HMH, a pioneer in creating alcohol-free chain of hotels, boasts 50% share of the MENA region’s halal-friendly segment. Laurent A Voivenel, CEO, spells out the company’s unique offering and plans for India. INTERVIEWED BY SHAFQUAT ALI
Hospitality Management Holdings (HMH) has come a long way since its formation 15 years ago and now boasts 50% share of the halal-friendly segment in Middle East & North Africa (MENA) region. Tell us about the thought process and the vision behind this hotel concept.
HMH was founded in Dubai in 2003 by His Excellency Sheikh Faisal Bin Sultan Al Qassimi and Michel Pierre Jean Noblet. They had the vision to create the Middle East’s first dry hotel chain offering halal-friendly, alcohol-free ‘safe’ environment.
We are a fully-integrated hotel management company providing hotel owners and developers a broad spectrum of comprehensive management solutions with five distinct, yet complementary, hotel brands catering to varied market segments from budget to luxury. These include The Ajman Palace Hotel (luxury five-star), Coral Hotels & Resorts (four-five star that represents 75% of our portfolio), Corp Hotels (three-four star), EWA Hotel Apartments (three-four star), and ECOS Hotels (budget brand). With 20 hotels, we are present today in 15 cities across seven countries in the MENA region.
What, according you, is the biggest contributing factor behind HMH’s incredible growth?
I think there is not one factor but many factors behind our success. Product diversification, technology and innovation, sound fundamental values — honesty, integrity and financial transparency — commitment to excellence with quality service and expansion in key destinations are the cornerstones behind HMH’s amazing growth. At HMH we have a single mission: ‘We Say, We Do’.
What’s the potential of the halal tourism globally and how is your group tapping into it?
Halal tourism market holds enormous potential and halal-friendly hotels is a fast growing sector that will continue to claim bigger market share globally given the business opportunity and demand. Halal tourism is recognised as a travel segment equalling roughly 10% of the entire travel economy and, last year, was calculated to be worth $145 billion representing over 108 million Muslim travellers.
The segment is forecast to continue to grow to an amazing 150 million visitors by 2020. By 2030, Muslims will make up more than a quarter of the global population rising from 1.6 billion in 2010 to 2.2 billion and 30% of this population will seek halal options.
What is important to understand is that at HMH, being an Emirati company, halal-friendly is part of our culture and DNA, and not simply a business decision. No matter where we operate, all our hotels are alcohol-free and halal-friendly, as it is part of our brand philosophy unlike other companies who do so only as a business and, therefore, only want a share of the pie by keeping stand-alone brands or hotels as dry. This places us in a very unique position as, over the years, we have gathered an amazing experience both in terms of operations and market intelligence in the dry segment.
How do you differentiate yourself in the Middle East market?
Few regional hotel management companies can claim to have the local know-how, technological expertise and global network at par with HMH. We offer far better value and returns to hotel owners and investors with the right blend of expertise, strategy, technology and market reach.
What do your hotels and resorts offer that make them halal-friendly?
At HMH, we have taken a ‘halal-friendly’ approach and not ‘halal-only’ approach. We are eager to grow our footprint in this significant sector and are keen to have a bigger share of market as well as raise awareness among hotel developers/owners about the opportunity and our strengths in the segment.
At the moment, there is a lot of ambiguity in what represents a halal-friendly hotel and what does not. So, there needs to be some sort of standardisation in terms of what constitutes or qualifies as a halal…
According to us, halal does not mean boring. It means providing the right atmosphere and essentials that halal travellers seek — food being a key element. It is all about clean and safe environment. Dry hotels are equally popular with Western or non-Muslim travellers. Over 60% of our clientele are non-Muslims. For those seeking halal accommodation, we are alcohol and pork free; serve halal food; provide on-site prayer facilities; ensure Qibla signage, Holy Quran and prayer mats in rooms; respect prayer timings by lowering or turning off music; wherever possible offer separate recreation facilities for women (such as pool, gym, spa, etc.) and ensure family-friendly TV channels, etc.
What is the scope to expand this offering into India?
We are extremely eager to enter India and are looking for the right opportunity and local partners. The potential of halal market is yet to be realised/exploited in the country. Greater awareness needs to be generated among hotel investors and developers about this lucrative sector and the potential it holds.
India has more Muslims than any other country in the world, except Pakistan and Indonesia. By the end of the 21st century, India’s Muslim population will reach 320 to 340 million people (or 18-19% of India’s total projected population). Muslim travellers are looking for the ‘halal’ label on hotels, restaurants and even airlines when they travel. 50% per cent of Muslim travellers would use halal-friendly facilities if they existed and 30% would seek strict Shariah-compliant services.
Do you think mid-market hotels are the way to go? If so, what are you doing to tap this segment?
The greatest potential in India lies in the growth of branded mid-market and budget products aimed primarily at the domestic traveller. It is the domestic travellers who are the key drivers of sustainable hospitality growth in India. We believe penetration of the domestic travel market will yield the greatest long-term returns for our brands. Indian domestic traveller numbers far exceed international arrivals.
The country has over 563 million domestic travellers compared to inbound arrivals of five million. The domestic travellers are the most important factor in the expansion of hospitality market and majority of these seek budget hotels.
We are, therefore, keen to target this with ECOS Hotels that is a ‘no frills’ bed-and-breakfast brand tying together a unique economical and ecological concept. It is a smart choice for investors offering strong investment opportunity because of lower construction and operating costs and quick and high return on investment.
Do you see a link between halal and mid-market?
The biggest growth in halal tourism is being seen in the mid-market segment, hence, it is a key focus for us. Given the experience we have, at HMH we are uniquely positioned to capitalise on both halal-friendly and mid-market hotels having been successful in penetrating these segments early. And our strategy is to expand aggressively in this segment with a target of boosting our existing portfolio of hotels by 30% over the next five years.
How are you equipped in terms of technology to meet the demands of new-age travellers?
Innovation, sustainability and mobility are extremely important for us. We invested 90% of our CAPEX last year in an all-round IT upgrade that helped us to close the gaps we saw, giving us an enormous edge over our competitors and creating value for our owners, associates and guests.
Right from rolling out a new e-commerce-friendly multi-lingual website for better online conversion to embedding the right hardware and software at various levels of operations in order to increase efficiency and compliance of standards, we have put in place some major initiatives.
What’s lined up in terms of development?
Development has been a key focus for us and we have got some very exciting projects under consideration that are at various stages of negotiation. However, we wish to grow the path according to our strategic plan that is sustainable in a physical sense. It is not only about business opportunities out there, rather our strategy is to drive ‘Value over Volume’.
