$2 billion investment plan for Islamically-compliant hotels
A $2 billion plan to develop an Islamically-compliant hotel brand portfolio appealing to lifestyle travellers - both Muslim and non-Muslim - is to be outlined to potential investors.
Abdulla Mohamed Almulla, Chairman of Dubai-based Almulla Hospitality, will reveal details of a multi-brand chain of up to 90 international hotels operating under a Shari'ah supervisory board at the Arabian Hotel Investment Conference that takes place in May in Dubai. He will explain to institutional investors and high net worth individuals the company’s plan to establish a hotel chain with universal Islamic codes such as no alcohol and Halal food only under the brand names of Cliftonwood, Adham and Wings.
“In less than a decade, Middle East leaders have transformed the landscape and created one of the world’s fastest growing regions, with hospitality investment at its core,” Almulla said. "The Islamic hotel chain is the new wave coming through," he added.
“The market for Islamic hotels is currently fragmented due to lack of professional management and we recognise the growing need for a professionally-operated international hotel chain which operates on Islamic principles.”
Recent surveys have revealed plans for $3 trillion worth of tourist developments in the Middle East between now and 2020 - $1 trillion for around 900 hotels. "We are aiming to capture between five and 10% of that growth – between 45 and 90 hotels," Almulla said.
The company plans to grow its portfolio through management contracts, joint venture investments and selective acquisitions across the world using a variety of investment structures, including equity funds. All financial structures will conform to the Islamic ban on interest with returns derived from physical assets.
The initial destinations targeted by Almulla Hospitality are Saudi Arabia, the United Arab Emirates, Jordan, Egypt, Malaysia and Thailand. The company is also looking to set up operations in Europe.
Almulla believes there is a huge untapped potential market for uniquely Islamic hotels as more and more Muslims travel not only for religious reasons but also for business and leisure. “The Muslim traveller market is growing around the world due to increasing wealth combined with conscious lifestyle living and represents 10% of the world tourism market - one of the fastest growing segments,” he said.
There are individual Shari'ah-compliant hotels throughout the world. “But our brand proposition is international – whether the country is Muslim or not - so that guests will be confident of our universal consistency,” Almulla explained.
“In addition, our hotels will appeal to non-Muslims as well because of their socially responsible culture. Hospitality is an integral part of Islamic culture and our hotels will provide a unique service not only for the Muslim community but for those of other religions and cultural backgrounds.”
Almulla will detail the business case in his presentation to potential investors at the Dubai conference. For example, travellers from the Gulf Co-operation Council countries spend over $12 billion annually on leisure travel alone, according to the World Travel Organisation.
“$3 trillion is forecast to be invested in the region’s tourism and supporting infrastructure and by 2010 outbound tourism trips from the Middle East are expected to increase to $44.8 billion, an annual growth rate of 5.5% ,” Almulla added.
Saudi Arabia is one of the biggest outbound travel markets in terms of average spend with tourists from the kingdom spending $6.7 billion annually on overseas travel. Travellers from the UAE are close behind at more than $4.9 billion, an average of $1,700 per trip, which is $500 higher than the European average.
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