Jumeirah keen to expand brand in Asia

3 Jul 2015

The man driving development of Jumeirah hotels and properties in the region is upbeat about a rate of growth for the brand unparalleled elsewhere.

James Mabey, Jumeirah Group’s senior vice president of development, Asia-Pacific, said the group’s strategy for the region lay in successfully meshing the well-established Jumeirah brand along with the newer Venu offering, greater attention to serviced apartments and JM’s branded residences, called Jumeirah Living.  

“Predominantly in the past we built great resorts and hotels in the Middle East, and specifically in Dubai, but more recently over the past 10 years the decision was made to look at serving those customers, one, in those feeder markets where they are actually coming from so that domestically they have access to these experiences, and then two, from the outbound perspective all these guests who come and stay with us in Dubai and then are travelling on to other destinations – all these customers should be able to have the same level of experience and service.”

Mabey, who met with Business Traveller Asia-Pacific on a stopover in Hong Kong, said a large part of Jumeirah's growth strategy surrounded China, where the group plans eight new hotels at Sanya, Guangzhou (two properties), Hangzhou, Nanjing, Haikou, Wuhan and Qiandaohu.

“Part of our growth strategy is focusing on key cities within China,” he said. “First-tier cities are important and we already have one hotel in Shanghai and hotels and serviced apartments [under construction] in Guangzhou. Beijing would be a lovely market that we’d like to be in, but it is obviously a market that is a lot more mature and requires a bit more fortune in finding the right partner in the right location.

“In recent years a lot of competitor hotels have opened up in [Beijing] locations that were sub-prime, but we would rather wait to find a location that we’re more happy with rather than rush into something that is less competitive and less noteworthy.

“The other cities that we’re looking at, the second-tier cities, have a large number of tourists heading to the Middle East so in terms of outbound connectivity they are also critical to our development, but then these are cities with very high growth potential in the next five to 10 years. The smallest of these second-tier cities in five to 10 years will be two or three time the size of Chicago – so there’s a lot of potential growth.”

Mabey said the prevalence of high net worth individuals with spending power made second-tier expansion in China attractive. “The locations of the [Jumeirah] hotels under development in Wuhan and Nanjing are at the epicentre of the city, where if you look at the retail that’s there and the residential prices, they are extremely high,” he said.

“These cities have a very large number of HNWIs and sophisticated consumers. Both Emirates and Etihad have regular direct flights between Dubai or Abu Dhabi and China, so there’s a lot of airlift back and forth – and not just into Shanghai and Beijing, but also Guangzhou and of course flights from Hong Kong.

“China is a major trading partner and has a lot of economic influence into the Middle East right now. There were 344,000 visitors from China into Dubai last year, and in Dubai itself 10 per cent of the population now are Chinese.

“From a Jumeirah standpoint 6 per cent of our guest business comes form China and it’s one of the fastest growing segments, so we’ll continue to bank on the Chinese consumer.”

Jumeirah currently has just three hotels in Asia: Jumeirah Himalayas Hotel in Shanghai; Jumeirah Dhevanafushi in the Maldives; and Jumeirah Vittaveli in the Maldives. Updating on the region, Mabey said Jumeirah Bali is “well underway with mock-up villas completed, groundworks finished and well on the way to being completed in the next 18 to 24 months”. The resort, in Jimbaran district, will have 80 suites and 24 private villas. One other project in India, in Mumbai, is ongoing. Jumeirah Mumbai will comprise 470 rooms suites and serviced apartments, and is expected to open in 2017.

He said the brand was also busy seeking opportunities in multiple locations. “We have things progressing well in Kuala Lumpur and in Bangkok right now, as well as in Jakarta for Southeast Asia. [In the longer term] we’re considering all of the key gateway cities including the resort centre locations. So all the capital cities that have good airlift into Dubai and the Middle East, especially countries such as Malaysia and Indonesia, which have some very strong cultural connections.

“[Also] the resort destinations – places such as Phuket in Thailand, and Samui, very interesting, as well as some jungle retreat locations like you think of in Bali, at Ubud, or Chiang Mai in Thailand, even Luang Prabang in Laos. Places like Bhutan are of interest. Langkawi in Malaysia is another market. We’ve looked at the market opportunities in all these cities.”

Mabey said getting the go ahead on the right deal takes time. “We’ve looked at 10 deals in Phuket in the last year, in Langkawi 10 or 12 deals in the last year. We’re currently looking very actively at Luan Prabang in Laos, at a potential property.

“But it takes us a long time. We’ll go through 100 or 150 deals before we find one that we feel is a good fit.”

A development that Mabey believes is a hand-in-glove fit for Asia is the Venu Brand, launched last year as a practical and contemporary alternative to Jumeirah and targeting a more adventurous millennial mindset.

“In any market where you find that type of explorer, we would be interested in a Venu. And because it’s much more practical, it’s not a luxury product, it means it’s a much more economically viable option in some of those smaller cities where the rates that we’d need to operate a Jumeirah effectively would not be otherwise found. So there are many possible markets in Asia-Pacific for Venu.”

Serviced apartments are also key to the regional strategy, targeting the business traveller with better luxury options. “Often businesspeople or families are staying for longer than seven days and they need a slightly different product. There are a lot of more basic serviced apartments out there, but there is a demand within our demographic for a luxury serviced apartment, which of course doesn’t have the same facility structure as a hotel but is tailored to someone who needs to live in a specific environment for an extended period of time.

“This is especially critical in a lot of areas in Southeast Asia and East Asia, where there’s more of a need for [serving] business travellers and a lot of emerging markets where they don’t have a lot of options. They are either staying in a five-star hotel or they are staying in a very basic four-star business serviced apartment which is not really meeting their needs.

“So we have one under construction now in Guangzhou and we have multiple others in advanced stages in China and in Southeast Asia.”

Mabey said Jumeirah Living, the group’s branded residences, is on the drawing board for multiple projects at “advanced stages of discussion” in China  and Southeast Asia. “Hopefully in the coming weeks at least three or four more deals in Asia-Pacific will become formalised and be announced,” he said.

John Church 

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