Hotel retrofits offer new income stream for Mideast contractors
Contractors could reap the same benefits from refurb and retrofitting programmes as they do from new builds, but is the regional market ready?
The economic significance of new builds cannot be overstated – construction work is responsible for income generation, job creation, and social growth in the Middle East, and it is critical that countries and companies alike continue to invest in the development of new infrastructure in the region. However, hospitality property owners and operators may find the retrofits and renovations equally beneficial for their businesses in the region.
Take the example of Egypt-headquartered Orascom Construction, which completed the ‘fast-tracked’ revamp of the Al Alamein Hotel this July. In a statement, the contractor said its work for the hotel was completed – including handover to Emaar Hospitality Group – in less than eight months. Orascom said it “implemented an intensive schedule to refurbish, upgrade, and convert” the hotel as it rebrands into a luxury, 200-room property.
The facility is based within Emaar’s Marassi resort on Egypt’s North Coast. A marina is currently under construction within Marassi, with Orascom acting as the project’s main contractor. Commenting on the development, Osama Bishai, chief executive officer of Orascom, said: “We are pleased to work with a big player and repeat client like Emaar and are proud to deliver this high quality project in record timing.
“Such projects are expected to boost Egypt’s tourism and our ability to consistently execute projects on a fast-tack basis will be of great resource to other developers,” Bishai added.
An overhaul is also under way at Dubai’s Jumeirah Beach Hotel, which shut its doors this May as it implements major renovation work that is due to complete in October 2018. The hotel will reopen in December, and the refurb is part of a two-year renovation programme that will cover 425 guest bedrooms and public spaces, including parts of the beach, restaurants, and lobby.
Sven Wiedenhaupt, general manager Jumeirah Beach Hotel told HotelierMiddleEast: “The famed wave-shape exterior of the hotel will remain untouched but the experience inside will be revamped, ensuring we are geared up to create another 20 years of memories.”
This May, Jesús Gutiérrez, co-managing director of Dubai-based energy service company (ESCO) Smart4Power, said the UAE’s ESCO community is facing difficulty persuading other construction stakeholders, especially large mechanical, electrical, and plumbing (MEP) contractors, to take part in retrofit projects. He explained that MEP companies are hesitant to “jump into the [retrofit] business” because they view the typical project value as “much smaller” than a new construction project’s, and therefore not worth the “hassle” of having to deal with issues like financing.
MEP contracting leaders may be justified in their reticence towards refurb projects, but as the regional hotel sector is proving, renovations are likely to become a steady income stream in their own right for the Middle East’s builders.