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Ramee Group Plans 10 New Projects in 2010: Chairman

DUBAI — Ramee Group of Hotels & Resorts, one of the leaders in the mid-market segment, plans 1,220 rooms that include four and five star properties in Gulf countries and India next year.

The UAE-based group owns 32 properties including hotels, hotel apartments, and resorts in the UAE, Bahrain, Muscat and India.

“We are planning to launch 10 more properties including three in the UAE next year,” Chairman and Managing Director of the group Raj Shetty told Khaleej Times.

Once the capital market is back on track, the group will launch its initial public offering at the Bombay Stock Exchange and then in Dubai. While welcoming new inventories in the country he said, “Only professional hoteliers will survive in the competition during the crisis time. The current rates are very attractive to promote mass tourism.”

Below are excerpts from the interview:


Q) What is the outlook for hospitality sector?

A) Dubai is an excellent place for tourism as it has the best infrastructure to attract tourists. The emirate has been created for mass tourism, where everybody can afford and I think there will be opportunities for tourism. If we really want to boost the economy of the country, mass tourism should be promoted with minimum profit and more of volume and that is the only solution to get in the right direction.

On the other hand, luxury tourism segment is very limited in quantity. Mass tourism means middle class people, executives and those who come for holidays with their families and on business trips. Hotels should be value for money and the there should be government support as well. Visa charges should be reduced to attract tourist. Middle class people select destination according to their budget and if we can provide affordable holidays here, they will definitely think about Dubai. For example, India offers a lot of choices to tourists with some free services. Due to heavy inventory, hotel rates are very reasonable and affordable in Dubai. Some five star hotels are offering below $100 per night, which is a reasonable price.

Q) Is it tough to survive in a challenging time like this?

A) Doing business is always a challenge and I must say, “the fittest will survive.” One who does not focus on business, he or she will be out of the business. One who really takes care of the clients, really value their clients. When you provide the best service they will go and talk to others so your service itself is your promotion. Service has to be improved to retain guests and you have to do a more detailed work to get more business. From top to bottom and from junior to senior staff, you have to go for more detail. Make sure your guests’ holidays should be like ‘wow’ experience so when they go back to home. They will promote your hotel.

Q) Do you think that the drop in occupancy rates is a dangerous sign for the industry?

A) The current occupancy level is around 30 per cent down compared to last year, but it doesn’t scare me. I hope occupancy level will improve as I always think positive. Let a lot of hotel rooms come, only professional hoteliers will survive in competition. We are offering competitive rates without compromising on service quality. Compromise on rates is always acceptable, but service quality should be maintained. Make sure they are given more attention in detailing. Leisure segment of tourists account for around 60 per cent, business tourists 30 per cent and only 10 per cent in transit.

Q) Do you have expansion plans for the region and India?

A) We recently started our first restaurant outside our properties in Burjuman shopping centre and a fast food outlet in a Metro station, in addition to a hotel called ‘Regent Beach Resort’ in Dubai. We have planned a couple of new properties including four five star properties in the UAE, Bahrain and India.

Preparations are underway to launch 10 new properties in 2010 including five star, four star and a mall-cum-hotel. With these new properties, 1,220 new rooms would be added to our portfolio. But that depends on how much liquidity is available in the market. We are looking for easy terms and conditions from banks and at the moment banks’ lending rules and interest rates are a major hurdle for further expansion.

On the drawing board we have three properties in Dubai and one in Abu Dhabi.

We are also planning to grow in India and five properties are under process at different stages. We have almost finished a five star hotel in Bangalore and a four star hotel in Pune. A 2,50,000 square feet shopping mall in Chennai is ready to start in the first quarter next year.

Q) What are the challenges for the industry?

A) Hospitality sector has a lot of challenges, specially nowadays during the credit crisis where everyone is trying to save money. We are already prepared and know what to do for survival.

Q) If you compare hotel and hotel apartment, which segment is performing well during the crisis time?

A) Guests prefer hotel as their first choice. Since hotel rates are affordable, then chances for furnished apartment are less, because hotels provide breakfast and lunch.

Guests come in the morning and have lavish breakfast then go around and have a nice lunch.

Q) What are the key markets?

A) Since rates have become very attractive, we are focusing on Asia. Asian economy is still better than other countries, and Indian GDP is expected to record a 6 per cent growth.

I think, at the moment, these are key markets for us and we should target them to increase occupancy level and promote tourism in the emirate.

Q) Are you planning to go public?

A)) We are planning to list our company in India in a year’s time. First we will list our whole company at the Bombay Stock Exchange, and then consider some other markets including Dubai.

In India, Mahindra and Mahindra launched a hospitality sector Initial Public Offering this year for its Mahindra Holidays & Resorts, which was oversubscribed by 10 times and book building was excellent.

Q) Do you have plans to get involved in property management business?

A) We never get into the management agreement. In future, if we find any good opportunity then will think about a tie-up.

Our core business is hotel and we will do our core business only. We can grow horizontally and vertically in the same hospitality business. We wanted to do chain of restaurant business outside our properties. We have plans to open more restaurants in Dubai and other emirates.

Q) Why did you choose this industry?

A) My family background is hospitality back home and I used to work in hospitality sector with my family 
in Mumbai. My uncles and my father own restaurants. I used to work with them from the age of 12. I dreamt of starting a hotel back then.

· abdulbasit@khaleejtimes.com