Hotels & Resorts, is witnessing increasing demand from owners, operators and investors, fully aware that the risk to their business performance is very real.  

According to CEO, Michael Scully, who will be addressing delegates at Boudoir Prestige, a new interior design and hospitality event on 17-18 September at Dubai Park Hyatt, there are three main areas of concern.

“So far Dubai in particular has benefitted from unrest in other parts of the region, such as Tunisia, Bahrain, Egypt, Syria and more recently Lebanon. However, it would be foolish for any business here to rely on that revenue stream.

“Equally, the global economic outlook is uncertain, the Eurozone is in turmoil, the UK is in recession, even China’s export-led economy is experiencing slowing growth. And if some of these traditional markets dry up, new ones will be needed to replace them.

“Finally, despite massive growth in the number of hotel rooms, the Dubai market, for example, has shown remarkable resilience so far, but the rollout of a further 11,307 rooms in the next couple of years, could squeeze business elsewhere,” commented Scully.   

However current levels of business are impressive, recent Q2 results from major international chain Starwood, showed a 11.2% RevPAR increase for the region, way ahead of its 6.9%, global average.

In addition, according to the latest STR Global report, the Middle East has seen an increase in demand in the first half of the year with regional RevPAR increasing by 7.7% to US$99.38. UAE hotels saw occupancies of 67.6%, up by 5.4% against June 2011 with RevPAR rising by an impressive 11% over the same period.

While 2012 has, so far, been a positive year for the industry, Scully reckons that pressure is undoubtedly building on hotel operators to develop focused and innovative strategies for success in order to gain and maintain a business edge. To support this trend, First & Foremost is ramping up its activities and although it still offers a broad portfolio of services, it is now focusing on strategies to generate additional revenue.

“We are not just another ‘consultancy’,” said Scully. “We are a results-driven business in a results-driven industry. Our USP is that we have a proven track record of how to drive increased revenue and profit.

“We are perfectly positioned to create a ‘working partnership’ with a range of stakeholders, whether they are owners, operators, consultants, financiers or investors. Adding value to a successful hotel business, or troubleshooting an underperforming one, to ensure investors are getting a sustainable return, that represents its true business potential and more importantly translates to the bottom line,” he added.

Scully is one of the UAE’s most successful hoteliers, with over 20 years’ experience in the region, during which time he’s opened six hotels and developed over 50 successful bar concepts including the renowned Barasti Bar concept, one of the highest grossing bars of its kind in the world.

He is also responsible for creating numerous restaurant concepts, from Arabic to Italian, which have driven some of the highest square foot returns of any hotels in the region, his success adding value to hotels even stretches as far as London’s West End.

In addition he has also launched a number of unique F&B loyalty schemes that have driven in additional revenue, not merely diluted the existing revenue base, which is the case with many ill thought out discount schemes.

Scully is also the founder and a director of Coffee Planet, the UAE’s fastest growing coffee company and now a multi-million dollar enterprise.

Theodore Koumelis
Co-Founder & Managing Director - Travel Media Applications | Website

Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.

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