Grand Hyatt Dubai’s cherished legacy

Grand Hyatt Hotel has a cherished legacy with Dubai going back to over four decades and is one of its most well known names in the luxury hospitality sector. Aviamost’s Editor in Chief, Rita Boustany and her team recently met its new General Manager and Area Director for Hyatt Hotels in Dubai, David Mansfield to know more about the iconic property’s enduring appeal and about the Hyatt Group’s expansion plans  

You have been associated with multiple Hyatt properties and have a great history as a hotelier, but this is your first experience in Middle East.

Yes.

What is your idea about this part of the world?

Since I have been here, I have travelled to two GCC countries. My first business trip was to Saudi and I just got back from Jordan. I have always been inquisitive about this part of the world and the warmth and the hospitality of the people, particularly the history of this particular part of the world which resonates centuries ago. The warmth of the people is also something I feel I am fortunate to experience as it is very enriching. Wherever one goes one is offered tea and coffee which is very good. So hospitality is a very strong aspect here.

It is Arabian hospitality! So you feel it has uniqueness?

Yes. And you have to experience it personally to understand.

Dubai’s hospitality sector is different from other parts of the world it is said. In your opinion, what exclusivity does Dubai offer compared to other parts of the world?

Luckily I represent Grand Hyatt Dubai so you have come to the right place. I would say it is a one-stop-shoppe. It offers a very unique experience which cannot be replicated anywhere else and it’s difficult to verbalize it with someone who has not come here. From customers who come to Grand Hyatt one gathers that you can experience pretty much everything in Dubai. And I think this provides a competitive advantage for Dubai as a destination which is what we are doing, to make it a prominent destination in the global market.

But at the same time I think there are some challenges and restrictions like alcohol for instance which you cannot promote directly.

I don’t find it a problem. If you come here to this part of the world, you should first of all appreciate the culture which exists here. It’s not Thailand or Hong Kong Downtown. And it is not pitched as such. There are limitations to certain accessibilities such as alcohol as you mentioned, but it is not denied to the visitor. It is available and provided for but out of religious sensitivity it is restricted, which is how it should be and should apply. But which is also what draws tourists to Dubai as they want to experience the culture.

What adverse-feedback I get from customers when they speak about Dubai is that there is not enough to experience from the point of culture. I feel we should emphasize the heritage part of it as I feel we are not promoting it enough but should.

It is a young country.

True. The Grand Hyatt located in the cultural part of Dubai has been around for four decades and allows one to experience the culture of Dubai as it is located in the traditional, heritage part of Dubai. And this should be emphasized.

It was the landmark of Dubai. If I recall, Hyatt Regency and the Sheraton which is now Radisson, were the only two hotels.      

Yes! So we have pockets where we can experience the culture and I feel we should emphasize that part of it. For instance, during Ramadan too much emphasis is placed on what is not available, such as alcohol restrictions, but it is available, only during certain times. So we should focus on how Ramadan is celebrated here, as it is Dubai’s rich cultural aspect and not on what is restricted. So that would be my comment. So I see it not as a challenge but rather as an opportunity.

So it is your first Ramadan here?

No, it would my third actually.

Ah! You were here before?

You see I worked in Mumbai before and Ramadan coincides with the monsoons in Mumbai. As it is just a two and a half hours flight from Mumbai, my family and I used to fly down to Dubai to take a break from the rains and also spend Ramadan here. Last year in fact we spent Ramadan here at this very hotel and the year previous to that, we spent it  at Park Hyatt.

So you came here for a holiday during Ramadan? That’s nice!

Yes.

It’s a good way to promote Dubai among Europeans as you can discover many interesting aspects about Dubai during Ramadan and the Government promotes many aspects. True.

You are heading a team of 1800 in 4 properties ………………

We have 2,800 associates within five operating properties at the moment.

Ah! Five not four?

We opened the most recent one on March 1^st, officially, the Hyatt Regency Dubai Creek Heights. We will be opening the sixth one in mid June, the Hyatt Place Baniyas Square, near Deira Clock Tower.

So you have five, 5-star properties, this one Grand Hyatt, Park Hyatt, Hyatt Regency and Hyatt Regency Dubai Creek Heights and Hyatt Place which make 1,811 rooms?

Yes.

So it’s a big challenge to ensure high occupancy in top 5–star properties in the face of many mushrooming properties to maintain good occupancy. What’s your strategy?

We have select services. However given the markets we serve it’s an important differentiator to match your desired customer target. What we are doing now is to work closely with the Dubai Tourism mission to understand their macro strategies are understood at a hotel level and to support their aim as it is in our industry’s interest and to see our resources and allocation of our marketing strategies is in alignment with theirs. So that is one and two is to offer customer experience in our properties that is unique and by following it through with our passionate associates who follow up on Hyatt’s values and are customer-centric and focussed. If we don’t look after our guests in our hotels we can never get our occupancy up. So it is a two-pronged approach.

How much does the Hyatt International chain help you in your mission?

Considerable amount of effort is put on a global level so that the travelling customer knows where to travel to and what to expect. And it is fortunate to note that in Dubai around 80% of our brands are represented in this one city.

How has your hotel performed in 2014 and what were the drivers? And what was the expected average room rate for 2014 and how does it compare with 2015.

The market fundamentals in 2014 changed. My take on it is that the first two quarters were fairly strong for the industry particularly for the Grand Hyatt properties. But after that the drop in the Russian and CIS markets, which showed a downturn, obviously impacted it towards the end of the year. About 1800 rooms were introduced into the market in the last half of 2014 so it put a pressure on the pricing. But as the CIS market went for a negative downturn it affected things. But it’s a fortunate thing we didn’t put all our eggs into one market as we are a fairly large property. The pressure on pricing still continues today. And in the entire industry, in case one market drops we turn our focus to other markets. So we are still hoping to achieve good occupancy.    

Last year we saw 88% occupancy but this year we seem to be trailing a little behind. But my goal is to get a little above 88% as we are tapping into new market segments. I’m hoping and see rates normalize and the supply is absorbed and hoping the CIS recovers.

What is a good thing about being competitive is there is no room for complacency. It forces one to re-look and re-engineer one’s strategy and as to how you present your product to the market. So you cannot, not do well.

China has been one of Dubai’s top ten source markets for the past two years. And last year it went from No. 10 to No. 7. Last year for instance, there was a 25% increase in the Chinese market. How is it with your hotel?

We see the Chinese market as a huge potential, especially the couples who can travel and who have disposable income so we are no longer looking at the group market but we are looking at the FIT market and that is a growing sector increasing exponentially year on year. We are aligning our philosophy and approach with the DTCM with the information we got from them and the collaborative approach they have taken with the 5-star hotel sector. The opportunity is clearly there and we see it as only increasing are tracking our room night production from China and we see it as increasing so we need to allocate resources to provide offerings to the Chinese customer that will stimulate interest about the Hyatt properties such as translation of written material and the food to increase the bit of comfort he or she seeks.

They particularly like their own food, I think.  

Yes. And we are lucky to have two restaurants Pepper Crabs and Woks which are doing very, very well, as also with the Russian guests. So we are expecting big things from the Chinese market.

Do you take part in exhibitions and workshops in China?

No, not unless we are invited. If we are, we will definitely consider it.

Are you considering inviting delegations?

Yes. We have a sister property next door and we have to promote both properties and we do extensive banqueting so we can comfortably accommodate large conventions.

As per DTCM statistics in 2014 there was an increase of 5.6% guests despite the decrease in Russian guests. How has it been with your property?

I can tell you there is a decline of 53% in the Russian market in 2014 in room nights.

Was there an increase in general in other sectors?

Yes there was definitely an increase in other markets. But the highlight of 2014 was the decrease of Russian and CIS markets, more broadly. 

Do you think you would promote your 4 star hotels among the Russian markets as they can afford it and promoting it as 5-star luxury considering their situation at present?

Good question. The Hyatt Place model is the select service. Again you need to see the amenities available and the location and I am not sure if the Russian customers will find the location attractive to their needs and if it would be commensurate with their needs and wants will be truly satisfied outside a full service hotel. An example would be here where we have a full blown spa gym etc, we have the luxurious component. And they still want those things but they need to watch their dollars. Hotels today are so competitive that they can still acquire what they want at a different price point. They are still travelling to Dubai, but not in the volumes we have experienced before.

Last time we spoke to Roddy Gordom and he said that it is very important that Hyatt needs to develop this Hyatt Place brand in the market. Why?

It falls into DTCM’s approach and HH Sheikh Rashid’s directive, to ensure that Dubai is sustainable. So we need to provide customers with different budgetary expectations. So we need to develop different stars and we need to maintain the rates as the amenities will obviously vary.

What are the expected occupancy and room rates as well as Gross Operating Profit per available room for the first six months of 2015?

Without going into specifics, definitely when there is price sensitivity and pressure on that there will obviously there will always be pressure on the GOP. Once that’s the scenario as an operator it is up to us as to ensure that they deliver our product in an efficient manner and that goes back to how efficient we are, make sure we are not wasting resources and ensuring that we are spending our money wisely. And this goes back to not being complacent and adjusting your value chain and your market relative to your situation. I believe we will still do a very good job at maintaining our standards.  However, I cannot do much about the pricing as if I am not getting the yield, without negatively impacting the customer. And I cannot negatively impact the customer because we are saving money. But I am optimistic we will do well.

What is the average room rate in Grand Hyatt?

It is Dhs 1180. We need to maintain rate integrity and deliver what is expected. And in a hotel this scale, I have to cater for everyone. The question is the pricing pressure and as to how low do you go as otherwise we would suffer as an industry.

What is unique about Hyatt properties?

Grand Hyatt’s USP is the location close to airport not too close to hear the planes, easy to access the convention centres in Downtown Dubai, we have a very beautiful property that is truly scaled to impress, Arabic theme and the culture resonates, we have the largest recreational facilities by way of pools and gardens, whether it is the jogging track, four tennis courts, play area for kids, tremendous amenities such as a great spa, gym, 12 beverage outlets and we have high end suites for discerning customers, in short everything for everyone. We have a Grand Club Lounge upstairs where we get great views of the city and Creek views and we have an internal rainforest and we have ducks everywhere and we have poi fish in our internal rainforest garden and the kids love it. And from the family point of view we tick all the right boxes. We have separate driveway, entrance, we have very high ballrooms which are pillar-less, so there’s not much we don’t offer.

Park Hyatt is more intimate luxury, it’s highly personalized and unique, Hyatt Regency caters to the middle manager, difference in scale, you may not have the same array of restaurants, service point it stays the same. And two Hyatt Places we will be operating are located in the hustle and bustle of trade.

Where do most of your guests come from?

The biggest market in general is from GCC who like the brand. And they enjoy the opportunity to travel out of their countries experience which may not be available in their countries and we just focus on looking after providing our neighbours to ensure they have an experience that is important and will keep them coming back to us. March 2015 was very full. And the next component is the emerging market like the Chinese market and the European market in general.

Are you planning any major announcement during the upcoming ATM?

We will be having an impressive stall and what would be announced, which is already public knowledge, is about our two properties which will be coming up in the next two years. So there is no overarching announcement that will be made at this stage.