Upcoming Hospitality Investments in Jordan by Zara Investment Holding

Interview with Lina Annab, General Manager of Zara Investment Holding

What is your overview of the tourism investments in Jordan today? Perhaps you can take us through the past five years since we met last time and tell us about the overall direction of this particular type of investments.

Welcome back to Jordan. A lot has happened since we met five years ago in 2010. A lot has happened not only in Jordan but also all over the world in the tourism and hospitality industry. In Jordan, between 2010 and today, we were delighted to see that the confidence in the tourism product remained robust and this was evidenced with the number of new hotels and other tourism-related developments that have come up in Amman, the Dead Sea and Aqaba. Unfortunately the unrest triggered by the revolutions that rocked the region in the past few years has impacted Jordan economically especially in terms of foreign direct investments. Funnily enough, and I think in big part thanks to social media, it seems that over the past five years there was also an increasing awareness locally and worldwide of the uniqueness and the diversity of the Jordanian tourism product. This, in my opinion, has not only highlighted areas of untapped demand, but also has planted the seeds for new growth opportunities in the tourism sector once we see calm and stability return to the region. The diversity of the product highlights what could be dormant demand and promising investment opportunities for start-ups of all sizes. Outside of Jordan, a lot of disruptions have taken place in the global tourism and hospitality sector as well. For example when we last met in 2010, Airbnb was just two years old, today it is valued at over U$25 billion with estimated 1.2 million rooms sold per month. Priceline, owner of booking.com, was then worth 10 billion US dollars and today it is valued 61 billion US dollars and it is completely reshaping and redefining the hospitality business. In the past five years Facebook online community became bigger than then the largest country on earth. In other words the past five years have witnessed an enormous amount of disruptions and revolutions on all levels, social, economic and political all over the world. For us in the hospitality sector, our business model as we knew it for decades has definitely changed, and we must be ready to adapt to that. New investors who come to Jordan looking at the hospitality sector will need to take that into consideration.

You touched upon the challenges on a regional level but what about the challenges on a local level inside Jordan?

In Jordan we are neither isolated nor insulated from what happens in the region. Our economy is dependant on vital imports and exports that have been both negatively impacted by the recent regional turmoil. The instability in neighbouring countries can sometimes negatively impact the perception of safety and security, which would suppress demand. Ironically, the upheaval has also redirected and increased demand to us due to the temporary closure of certain markets. This is not the business we covet nor seek even though it is a natural externality of what happens when markets close and we become an option and a natural outlet for the markets that are unavailable because of the unrest. In general, I believe that the prosperity and sustainability of tourism in Jordan comes from stability in the entire region. Given how intertwined our region is in terms of its history and rich culture and heritage, a flourishing tourism sector in all of the Arab World is what we all strive for.

Given how intertwined our region is in terms of its history and rich culture and heritage, a flourishing tourism sector in all of the Arab World is what we all strive for.

Specifically regarding the holding, what has been accomplished in the past five years?

Over the past five years we had the opening of one of Jordan’s most beautiful resorts the Movenpick Resort and Spa Tala Bay in Aqaba. This was a U$80 million project. This resort proved to be a huge success due to its various room configurations as well as its wonderful food and beverage outlets. In general, we continuously work to improve and innovate our product offerings. This means that we are always refurbishing our properties through quite extensive capital investment projects. At the moment we are working on two multimillion dollar refurbishment and renovation projects. In addition and in order to achieve the best yields for our investments, we restructured our capital and debt. We have also embarked on exercises to reengineer our business model in order to be more agile and responsive to the developments taking pace in our industry. Another very important and exciting accomplishment that we are proud of over the past five years is the partnership forged between Zara Investment Holding and the Vocational Training Corporation, which resulted in Zara developing and opening in May 2013 the 20-room 3-star Saltus Hotel in AsSalt city. This is a non-profit entity that is aimed at providing hands-on training environment for the hospitality industry. Saltus Hotel is also the first classified hotel to be established in the city of AsSalt. To date Saltus Hotel has trained over 400 trainees of which almost 20% are females.

You mentioned the Movenpick in Tala Bay, what other new additions were there?

We are now working on developing an eco-resort in the north of Jordan. This is going to be a departure from our usual luxury 5-star hotels that we normally engage in. Architecturally speaking, it is also going to be a first of its kind in Jordan. Zara has always been focused on developing 5-star properties in Jordan. However we now realise that there is a viable opportunity for lower tier hotels, 3 to 4 star hotels, so this eco-resort is going to be within that range. We are all very excited about this project.

When is it forecasted to be completed?

Once we are finished with the architectural concept and design, we expect the execution period to be approximately 2 years. 

Is there any other project you would like to discuss further?

In addition to our existing properties, we also have real estate (land) slated for development at any time. They are all prime real estate land and they vary in size from few dunums to large plots of hundreds of dunums (dunum = thousand sq). Zara owns land in Aqaba, Petra, and the Dead Sea, which are all prime hospitality locations. We welcome and seek investors who are interested in jointly developing touristic projects.

Zara is also very extensively involved with the arts and events surrounding the arts. How do you support local artists?

From the early beginnings of Zara, supporting the arts has been a direction for us. Zara was one of the first companies to focus on and understand the importance of corporate art. Our hotels probably hold the most unique and extensive art collection in the hotel sector in Jordan. We started introducing art by emerging and promising new artists who needed support and promotion. Some of the artists that we have worked with have become famous in their own right and they are today recognized internationally. Supporting the arts has been rewarding for both the artists and Zara. Not only have these artists enriched our working environment and made our properties beautiful with their artworks, their works have also proven to be viable investments with returns to both of us. Some of the art we curated have appreciated in multiples of their original value.

Is there anything that you would like to highlight about the holding?

I cannot highlight enough the fact that we are witnessing and experiencing a revolution in the global hospitality sector. The industry has been disrupted with innovations that have impacted the entire industry worldwide. We see all these changes as a great opportunity to adopt and evolve. I always say that Jordan has the advantage of a time lag between what happens in the developed world and what happens in the less developed ones. In some way we could say that we can read the future in our country through looking at what happens in other more mature markets. This lag is becoming shorter and shorter because of technology. However it is still there. In my opinion this is an opportunity that we need to take better advantage of. It is also something that we are fully aware and mindful of. Our business model has changed and so have our customers; we are now dealing with a completely different new group of customers, and they are the one dictating and driving the business and the demand. At Zara and as a market leader, we fully realize that we need to go beyond our leadership position and  we need to look around us to see what needs to be done in order to keep up with all the innovations taking place around us.

To sum up, what is your vision for Zara Investment Holding?

I would like to see Zara continue to be the pioneer that it is today in the hospitality sector in Jordan. In order to do so we need to be agile enough to respond to the changes taking place by being innovative and creative in our future outlook and plans. Being a market leader is a very nice thing, but it could also be a very dangerous thing if one becomes complacent and arrogant about this leadership position. In order to offer the customer whatever he or she wants, I would like to always see Zara as a company that continuously keeps up with the times and the technologies that are changing our industry. At the end of the day, it is our customers who determine our success from failure. Zara is the service provider of choice in Jordan; I would like us to become more so because we are offering what the customers want by being responsive to and catering to their needs.

What would be your final message about Jordan?

Jordan is a country stunning with its beauty and diversity, majestic with its history and heritage, beautiful with its people and their genuine warm welcome and hospitality, and comforting with how safe and secure it is. Jordan is a country full of beautiful surprises to all those who come expecting to experience a new country, only to find out that their imaginations have failed them in how awesome Jordan really is. In that Jordan is truly unique. I believe it is the combination of various factors that make Jordan a place like no other on earth. The size of the country offers the visitor the opportunity to experience a diversity of scenery and natural habitats unmatched anywhere else in the world. The touristic product is so diverse it offers within few hours incredible sites for all types of tourism, be it religious, cultural and heritage, archaeological, adventure, medical, business, or leisure tourism. The tourism infrastructure is also quite advanced from road networks to hotels, restaurants, old neighbourhoods and modern ones, modern banking and health facilities, and yes that most coveted thing called internet access. Today Jordan offers the newest generation of wireless internet access technologies. Our cuisine is also rich with delicacies and delicious offerings that guarantee the visitor a fabulous gastronomic experience. To all those who think of Petra and the Dead Sea when they think of Jordan, I say this is only the tip of the iceberg. If you travel Jordan from north to south you discover that what is in store is probably much bigger than what we ever thought existed in Jordan! For example few are aware that Jordan is home to the best and most beautiful hiking trails in the world; one of which was voted as one of the top trekking trails by National Geographic.  Not only that, Jordan today offers a 650-kilometer trail from the north to the south of Jordan that is fully mapped, GPSed, assessed for difficulty called “The Jordan Trail”. This trail rivals the best in the world, such as the Camino de Santiago to name one. Again, our biggest strength is the diversity of our product. Another strength we have is the people who are genuinely welcoming. We as Jordanians genuinely love to receive people in our homes and in our country. I loved it when you told me that you have been here for a few weeks and that you already like it very much. That really makes me very happy because when you have something beautiful you like to share it with people. We have a beautiful country and we love to share it with the world.

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