Jumeirah Group

views updated

Jumeirah Group

PO Box 73137
Dubai,
United Arab Emirates
Telephone: ( + 971 4) 330-0111
Fax: ( + 971 4) 330-0222
Web site: http://www.jumeirah.com

Wholly Owned Subsidiary of Dubai Holding
Incorporated: 1997
Employees: 11,000
Sales: $1 billion (2006 est.)
NAIC: 721110 Hotels (Except Casino Hotels) and Motels; 722110 Full-Service Restaurants; 722410 Drinking Places (Alcoholic Beverages)

Jumeirah Group is a fast-growing, Dubai-based operator of luxury hotels. The company operates several hotels in Dubai, including the iconic Burj Al Arab, dubbed by the company as the world's first "seven-star" hotel, as well as in London and New York City. Jumeirah is also negotiating new hotel operating contracts in such cities as Paris, Shanghai, Beijing, Hong Kong, and Milan in an effort to expand its portfolio from 12 hotels in 2006 to as many as 40 by 2010. The group's existing portfolio in Dubai includes the massive multi-hotel complex Mandinat Jumeirah, Jumeirah Emirates Towers, Jumeirah Beach Club Resort & Spa, Jumeirah Bab Al Shams Desert Resort & Spa, and the Jumeirah Beach Hotel. The company also operates the Wild Wadi Water Park in Dubai, and has reached an agreement to operate the Aqua Dunya theme park expected to open in DubaiLand in 2008. Also in Dubai, Jumeirah operates more than 100 restaurants and bars, including the Noodle House and Toscana chain formats. In London, Jumeirah operates the Jumeirah Carlton Tower and the Jumeirah Lowndes, and will also operate the Beetham Tower hotel, expected to open before the 2012 Olympic Games. The company's U.S. presence dates from 2006, when it took over operations of the Essex House in New York City. Jumeirah has been part of Dubai Holding since 2004; the company is led by CEO Gerald Lawless. In 2006, the company's revenues were estimated at more than $1 billion.

DUBAI TOURISM PIONEER IN
1997

Jumeirah stemmed from the determination of Dubai's ruling Maktoum family to develop the United Arab Emirate member into one of the region's, and the world's, top tourism destinations. In the early 1990s, Sheikh Mohammed al Maktoum commissioned a new hotel project, to be built on land reclaimed from the sea in the port of Dubai. Construction of the hotel, called the Burj Al Arab, began in 1994; the first three years of the project were, however, taken up by the land reclamation phase. Construction of the hotel itself was launched by 1997. In that year, Al Maktoum turned to Gerald Lawless, an Irish native with more than 20 years of experience in the hotel industry, including some 15 years in Dubai as head of the Forte hotel group there. Lawless put into place a management team and began recruiting staff for the hotel's operation. By then, too, Al Maktoum had begun to develop other hotel projects for the Dubai market, such as the Jumeirah Beach Hotel, which opened in November 1997. In addition, Al Maktoum developed a theme park, Wild Water Wadi Park, to add to Dubai's attraction as a tourist destination. That park opened for business in August 1999.

The opening of the Burj Al Arab several months later represented something of a milestone for the international hotel industry. Standing at more than 300 meters tall, just 60 meters shorter than the Empire State Building, and constructed on its own artificial island, the hotel became the world's largest self-standing hotel. Designed to suggest the sail of an Arabic dhow, the Burj Al Arab boasted more than 200 duplex suites, the smallest of which offered nearly 170 square meters, with the largest reaching 780 square meters. The hotel quickly became an emblematic element of Dubai itself. Under Lawless's leadership, the hotel also helped establish the company's reputation for high standards of service. The company itself labeled the Burj Al Arab the world's first "seven-star" hotel, a boast meant to top the increasing trend among luxury hoteliers to grant themselves "six-star" status.

Lawless helped oversee the next Al Maktoum hotel project, built as part of the Emirates Towers project in downtown Dubai. Nearly as tall as the Burj Al Arab, the Emirates Towers hotel offered 400 rooms, and enabled the company to market direct to the business traveler market. Following the opening of the Emirates Towers hotel, the company adopted the name Jumeirah International. The company took its name from the exclusive, largely residential Jumeirah coastal area of Dubai.

Jumeirah expanded again in 2000, taking over the operations of the Hilton Beach Club on Jumeirah beach. Originally built in 1980 as a club and spa facility for guests at the then newly constructed World Trade Center in Dubai, the Hilton Beach Club was later expanded into a full-scale resort facility in 1995, adding a 50-suite hotel to the complex. Following Jumeirah's acquisition of the facility's operations, the site was renamed Jumeirah Beach Club.

By the end of 2000, Jumeirah had made good on the "international" part of its name. In December 2000, the company acquired its first international contract, to take over operation of the Carlton Tower hotel in London. Located in Knightsbridge, the Carlton originally opened in 1961, and was the first five-star hotel in its area. The site was later acquired by Hotel Corporation of America, which rebranded it as Sonesta Tower; in 1982, when the hotel was acquired by Hyatt Corporation, it was renamed The Hyatt Carlton. Following Jumeirah's takeover of the site, at the end of 2001, the 200-room site was entirely refurbished and renamed the Jumeirah Carlton Tower. Also in 2001, Jumeirah took over a second London hotel, the Lowndes, set in the city's Belgrave neighborhood.

While continuing to seek new hotel properties to manage, Jumeirah also took steps to ensure its all-important supply of trained personnel. With few native Dubai residents interested in or willing to work in the service industry, the company was forced to conduct its personnel recruitment throughout the world. In 2001, the company established its own hotel training school, The Emirates Academy of Hospitality Management, in partnership with Ecole hôtelière de Lausanne. Jumeirah's academy became the first of its kind in the entire Mideast region.

GLOBAL LUXURY AMBITIONS
FOR 2010

Dubai remained the focus of the group's development in the early 2000s, however. The fast-growing tourism market, which remained quite healthy despite the turbulence caused by the September 11, 2001 terrorists attacks, produced strong demand for new hotels; Jumeirah's own occupancy rate soared as high as 90 percent and more, while its Wild Wadi operation had reached full capacity. In 2001, the company took over another former Hilton property, the World Trade Center Hotel Dubai, which boasted 333 rooms.

By then, construction had begun on Jumeirah's next hotel operation, the massive Mandinat Jumeirah resort. Called "the Arabian resort" by Jumeirah, the Mandinat complex extended along one kilometer of Dubai's coastline, and included three hotels, some 25 bars and restaurants, a spa and health club, 100,000 square feet of conference facilities and other amenities. The first phase of the project, the 292-room boutique hotel Mina A'Salam (Port of Peace), opened for business in 2003. The rest of the Mandinat Jumeirah complex was completed by August 2004.

COMPANY PERSPECTIVES

VISION: To be a world class international hotel and hospitality company, committed to being the industry leader in all our activities through dedication to our customers and colleagues.

Farther outside of Dubai city, the company oversaw construction of its next hotel complex, the Jumeirah Bab Al Shams Desert Resort & Spa. Designed to resemble an old desert fort, the Bab Al Shams featured 115 rooms. Construction of the resort began in January 2004 and was completed by November that same year.

Also in 2004, Jumeirah became part of the newly established Dubai Holding. Set up by the Dubai government, Dubai Holding regrouped nearly 20 government-owned companies spanning 11 industries. These included Dubai Properties, Dubai International Capital, Dubai Investment Group, and Dubai International Properties, all of which became strategic partners for Jumeirah as it developed its expansion strategy for the second half of the 2000s. As these companies sought out real estate and other investments throughout the world, they offered Jumeirah the opportunity to secure new hotel contracts. Rather than seeking to own hotels, Jumeirah was instead able to focus solely on building up its network of hotel management contracts.

This strategy helped the group come to the United States, in 2005, after Dubai Investment Group bought up the prestigious Essex Hotel in New York City. Jumeirah took over the hotel's management contract, starting in January 2006, while overseeing a complete refurbishing of the hotel, with a projected cost of $60 million. Following Jumeirah's takeover, the hotel was rebranded as Jumeirah Essex Hotel.

By then, Jumeirah had rebranded itself. In 2005, the company adopted a more ambitious strategy for developing its hotel management operations on a global level. The company changed its name, dropping the "International" to become simply Jumeirah. At the same time, Jumeirah indicated its interest in building its portfolio of hotels to as many as 40 by 2010, targeting such markets as Paris, Milan, Shanghai, New York, Tokyo, and other major world cities. The group optimism was boosted by its association with Emirates Airways, also owned by the Al Maktoum family. At the same time, Jumeirah had established a solid reputation for the high quality of its hotels, winning a number of industry awards, and attracting a great deal of interest from hotels seeking to hire Jumeirah's hotel management services.

Jumeirah's next success came in March 2006, when it sighted a contract with Shanghai Lixing Hotel, a joint venture between Shanghai Hotel Investments and Shui On Private Group, to manage a new hotel development in the Luwan District of downtown Shanghai. The 52-hectare site, which included retail and entertainment facilities, also included a 338-room luxury hotel, including conferencing and banqueting operations. The complex was scheduled to be completed by 2008.

By July 2006, Jumeirah had signed up its next major customer, when it reached agreement with the Nakheel group to manage its new Trump International Hotel and Tower, a $400 million hotel complex being built in Dubai. As part of that agreement, Jumeirah also took over operations of the Jumeirah Shoreline Hotel and Yacht Club, as well as another Nakheel development then under construction, The World.

KEY DATES

1994:: Construction begins on Burj Al Arab hotel complex in Dubai, owned by ruling Al Maktoum family.
1997:: Gerald Lawless joins Al Maktoum to create hotel management company, overseeing Burj Al Arab and other Al Maktoum hotel and resort projects, including the Wild Wadi Water Park.
1999:: Burj Al Arab opens for business.
2000:: Emirates Towers hotel opens in downtown Dubai; company adopts name of Jumeirah International; acquires Hilton Beach Club (rebranded as Jumeirah Beach Club).
2001:: Company begins management of Carlton Tower Hotel and Lowndes Hotel in London; founds The Emirates Academy of Hospitality Management, in partnership with Ecole hôtelière de Lausanne; acquires management of World Trade Center Hotel Dubai.
2004:: Company completes massive Mandinat Jumeirah hotel and resort complex; builds Jumeirah Bab Al Shams Desert Resort & Spa; becomes part of Dubai Holding, established by Dubai government.
2005:: Company changes name to Jumeirah.
2006:: Jumeirah begins management contract for Essex Hotel in New York City; receives management contract for new hotel complex in downtown Shanghai; signs multi-hotel management contract with Nakheel group; signs agreement to develop and operate Beetham Towers hotel in London.

By then, too, the company had received the management contract for the Saraya Aqaba development in Jordan, including its group of five-star hotels and water theme park. In another contract, the company joined with Saudi Arabia's Al Sharq Development, which was in the process of developing the massive DubaiLand hotel and theme park. By September 2006, Jumeirah had reached an agreement with Beetham Organization, which was developing the huge Beetham Towers complex on London's South Bank, to help develop and operate the tower's 261-room luxury hotel, expected to open before the 2012 Olympic Games. Jumeirah appeared well on its way to achieving its goal of becoming one of the world's preeminent luxury hotel groups.

M. L. Cohen

PRINCIPAL COMPETITORS

Hutchison Whampoa Ltd.; Ahmad Hamad Algosaibi and Brothers; Al Hamed Enterprises (Group of Cos.); ACCOR S.A.; Jardine Strategic Holdings Ltd.; Harrah's Entertainment Inc.; Emirates; Ritz Carlton Hotel Company L.L.C.; Hilton International Co.; Shanfari Group of Cos.