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After building the image of Dubai’s tourism, Jumeirah Group eyes international expansion

Interview - September 2, 2015

In an all-encompassing interview, Gerald Lawless, President and Group CEO of Jumeirah Group, shares his view on why Dubai is the most appropriate place to host World Expo 2020, as well as the opportunities arising from new macroeconomic dynamics and the importance of technology and sustainability to “stay different” in the global market


What is your perspective on the potential of Expo 2020 and how is Jumeirah supporting this event?

First of all, it is entirely appropriate for Dubai to have been chosen as the venue for Expo 2020, as I think the UAE and Dubai really came together very well and the whole community within the UAE, both nationals and expatriates, worked very hard to make it happen. Because of this, it is really hard to imagine a more appropriate place than Dubai to hold the World Expo 2020, especially with the ongoing evolution and development of, for instance, Dubai Al Maktoum airport emphasizing again the importance of Dubai as an aviation hub, and the Jebel Ali port, which is in the top fice in terms of TEU usage. We can see that Dubai is suited to hosting a major international event. Furthermore, there is the whole human infrastructure of Dubai, as we have nationalities from every country in the world who live here and continue to come.

At the same time, I think the UAE in particular has not lost sight of its own culture and its own history and background. One of the greatest things here is that the people of the UAE have embraced the modern era without losing the soul of the country, as it is still very much an Arab country and one is that very proud of it. The long-term expatriates here are also pleased to have Expo 2020 in Dubai.

I think the original theme of “Connecting minds, creating the future” represents Dubai's DNA and it is very much how the future is going as well, as we are all going to be an absolutely and totally integrated and interconnected world. It will be interesting to see then how the role of nation states will have to evolve with the fact that people across the world have a lot more in common and know a lot more about each other than they have ever known before. 

You touched upon the importance of the growth in aviation. What is the impact of aviation on the tourism sector in Dubai?

What we see in the hotel business is that airlift is the lifeblood of our business, particularly in a location such as Dubai where most of our visitors come by air into our country. If it were not for the evolution and development of Emirates Airline since it was founded in 1985, it would not have been possible to evolve and develop tourism infrastructure and the hotel industry to the level that we now see in Dubai and the UAE. So in answer to your question, I would say it is vital.

If we look at Jumeirah’s global expansion, what are the destinations abroad you are currently considering? And on the other hand, what are the fastest growing markets in terms of incoming tourists in the UAE?

At Jumeirah, we really look at the foundation of the brand, which is very much the infrastructure of the beautiful properties that we have in Dubai itself. It became obvious to us as we were bringing guests from all around the world who kept saying that we should have hotels in their home cities. Naturally, we always consider that it is good for Jumeirah to evolve and develop the brand out of Dubai, but that at the same time we never lose sight of our Dubai identity in terms of how we evolve and develop that brand on a global basis. We will continue doing that because we have the opportunity to do so, but we want to make sure that we keep the authenticity of the brand. We are looking at top international cities, but also pristine leisure locations. That is why it was important for us to be in the Maldives for example, and we are now doing a hotel management contract in Bali and we have also signed up in Mauritius. We will continue then to develop both sides – business and leisure – and in many cases they are the same market. Very often a businessperson will come here for a convention or a conference and decide it is a great place to come with his family, so the same person can end up as a tourist. Therefore, you have different markets depending on the purpose of the visit.

In terms of incoming tourists, I think we will achieve the target of 20 million tourists annually by 2020. Many people are quite nervous about the large supply of hotels in Dubai. But necessity is the mother of invention, so if you have a lot of hotels, you have to invent reasons for people to come here. This will make us a lot more innovative and a lot more energetic to get people to continue to come here right up to the level of at least 20 million visitors by 2020. In order to do that, we should continue with the encouragement of investment in theme parks, for instance.

I think Dubai will always be a high quality destination, as we will continue to evolve and give even more choices for visitors to come here. However, there are many aspects of international tourism that need to be considered. For instance, some people wonder whether European tourists will keep coming now that the euro has depreciated. Well, they are still coming. I remember when the euro was introduced, I think it started at 1.16 per dollar and went down to 0.87, and yet we had Europeans coming here. I think with our prices in Dubai, we will continue to be competitive. But also, currency is not the only thing that drives tourists. Tourists go for other factors, they like places that have always been in their minds and look at the way Emirates promotes Dubai and how the Department of Commerce and Tourism Marketing (DCTM) promotes and markets Dubai internationally, particularly now with Expo 2020 coming up.

You mentioned the macroeconomic factor of the exchange rates. What are the opportunities with the appreciation of the dollar? How is the American market performing?

It is performing, though it is relatively small. Something we need to convince the Americans of is that the Middle East is a good place to visit – particularly Dubai – and that the UAE is very much a unique place within the region, a heaven of peace, security and tolerance. However, I still believe we need to continue working hard on the promotional side to convince Americans to come here, so it will take time to get a real volume coming in. We are getting a lot of Americans coming in because of the connections offered by Emirates at the moment, and a lot of them are also people who might have some ethnic connection with this part of the world. For instance, many Lebanese people come here from, say, South America, and then go on to Lebanon, and a lot of Iranians from the West Coast will come through here too. Hence, there are plenty of reasons to come but plenty of opportunities to keep promoting as well.

China is also a very important market. There is a bit of turmoil in China right now but their currency has been liberated and it is quite strong, so they have good value for their exchange rate. We were at Dubai Week in Beijing recently, where we were promoting Dubai. We were surprised to find out that over 200,000 Chinese people already live here. There is a high awareness, especially of Jumeirah, of our product in China and we are very much high in demand, and I see great growth coming in. It is still a small number in absolute terms, but in terms of growth it is the fastest growing market that we have. On the other hand, we look forward to the Russian ruble recovering, as Russian tourism is important. Another nation that we found has been consistent over the decades has been the United Kingdom, as it has continued to really look at Dubai almost as a second home, with many English people coming to Dubai as if they were not going abroad.

If we look at new opportunities for business, we recently had an interview with the Secretary-General of the UN World Tourism Organization, Taleb Rifai. He mentioned the opportunity stemming from MICE. What do you think is the potential of Dubai to become a global center for MICE and what could be the spillovers for Jumeirah's future growth?

MICE is not a new business to Dubai; we were doing it with the World Trade Center in the 1980s. We have all seen the importance of this market, which is particularly interesting for its global nature. I remember we opened the Jumeirah Beach Hotel in 1997 and the head of Ford Motor Company came to see us in January 1998 because he was launching Jaguar cars. So, we were doing a lot of MICE business and I think it is a great assignment, because as well as pumping huge amounts of business into the economy any time that it comes, it also showcases the location. That is really important for future business because that is when people will come to stay with their families.

I think it is a great long-term business for which we should continue to ensure that we have adequate facilities in terms of our convention centers, hotels, and huge exhibition areas – as will be the case of Expo 2020. In addition, thanks to the expansion of Emirates, we also have the logistics covered. All those factors combined really make Dubai one of the most natural choices for major international conventions. I hope that it will continue because I think it is part of this globalized world that we live in, and that we should be having more and more of these exhibitions and showcases.

You mentioned the importance of the branding activities that DCTM is doing. In Dubai alone, DTCM expects at least 139 establishments, including 91 hotels and 48 hotel apartments to come into the market in 2016. Are these tourism-related developments going to be sustainable beyond 2020?

I think this expansion of the hotel supply will happen with or without Expo 2020. We have the target of getting to 20 million visitors by 2020 and if you look at it now, we have 14 million and an 84% occupancy rate, with a total availability of 85,000 rooms. Hence, if we are going to go to 20 million, we have to work it out. There are peaks and we need to have availability at those times when the occupancy will be practically full, but I think any occupancy levels of 75%+ can be very profitable for the industry. Furthermore, there are modern building methods coming in all the time and we need to make sure that we continue to have lots of competition in terms of contractors so that they do not put the price of construction up to a level that makes the investments difficult. That is something that I really hope will continue in Dubai – a good supply of building contractors for innovative properties. Other than that, I think we are pretty sure that everything will go fine geopolitically and there is no reason to think otherwise.

From what we have seen over the last number of decades, I really think it is a fallacy to think that there is going to be a cliff at the end of Expo 2020. There will be a spike in 2020, but in 2021 is the 50th anniversary of the founding of the UAE, so we are going to be very busy with that as well. I see that with the energy we have in the business, and with the leadership that we have in the government, we should look upon Expo 2020 as an opportunity where we would have had these hotels anyways.

How do you think the digital economy is transforming the hospitality business?

I think it is giving a great opportunity. I believe very much that technology should enhance the guest experience and not dehumanize it. Technology should make it more personal and more human because it gives us the opportunity to try to understand what you want. However, what I do not like to see is any encroachment into people's privacy; we have to get the right balance in our business between trying to anticipate what you want and using technology to give you a “wow” experience, while at the same time not making you feel invaded. We feel that respect for data protection is very important and at the same time we do not want to be holding up the evolution and development of technology. Therefore, it is indeed full of opportunities but full of responsibility as well for those of us who actually have access to that data.

We have to remember that if you come here on business and stay in a hotel, you would probably like to be anonymous, while maybe if you came with your family you like a little bit of fuss about you and you want people to take you to reception, walk you to your room, etc. It all depends on why you are visiting the establishment and these are the kind of things we should be aware of. This is the way that we say we are building into it, using technology to assist our employees and the hotel staff and actually being able to anticipate your needs according to the individual reason at the individual time. It is about using the information that we have intelligently to interpret what the customer’s needs are.

I also believe that, especially on the leisure side, people now coming on holiday are not just coming for sightseeing and sand, as they also want this sense of enrichment from their visit. To me this is vital and this where you can really start not just anticipating what you want, because we know what you want from past usages, but also guide the client according to his or her tastes. For example, if someone likes history, we can tell them about a new museum, and if there is someone that is interested in Islamic culture, we have a visit organized with the Sheikh Mohammed Centre for Cultural Understanding where our guests receive a lecture from an Imam who tells them about the similarities between the three monotheistic religions, Christianity, Judaism and Islam, and they talk about their similarities rather than their differences. The other thing we do is a turtle rehabilitation program, where we have now rescued 700 turtles. We are showing that in the tourism industry we are concerned about the environment; we do know that we have to protect the product that we are promoting, and that is a pristine environment and lovely beaches to come and to lie on. It is a great opportunity for us to do all of this, and I think in a way that connects to technology as well, because you are using it for good purposes.

So can we say that Jumeirah's tagline ‘stay different’ is also relevant in terms of reconciling luxury with sustainability?

It is vital and I think that now nobody wants to be the cause of the deterioration of the product. Some people now say that because a destination becomes open to tourism, it is a bad thing, but if you think about it, it is truly a force for good. Tourism at the moment supplies 277 million jobs worldwide, going towards 300 million within the next four to five years, and it also supplies entry-level jobs for young people to start on the employment ladder. People often forget that if you build a hotel, you keep the local community together and your responsibility as an employer is to ensure that you are looking after and reaching out to the local community.

Actually, tourism is usually a force for good. Moreover, it introduces people to each other and gets them to interact. There are many people that come here for the first time and say they had never imagined how beautiful the Arabian Gulf was and how nice people are. Therefore, from that perspective it is really important and sustainability is something that we have a huge responsibility for in that regard, not only to our own industry but also to the world in general.

Back to the technology side, I think that the whole travel experience can be made much simpler for people by the use of technology. A couple of years ago in Abu Dhabi, someone at the WTTC summit told me that with technology they can interface all the different touch points on your journey. For example, if you are going from London to Dubai, when you check in at London you swipe your passport; that swipe of the passport alerts immigration that you are leaving and the airline you are boarding, but it also has the potential to alert immigration in Dubai that you are arriving and the hotel that you are definitely flying so you will definitely come. Then, you can come out and have a Rolls Royce ready to take you to the hotel. This can be done and what we should do is use the potential we have and the knowledge that we have already. This is new, it is available and we are not doing it. We said the same thing with the whole visa situation; we work with the UNWTO, the World Economic Forum and the WTTC to try to get across to governments how important it is to have a much more efficient system and even better security through the issuing of e-visas. We say to the governments that we are not trying to abolish visas or touch on security issues, it is about sharing a platform at the top level. There are people in China that have to travel two or three days to go to a consulate and queue so that they can spend money in our country, it is ridiculous. If you do not have best practices in your own country, another place like Dubai will take our place, because people now are very knowledgeable, they can go wherever they want to go and they will start seeking out new destinations.

You have been behind the establishment of Burj Al Arab, which is a landmark of Dubai and worldwide recognized as the most luxurious hotel in the world. If you had to pick one project to develop, what would that be and where would it be?

I would like to enhance our position in two segments of the business that we have talked about already: one is the corporate business and the other is the leisure side. For example, I would love to do something really interesting like a beautiful lodge in Africa, and to develop and evolve that side of the business, which I think has great potential. While you give employment to the local people, you are also helping to preserve the local wildlife in a sustainable way.  I think that is a great win-win situation.

On the other hand, I love international corporate hotels so I would like to see a Jumeirah in Singapore or Hong Kong. I love these beautiful metropolises of the Far East and I think they are very interesting places. Vietnam, Cambodia, Singapore and Hong Kong are just amazing destinations and you see such a mixture of people.