Hilton’s High Hopes for Dead Sea Resort

Hilton’s regional chief says his new Dead Sea resort will be open this summer, ready to take on the competition in Jordan’s increasingly competitive hospitality market.

Hilton is set to expand its presence in Jordan this summer with the opening of a new 285-room Dead Sea resort. The new hotel sits next to the King Hussein Bin Talal Convention Center that it has operated for several years along with a hotel in Aqaba belonging to its DoubleTree brand.

Rudi Jagersbacher, Hilton Worldwide’s MEA president, said the new Dead Sea resort and the increased competition will prove beneficial to Jordan.

There were several delays to your Hilton Dead Sea Hotel’s opening date. What was the reason for that and when will it finally be open?

It will be open in the summer. We had slight delays because when you build a big hotel like this you might face development and construction delays, so it’s only very normal.

How do you see it competing against the other five star hotels in the area?

We have our own market. We are one of the largest, with a pipeline of 1,115 new hotels. I think it’s very important that we are competing in a market which we are good at, and others will do the same. So I think as a destination you will benefit from all of this.

For a company as big as Hilton, how do you consider the Jordanian market?

We already signed a deal with the Jordan Gate project, which are the two famous towers. I think that one of the key issues that we are in discussions with the local investors and government about is to try and speed up the completion date. It’s a very big financial budget. Before the crisis it was fairly easy to finance, whereas after there were some hiccups. We run this on a very asset light strategy which we do throughout the Middle East and Africa. We bring in our team and our brand, which are our strength then we have an investor who puts in the capital. There’s a whole array of investors involved in this project but I cannot disclose who they are. But we have notified senior officials on several occasions, trying to help us to resolve this situation.

Have you been given any rough estimation when work on the Jordan Gate might restart?

It’s a little frustrating that it was never completed. But looking at it from a positive perspective it will probably only take a year to finish because a lot of the functionality has been done. When we talk to the municipality and the investors, there seems to be a very positive approach because clearly Jordan is doing well economically. And therefore being a mixed development that feeds hotel numbers and offices it will take care of itself. Today we need to work as a team to try and get it done.

If your project in Amman doesn’t take off, do you plan on moving to a different location?

A contract is a contract. But the contract is only related to [one] brand, which is Hilton. It still gives us the opportunity to develop other hotels so we’ve looked at projects for the last two years, both operating and new, and because of our strategy we are making sure that the project has a financial ability. You can build but you need to make money. So we won’t touch anything until it is financially stable. We are actually in negotiation with some hotels and developers for another hotel but I can’t disclose more about it.

Do you think there’s a need for more hotel rooms in Jordan?

There are a lot of new hotels coming up. If you have too many rooms what happens is that you’re not going to make the return which you promised your investors and therefore we will look at this stand alone. I think one needs to be very careful. The market which we are looking at is the international market therefore we need to inbound traffic which has a lot to do with demand generating. If you go through this situation in Qatar, Dubai, or Abu Dhabi they generally have huge inbound traffic through their carriers. But you don’t have that here. One of the advantages here is doing business. You can come in the morning and then leave the next day, so you have to provide them with things to do. Therefore you have a lot of possible activities like visiting the Baptism Site and Petra.

Jordan’s hotels have been suffering a lot of late. The government has tried to help them by significantly cutting their energy bills. Is this enough though?

It’s best to pay no taxes. If you look at the sector in Dubai, they have just done something different. Because the majority of the market provides luxury service, there’s now a tax break that’s been introduced if you build a four star hotel. That generates investor interest. If you look now at the development pipeline within that particular market segment, it is huge. That should be applied in Jordan, too. Everybody wants to stay in luxurious hotels but today not everybody has those kind of resources. I think it’s an excellent offering.

How’s the DoubleTree hotel faring in Aqaba?

Exceptionally well. Interestingly it’s been doing well from day one and going from strength to strength. There’s a double digit growth each year. Aqaba is at more of a standstill with all the huge developments so in this particular location the brand has done surprisingly well.

How has your growth been in the rest of the region?

In 2011 when I came to MEA, we were operating just around 40 hotels. Today we are actually operating and building 150. We are opening new hotels in Egypt and Morocco, so going forward on average we open a hotel every month. The UAE is very strong, so are Qatar and Kuwait. In the GCC the internal tourism is growing massively. Also, we finally see a double digit growth in Egypt in terms of customers compared to when it stopped in 2011.