Jeddah’s hotel industry: exclusive interview with a top five start hotel in Jeddah

Interview with Hossam H. Al Gendy, General Manager of Holiday Inn — Jeddah Al-Salam

Tell us about the tourism sector in Saudi Arabia. What are the challenges, opportunities etc.?

The tourism industry in Saudi Arabia has improved a lot in the past few years. Previously, there were some restrictions on the visas to visit Saudi Arabia, mainly because it is a pilgrimage center for Muslims. Recently, SAGIA started issuing visas to help businessmen visit Saudi Arabia. Also, they have started offering extra facilities to travel agencies to allow them to bring in tourists from outside. Statistics show that during the past 10 years (from 2004 to 2014), tourism in Jeddah has increased by approximately 75%. We are expecting that we will have more volume of business coming in from the tourism sector, especially since the government is trying to overcome most of the challenges faced by the tourists coming to Saudi Arabia.

What is the situation in the hotel industry, especially with regard to the high-end and luxury hotels?

The hospitality industry has also been included in the vision of getting more and more tourists to Saudi Arabia. A lot of 5-star hotels are being opened all over Saudi Arabia, especially in the western regions like Mecca, Medina, and Jeddah. Jeddah will see the construction of many more hotels in the coming 4 to 5 years. The Saudi government is finalizing the Metro Jeddah project, which will link all routes and the whole of Jeddah through Metro. This will reduce the traffic a bit, just like what happened in Dubai once the Metro was introduced there. This will make it easy for people to travel within Jeddah.

Our hotel, Holiday Inn- Jeddah Al-Salam, is a part of the IHG, under the umbrella of the Al-Hokair Group. This hotel has been in the west of Jeddah for a long time, next to the old airport. The owners are very interested in renovating the hotel and upgrading all the facilities, especially the fire security system and smoke detectors for the safety of our guests. We have also been renovating the hotel for the past two years and we are looking into improving the quality of our service and rooms. The renovation works will be completed in 2 to 3 years. This hotel is considered to be the second largest hotel in Jeddah, with more than 355 rooms.

Will all the construction work impact the hospitality sector in the hotel? If you increase the number of rooms, the rates will go down in the whole of Saudi Arabia. What do you think will happen?

As far as the hospitality sector is concerned, Saudi Arabia is divided into 3 main parts. Each section has its own strength that impacts the average rates of the hotel rooms. Riyadh used to have the highest average rate in Saudi Arabia, due to the lack of hotels, especially 5-star hotels. They have already started building new hotels there, and the average rate has decreased a little. In 2010 and 2011, the average rate was between 900 and 1000 Saudi Riyals. Now it has gone down by a hundred Riyals in the past two to three years. The same is also happening in the Eastern province. There are a lot of hotels are opening there. This has impacted the inventory of rooms available there. At the same time, there is also a lot of demand for rooms there. This is why we are not finding a very huge difference in the average there, because the number of hotels has increased in proportion to the demand for rooms.

As you know, Jeddah is divided into north and south. 80% of the hotels are located in the North, because all the businesses are located there. The South area, with the Old City, still has a strong touristic value, especially for the Old City of Jeddah. A lot of people are interested in seeing the Old City of Jeddah.

Tell us about the Old City of Jeddah. What are the sightseeing opportunities? Is it a very historical place?

The Old City of Jeddah is the base of Jeddah. For a long time, Jeddah has been next to Mecca with the holy Al-Haram. A lot of people have been visiting it. You will get to see very good architecture and the old buildings with old design. This is why a lot of people are interested to visiting the old houses and witnessing the culture that was prevalent in Jeddah about a 100 years ago. So, it is very interesting for tourists to visit the history of this city.

There are a lot of things in Jeddah. The Saudi government has been organizing festivals for the Old City of Jeddah. A lot people are coming from all over to see this. Saudi Arabia has been focusing on this Old City for the past 3 to 4 years. Besides this, Jeddah is a key destination for conferences and meetings. After people finish visiting Mecca and Medina, people have the opportunity to visit the shopping malls ,as Jeddah is a little bit cheaper than Mecca and Medina for shopping. 

Talking about business tourism and MICE tourism, of course a lot of conferences are held here. It is the gateway to Saudi Arabia. It is the preferred business location. It has always been the business hub. Can you elaborate on the business tourism in Jeddah?
 
As I mentioned before, for a long time, Jeddah has been the center of trade for the holy cities of Mecca and Medina. Besides tourism, a lot of conferences have been held in Jeddah for the past 5 years. A lot of people are coming to Jeddah for business. This is why the South and North Jeddah hotels are full. The average occupancy in Jeddah has increased by over 70%. Furthermore, 40% to 50% of the 70% comes for business. The rest is accounted for in leisure tourism. This comprises people visiting the holy cities or people visiting the Old City of Jeddah and the shopping malls in Jeddah.

At the same time, Jeddah is limited in space. It is restrained by the sea on one side and mountains on the other side. So, there will always be a shortage of quality hotels.

For the past 5 years, there has been a lot of changes in Jeddah. There have been a lot of expansions especially towards the north. 10 years ago, everything was located at the center of Jeddah.  But after the influx of population and the heavy traffic, there has been an expansion trend towards the north. Most of the companies are moving to the north to make more space within Jeddah. Besides, as I mentioned before, Metro Jeddah will be introduced in 2 to 3 years. This will facilitate all the transportation between north, south, west and east of Jeddah. The traffic situation has already started to get better. And once Metro Jeddah starts to function, there will be a relief from all the hectic and the traffic and the over crowdedness.

How is your hotel special? How is it different?

Holiday Inn- Jeddah Al-Salam was built over 35 years ago. Initially, it was designed and built next to the old airport and the housing for Hajj pilgrims. At the time of building, it housed 319 rooms. Recently, we have increased it to 355 rooms. After this, it will be the second largest hotel in Jeddah. This hotel has a very strong infrastructure, as it was built long time ago. We are upgrading the hotel starting from 2015 and the coming years. Our major concern is the safety of our guests, so we have started with the restoration of the fire protection system and fire alarms. Our second step is to renovate the hotel. Almost 25% of the hotel has been renovated and work is in progress. In the next couple of years, the entire hotel will be renovated. Previously, 30% of our clientele was the airline crew, as it is situated on the Ring Road, which is directly next to the airport. 35% was reserved for the Al-Hamra people visiting the holy city. The past 2 years, we have changed our business ideas by concentrating more on business and corporate accounts to increase the number of corporate accounts dealing with our hotel. We are next to the industrial area. Our head office of the old company is in downtown. That is why we are investing in this hotel to introduce all the missing modern amenities in the hotel.

Can you mention some of the businesses that you are close to? Can you mention some of the key businesses located here?

We are located next to the industrial area of Jeddah, one of the most important business areas in the city. We are also next to the port. For all offshore companies with offices close to the port, our hotel is the only international brand hotel next to their business offices. Especially when they are receiving guests from outside, it will be easier for them to be accommodated in our hotel to avoid the traffic.

Why should people chose you over other hotels in Jeddah and in your location?

The location of our hotel is unique. This is the only international brand hotel in the South of Jeddah. The philosophy of picking hotels going by rates is quite outdated. Now, it is the quality of service that makes the guest pick any hotel. With the onset of online booking, and with the availability of guest reviews on booking.com, expedia.com and other online travel agencies, the guests now have all the information about the quality of the hotel. Key is that your location meets the needs of the guests and you are providing them with best service possible. The theory that states that the higher the rates, the better the quality is outdated. Our objective is to maintain high quality service, high quality of food and variety of food.

Tell us about the facilities offered here for different sort of customers. How are these facilities special or different?

In Holiday Inn – Al Salam, we provide one of the best spas in Jeddah. It includes massage, sauna, and steam bath for relaxing after a long working day. Besides, our room service menu is a 24-hour service. Our laundry is also a 24-hour service. People opting for open buffet also get 3 buffets for breakfast, lunch and dinner, available throughout. The coffee shop is also open until midnight.

How do you sell the hotel to your clients? It’s the second largest hotel. That’s quite a statement. It is an international brand.

Usually, when you have a big conference, you are looking for a large number of hotel rooms in one single hotel. One of the challenges in Saudi Arabia is that the number of hotels with a big inventory is very limited. If you are looking for hotels in Jeddah with over 300 rooms, you will only find 3 to 4 hotels. In the rest of the hotels, the average is only between 200 and 250 rooms. Some hotels, 270 to 280 rooms. But the majority of hotels average between 200 and 250. For example, during the first 2 months of the year, we received requests from several groups. Their condition was to find one hotel to accommodate 200 guests. Usually, in a hotel with 250 rooms, you can never give up 80% of the rooms to a one-shot group for a short time and then lose out on the business that comes to you on a day-to-day basis.

Tell us about the history of hotel. It is one of the oldest international hotels in Jeddah.

The hotel was built about 30 years back. The philosophy behind this hotel has always been to have large rooms. The minimum area of each room here is 28 square meters. This is very rare to find this kind of space in the new buildings, because the rooms in the new 4-star hotels range between 24 to 26 square meters. In the 3-star hotels or the limited-service hotels, you are talking about 22 to 24 square meters. So, the minimum space we offer here is 28 square meters and the guests spend a lot of time in their rooms. The old hotels are built with a lot of consideration given to space. Previously, it was not very crowded, so people were not very reducing the space to accommodate more rooms.

This is a hotel that has been located here for a long time and has passed through the hands of many managements. It used to be called by different names, but right now they have zeroed in on Al-Salam as its trademark. It is not only Holiday Inn. It is Holiday Inn Al-Salam, because in the past 30 years, whenever the name of the brand changed, Al-Salam continued to be the keyword for the hotel.

You have been hotel industry for a very long time. What is your personal philosophy? What would you like to achieve now that you are the general manager of this property? What is your personal leadership role here? What would you like to accomplish?

It is a very hard question to answer. When you work in the hospitality industry, the sky is the limit for you. Every day, and year after year, you gain more experience, you face more and more challenges. In the hospitality industry, the guest review is very important. It affects the hotel, the staff, the reputation of the owners, and that of the management company. In this industry, you cannot just lie on your laurels. You are always on your toes 24/7. It is not easy to have a vacation. Even on a short vacation, your telephone is always on. You have to receive calls. So, it is very difficult to set a limit for your career in this industry is a very difficult question to answer. If you believe in this industry, you are not working because you have to. This is something I tell my colleagues in the hotel. “The day that you feel that you are just coming to ‘work’, just leave your job. You have to love what you are doing.” Because hospitality means you need to know how to host people, how to welcome people, how to deliver the services and how to deliver the services to the guests and to meet their satisfaction.

It is not an easy task. We are human. It is very hard to satisfy all the people, but you have to do your maximum to meet this challenge.

Could you give us some factual figures about what you want to achieve with this property? The targets you want to reach?

My first goal is to upgrade and achieve maximum guest satisfaction with the current condition. During the past 16 months, according to the IHG survey, our guest satisfaction has increased from 53% to 75%, with only 20% of the rooms renovated in the hotel. Besides the financial requirements of the owners and the management company, I am looking to go on renovating the hotel as much as we can within this year and to work on improving guest satisfaction for the hotel. Of course money is important, but this is a must. But for me, the most important thing is to keep renovating the hotel, upgrading the quality of the hotel, upgrading the quality of people visiting the hotel and to be known as the best corporate hotel in the South and Jeddah.

We, as a Holiday Inn brand, we are also available in the north and south of Jeddah.  This hotel has been in South Jeddah for a long time and we are opening a hotel in North Jeddah next to the airport. It is called Holiday Inn Gateway. The Holiday Inn brand is serving older guests in both areas, north and south. If they want a Holiday Inn in the North, we are available next to the airport and in the South, we have Holiday Inn – Jeddah Al-Salam to meet their needs. 

Saudization is an important topic.

You might find my opinion a little bit different in this case. I do understand what the Saudi government is trying to do. They are right to increase Saudization in all fields. Despite all the challenges we are facing to meet this requirement, with the push of the Saudi government and the private sector, one day we will achieve 50% of Saudization in the hospitality industry. The day will come when the Saudis have to run their own business. We will not always depend on expats, be it Europeans, or Arabs or Americans. But the day will come, when the Saudis will run their hospitality industry by themselves. It is a little difficult to convince the people working in the hospitality industry, but in the past 3 to 4 years, we have successfully increased the Saudization on our properties. As far as the Saudization percentage in the hospitality industry is concerned, we are now are matching the requirements of the Saudi government. Within the coming one to two months, our percentage here will be increased by 5%. Our owners, the Al-Hokair Group believe in Saudization. We are always discussing about how to increase this percentage in our hotel.