Gerald Lawless, President & Group CEO of Jumeirah Group, explains why it’s a lucrative time to be working in the global luxury hospitality industry.
It’s somewhat startling to realise that Jumeirah Group was launched as recently as 1997. In just under one decade the group has grown to operate 22 hotels in 10 countries, with no less than 14 hotels and resorts in the development pipeline, including properties in St. Petersburg, Mumbai, Guangzhou and Bali.
The brand attracted global headlines in 1999 with the launch of the Burj Al Arab, frequently referred to as the world’s only 7-star hotel, situated on an artificial island 280m offshore from Jumeirah beach. The launch heralded a new understanding of luxury in hospitality, rarely seen in other parts of the world.
From the underwater dining room accessed by a simulated submarine voyage to the top-of-the-range suite spanning 780sqm, billed at nearly $20,000 per night. Indeed, Jumeirah’s motto is to Stay Different, and the relatively young group continues to forge its own unique path, with developments in Oman, Kuwait, Thailand and Jordan.
At the helm of the dynamic Dubai-based business is Gerald Lawless, who has driven the establishment of Jumeirah as a significant global luxury hotel player. He joined the company in 1997 after a 23-year career with Forte Hotels, which culminated in him setting up and growing Forte’s operations in the Middle East. We sat down with Gerald to learn more about Jumeirah’s journey into one of luxury’s most competitive markets.
“ We have seen a strong recovery in Dubai. Visitor numbers continue to grow ”
How has 2014 been for business? What are some of the highlights for Jumeirah?
I think business has been very good perhaps because so much of our business is Dubai based. It has been particularly strong to see the recovery in Dubai and how visitor numbers continue to grow into our main market here. From that perspective, we’ve been very pleased.
When we look at the highlights, it is the fact that we now have a number of more matured operations in different locations such as in Rome and Istanbul, in Frankfurt and in Shanghai. It’s really been very good for us.
I would say one of the really interesting performers as well for us has been the Maldives, which has done very well with both properties, Vittaveli and Dhevanafushi. I guess that over the last 12 months, the big, big highlight certainly would have been the fact that Dubai has won the bid to become the host city for the World Expo 2020, which is very good for the future of our company.
“ I think that in the luxury segment, being different is really important. ”
How does Jumeirah’s Middle Eastern heritage help differentiate its value proposition in a saturated luxury hotel marketplace?
Our line is “Jumeirah Stay Different”. I think that in the luxury segment, being different is really important. Each hotel must be a compelling new discovery for every guest. Each hotel has to have its own unique identity. This works very well for us. We have the golden thread of the Jumeirah brand going through all of our hotels, but it’s a different experience always at a luxury level within Jumeirah.
We place a lot of importance on the foundations of the group. Just as Mandarin Oriental and Shangri-La are of China, we are very much of Dubai. We trade a lot on the whole principal of Arabic hospitality.
This is something that is ingrained in the Arab psyche, how travellers, how guests are looked after and guests are welcomed, it does play very positively to the guest experience and what they want to get from visiting an Arab country. And we are very much focused on taking these cues and creating experiences that are authentic and real.
A great example is our Madinat Jumeirah resort, spread over 60 acres with three hotel components. When we gave the brief to the architects back in 2001, we asked them to take their inspiration from the old centre of Dubai, which is the creek side, which is like a seawater river that flows up through the middle of Dubai.
There you still have the old Arab dhows, which sail throughout the Gulf and over to East Africa and India, moored alongside the street. All the bazaars and souks and water taxis are still used very much like they’ve been used for generations. We told them to take their inspiration from this part of Dubai so we didn’t end up with some kind of cliché Arabic Disney World.
Madinat Jumeirah, Dubai
Tell us some more about your customer base. Have economic headwinds in developing markets impacted your traffic?
Because we’re at the top end of the market, I think we’ve been in many cases protected from some of the difficulties that have been going on, particularly with regards to the collapse of the Rouble and the Russian market generally. We have not experienced that in Jumeirah. Our Russian market has performed very well.
I also feel that Dubai and the Middle East have some sort of mysticism about them. People like to see what we have to offer. Abu Dhabi is also is very strong now. Because of the incredible airlift we’ve had through Emirates Airlines into Dubai, we really are in the fortunate position that many new destinations are coming both outbound from Dubai and inbound to Dubai. That helps us as a growing group.
Also we now have hotels Shanghai and the Maldives and with these kind of locations comes much more traffic. Furthermore there’s such a high awareness of Dubai for incoming travel thanks to the airlift that we’ve been protected quite a lot from any potential slowing down in the market.
I don’t yet feel that the luxury market is saturated. I think a lot more people are getting more and more wealthy, especially when you look at places like China.
We see the Chinese visitors continuing to grow. At the same time, their required level of luxury from a hotel is changing as well. They’re becoming much more individual travellers as opposed to group travellers, which again is really good for the luxury segment.
“ I don’t yet feel that the luxury market is saturated ”
What about your home market of the Middle East? And all the wealth we find in this part of the world?
Dubai has become a universal aviation hub, which gives us tremendous opportunity, but it’s strange in many ways that our core market really hasn’t changed. We will say in the top 5, not necessarily in this order, you will have the GCC, which is the Gulf Cooperation Council … They’re the countries around the Arabian Gulf. We have the United Kingdom, which has just traditionally trading entity with Dubai for so long.
We have Russia, which is really important. The Russian market is important for two reasons: 1 for volume due to the lot of Russians who come here, but also the Russian market spend per head that we experience is very high. That helps us a lot. The fifth market would be very much Central European, Germany in particular.
Outside that, two fast growing markets that we have, into Dubai this is, would be China for the reasons we all know and, interestingly enough, the United States. These are country of residence statistics of the people who come and stay with us. They might not necessarily be American national, but they are people living in the United States. This is very good for us.
When you look at Jumeirah hotels in Frankfurt, in Rome, in London, in Shanghai, you will find a higher concentration of our high-end Middle East visitors staying in those hotels, particularly in the summertime and particularly in London and in Rome.
“ Our two fastest growing markets into Dubai are China and the U.S. ”
How are you working to build brand awareness and attract travellers from countries where you don’t yet have hotels?
In the Americas we don’t yet have a hotel, but we do have a number of sales offices, which promote the brand with strength, particularly in Europe. In fact, US outbound business to Jumeirah in the year to date (December 2014) is up 36%, which is amazing.
That business is going very much into London and Dubai. Rome would be the next significant recipient of Jumeirah business from the United States. Indeed the American airlines are also flying nonstop to Dubai now and to a lesser extent, but also importantly, Abu Dhabi. They’re both looked upon as really not just hubs, but destinations as well in themselves, particularly Dubai.
And then in China we have our one hotel in Shanghai. We have a number of GSOs in China from Hong Kong to Shanghai. We have our own sales office in Shanghai and we have worked hard alongside the Dubai tourism industry to promote Dubai in China. Again, with our friends in Emirates and their China and their airlift is really helping us. The awareness of Dubai in China is very high.
There was a lot of effort made from the Dubai government, from the Dubai tourism industry to really promote the destination in China. It has paid huge dividends. There’s a large number of Chinese nationals actually living in Dubai and working here. The awareness is growing all the time and the desirability of Chinese people to travel as they become wealthier … They really do want to travel.
They’re so, so brand conscious. They really do want to stay at the best, which we’re very happy about that. As I said earlier, they’re becoming less group and more individual in terms of their travel at our end of the market, which is very good for us as well. Obviously that’s the way we like to accommodate them.
Jumeirah Himalayas Hotel, Shanghai
And in terms of marketing, what are your current aims?
For the moment we feel that the brand awareness is of prime importance to us. Therefore we are looking to continue to evolve and develop our brand awareness. Brand awareness is so important in the luxury segment. You have to be front of mind at the right level with the right people.
In addition to that, we also decided that we would launch a new branding, a contemporary lifestyle brand called Venu. We’re hoping to announce a few management contracts here in Dubai to start within the next several weeks. This is a major opportunity for us, having more than just one brand, but still in the upper upscale market.
We market very, very powerfully, I believe, through our own online services, particularly our own website and indeed our call centre. We’re very pleased that from our own systems, we’re now up to nearly 27% in terms of our production. For a small company, to have this level of awareness online is quite something. We’re well ahead of our target in relation to our own systems production. We continue to reinvest in our brand awareness.
“ Brand awareness is so important in the luxury segment. You have to be front of mind. ”
We have seen a lot of international brands developing in China, less so in India, South America and Russia. Why are these particularly challenging markets for luxury hoteliers?
We’re certainly focusing where we can get a lot of traction and where things will happen, so we are very focused on development within the Middle East and within Asia and Africa. China, yes, we have Asian hotels coming up on operation already into Bali. We’re still very keen to get more penetration into South East Asia.
These are areas where we are very knowledgeable. We’re comfortable in operating in these areas. In terms of other locations, I would still say even in the Middle East, we’re not big enough in Saudi Arabia. We need to get more presence there. We’re working on that at the moment. Also Russia, you’re absolutely right.
Russia is vital for us. We have one project coming up in Saint Petersburg. We are very active in discussions, but nothing to report at this stage. We’re very active as well within Moscow. We would like, as soon as possible, to be operational in Saint Petersburg, which hopefully will come by the end of 2016. In the meantime, we’ll continue to really push hard for more presence in Russia.
We have quite a lot of opportunities in Europe, but we are not necessarily going hunting, as they say. We receive quite a number of inquiries, so we’re following those up at the moment, there is some good potential. With regards to South America, I think yes, but not for at least another 2 to 3 years because we’ve just got so much going on where we are at the moment.
“ I would still say even in the Middle East, we’re not big enough in Saudi Arabia ”
How does Jumeirah specifically decide when an ‘emerging’ market is ready for a luxury hotel?
Just from our own knowledge and from how we look at where we’re going within a region. Particularly within the Asian and South East Asian region, we look at opportunities. We have 2 hotels coming up in India, one in Mumbai and one in Goa. That’s important for us.
Myanmar is also important. I think that there’s great benefit to be had, even as a luxury group to consider going into a destination that you know instinctively will definitely attract a high-end traveller.
I think Myanmar is absolutely one of these destinations. I think you have to be careful where you go. Yangon would certainly be our first preference to start there. We also looked at Vietnam and Cambodia. We know that the market is there. It’s there for a luxury hotel. People are interested in Jumeirah coming there.
In terms of other interesting destinations, I went to have a look in Tehran in Iran in early May. We are interested there as well. I was in conversation with a manager in one of the hotels who claimed that their branch in Isfahan is absolutely full with European tourists.
It’s really interesting, travellers are already going to Iran. It has such a wealth of history and tradition. It’s amazing. It’s actually quite surprising. I would also see there would be benefit in being first to market in a place like Tehran and Isfahan. If we had an opportunity there and we didn’t have restrictions on sanctions, we would certainly be very interested.
Jumeirah Messilah Beach Hotel and Spa – Kuwait Hotel and Resort
In the many years you have worked in the hotel industry, what is the single biggest change you have witnessed from consumers? And how has this impacted how you run your business?
I think the biggest change is how consumers book hotels. It is now so easy to do it in comparison to what it was like before people had the power of the Internet at their fingertips. They have more information about our hotels than we have. They can research it. It interests me greatly.
People talk about 5-star, 4-star, 3-star, which is quite an old-school way of thinking. Ratings started back in the day so that people would have some comfort about where they were going to stay. They would know, “Okay, if it’s a 5-star hotel in Hong Kong, it’s probably a good hotel.”
Then after the standardised ratings came after the brands. The brands gave people the comfort to know the kind of hotel they were going to stay in. That moved on from the companies like Hilton, Intercontinental, Sheraton and how they were very much the pioneers. Then the brands became more and more powerful.
Now we’re living in a time where really people are less concerned about whether or not something is 5-star or 4-star. They know they have access to all the information they need to choose the right property for them. They can go on Expedia and compare prices and see pictures of rooms and almost experience the hotel before they arrive.
So the process of attraction has become far deeper and sharing information is key. As we develop our mobile apps, our guests will be able to get their room number before they arrive at the hotel. They’ll be able to check in by touching their phone when they arrive on the property. Technology has definitely driven the biggest change in the last 40 years that I’ve worked in the industry.
“ They have more information about our hotels than we have ”
And do you think that this is a positive change for brands?
It’s fantastic. It really puts us in a position where as hotel, we can get direct to market. We can talk to our customers directly. They can talk to us directly. It’s not that the hotel brand avoids having to pay commission to agents, we still deal extensively with travel agents and tour operators.
What’s great about it is that we can have direct access to our guests. We can promise them the best rate available on the day, but they might choose for different reasons to try to go to a consolidator or a travel agent, and that’s also fine.
I think that this freeing up of information to our guests has really provided them with amazing knowledge to be able to access our properties. Once they have the resource to understand themselves, then we know that we’ve a much better chance to actually get their reservation.
“ What’s great about the information age is that we have direct access to our guests ”
What is the next opportunity you would like your company to seize?
That’s a good question because I think that we’ve set ourselves on a very positive course, a very logical course in terms of developing our luxury brand of Jumeirah. Jumeirah Stay Different, different on an international basis.
What I would really like to see is that we deliver on our strategy for having at least 75 hotels. It’s not just about numbers, but it’s having the right hotels in the right locations that will really ensure the longevity of the brand.
This brand will become a world famous top 100 known brand, not just for hotels, but also in every sphere of life. This is how Jumeirah is beginning to be known and will continue to be known. To keep Jumeirah up there very much as the top end of brands and very much not just in hotels, but also in the whole universe of brands.
Burj Al Arab, Dubai
What is the biggest challenge the brand will face in the coming years?
I think we have a good challenge actually because our biggest challenge is to continue to be able to find suitable talent and human capital, as we now like to call it, but actually people. The right people in our business is critical because we deal directly with our customers. As employees in the hotel business, we have a great opportunity really to represent our brand and represent our product day in day out.
We’re always looking for highly talented people, highly motivated people with the right attitude. Because of our expansion, our greatest challenge … As I say, it’s a positive challenge to have that we’re out there looking for the best people in hospitality to come and work for us. It’s a great time to be graduating from l’Ecole Hotelier de Lausanne or the Emirates Academy of Hospitality and Management.
For more in our series of conversations with Luxury Leaders, please see our most recent editions as follows:
- In Conversation With Torsten Müller-Ötvös, CEO, Rolls Royce
- In Conversation With Aurel Bacs, President, Grand Prix d’Horlogerie de Genève
- In Conversation With Duncan O’Rourke, COO, Kempinski Hotels