Hotel operator Rotana Group is ready for an initial public offering and can list its shares “tomorrow” if its shareholders decide to go for a public float, but in the meantime, it aims to continue pursuing aggressive growth across markets, its co-founder and vice chairman said.
"The IPO is on the table and every time the board meets the option is discussed," Selim El Zyr told The National this week at the Arabian Travel Market in Dubai.
“We discuss if it is the right time and the value, do we get what we need. So, there is always a discussion going on and it is on the mind of everybody to increase value [for the shareholders],” Mr El Zyr said.
“It can happen tomorrow, if there is a consensus in the board and the shareholders.”
In terms of its IPO-readiness, the Abu Dhabi-based hospitality company is “almost” there, but the shareholders perhaps are waiting for a bit more growth before they are ready to give the nod, he said.
“They are, maybe, waiting that we reach a certain dimension, may be another 10 to 15 per cent growth in the next two to three years,” Mr El Zyr said.
“In terms of governance we have everything that an IPO needs … it’s just the decision [by the shareholders].”
Rotana is among the latest companies looking to ride the IPO wave in the broader Gulf region, where issuers have queued up to raise funds through listings.
Bourses in both Dubai and Abu Dhabi have also seen a sustained IPO momentum in the past few years, as the Arab world’s second-largest economy continues to grow amid diversification efforts.
There were seven IPOs across the UAE last year, including Talabat Holding, major retailer Lulu Group, ADNH Catering, NMDC Energy and Alef Education. IPOs in the UAE accounted for 47 per cent, or $6.2 billion, of total Gulf proceeds last year, according to a PwC report.
Overall, last year saw the highest Gulf IPO volumes on record, with 53 listings across the region and a total of $13.2 billion raised, the report said.
In 2021, the Dubai Financial Market unveiled an incentives programme to encourage new IPOs from private sector companies in key economic sectors that contribute to the country's gross domestic product.
M&A options
While IPO plans are still being hatched, Rotana plans to continue strengthening its presence in its existing markets and seek entry into new geographies, Mr El Zyr said.
The company, which has already mulled acquiring a hotel operator with a portfolio of about 50 hotels, is open to pursuing further merger and acquisition opportunities, both in terms of expanding its portfolio in current markets as well as gaining entry into new territories.
“We are open to both if there is a good opportunity,” Mr El Zyr said.
“M&A is a complicated exercise where you have to weigh options very carefully … but obviously, growth in the industry has happened through M&As. Everybody has acquired different brands.”
Rotana Group, which opened its first property in 1992, operates brands including Rotana Hotels and Resorts, Arjaan, Rayhaan, Centre, Edge, The Residences, and is also mulling plans to add a top-notch luxury brand to its portfolio to rival competitors in that segment.
“We are working on the plans, but we have to attract an investor,” he said, adding that the company has had a few discussions already with potential investors.
Portfolio growth
The group operates 79 hotels in markets including the Gulf, the wider Middle East region, Africa and Europe.
The hotel management company has maintained a robust growth momentum since bouncing back from the Covid-driven slowdown and Mr El Zyr said Rotana has “recovered 100 per cent of our numbers from 2019", which was one of the best years for the industry.
“Going forward, there is a yearly growth of 8 per cent to 10 per cent in our overall numbers … maybe more so in the bottom line. As Rotana expects about 10 per cent per annum expansion in the number of operating rooms and hotels across markets,” he said.
The value of the hotel portfolio being operated by Rotana is about $5 billion and if the company maintains the year-on-year projected growth, the overall value of the portfolio could double by the end of this decade, Mr El Zyr added.
In Saudi Arabia, the Arab world’s top economy and Opec’s biggest oil exporter, Rotana operates 13 properties with about 4,000 keys in total and has another 10 in the pipeline that are under development. The company expects the number of keys in Saudi Arabia reach the 10,000-mark by the end of this decade.
Across its portfolio of different brands and markets, Rotana operates about 20,000 keys and Mr El Zyr expects that number to grow by 50 per cent to 30,000 keys by 2030.
New markets
While it consolidates its position in the Middle East, Central Asian States and Turkey markets, the Abu Dhabi company is also keen to explore expansion opportunities in the UK – where it has agreements in place to develop 1,500 keys over several sites across the Greater London region – and other European markets, he said.
In Asia, China and India, as well as Hong Kong, Singapore and Thailand are on Rotana’s radar where it is seeking partnerships for its different brands.
In Africa, the hotels operator is seeking further growth in markets including Senegal, Congo, Gambia and Nigeria and by 2030, the company expects Africa to account for about the 10 per cent to 15 per cent of the total portfolio of properties.
“Africa is very interesting because of the fact that the existing hotel inventory is very limited, they have got a significant growth in middle class earning people ad there is always a good demand for quality events,” he said. “We are working on so many different projects.”
The US is another market of interest for Rotana but Mr El Zyr said the company needs to see the policy environment improve before it makes a move.
“America is the largest economy in the world, but we need stability as you need to see that an administration’s decisions do not change with individuals,” he said. “Our industry is long term … it's an industry that takes years to build and years to get payback on investments.”
Revenue boost
Rotana, which joined the Global Hotel Alliance in March this year, expects a significant long-term boost from the new partnership as it seeks to offer the 30 million members of the GHA Discovery loyalty programme options to stay across its own six brands in the Middle East, Africa, Eastern Europe and Turkey.
Over the next five years, Rotana could see a 10 per cent to 15 per cent, or perhaps even up to 20 per cent increase in its revenue although the exact number is difficult to project as it is a long-term process, Mr El Zyr said.
“We have an opportunity now to promote our hotels and our products … [and] our members will be able to redeem their points in countries where we do not have a presence,” he said.
“It will take at least one year for us to be fully integrated, and it will take another two to three years until the whole market knows that we are in.”
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Expo 2020 Dubai will be the first World Expo to be held in the Middle East, Africa and South Asia
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It is expected to attract 25 million visits
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December 11: 'My husband died, so what happens to the Dh240,000 he owes in the UAE?'
JL, a housewife from India, wrote to us about her husband, who died earlier this month. He left behind an outstanding loan of Dh240,000 and she was hoping to pay it off with an insurance policy he had taken out. She also wanted to recover some of her husband’s end-of-service liabilities to help support her and her son.
“I have no words to thank you for helping me out,” she wrote to The Debt Panel after receiving the panellists' comments. “The advice has given me an idea of the present status of the loan and how to take it up further. I will draft a letter and send it to the email ID on the bank’s website along with the death certificate. I hope and pray to find a way out of this.”
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SL, a financial services employee from India, left the UAE in June after quitting his job because his employer had not paid him since November 2018. He owes Dh103,800 on four debts and was told by the panellists he may be able to use the insolvency law to solve his issue.
SL thanked the panellists for their efforts. "Indeed, I have some clarity on the consequence of the case and the next steps to take regarding my situation," he says. "Hopefully, I will be able to provide a positive testimony soon."
October 15: 'I lost my job and left the UAE owing Dh71,000. Can I return?'
MS, an energy sector employee from South Africa, left the UAE in August after losing his Dh12,000 job. He was struggling to meet the repayments while securing a new position in the UAE and feared he would be detained if he returned. He has now secured a new job and will return to the Emirates this month.
“The insolvency law is indeed a relief to hear,” he says. "I will not apply for insolvency at this stage. I have been able to pay something towards my loan and credit card. As it stands, I only have a one-month deficit, which I will be able to recover by the end of December."
Stuck in a job without a pay rise? Here's what to do
Chris Greaves, the managing director of Hays Gulf Region, says those without a pay rise for an extended period must start asking questions – both of themselves and their employer.
“First, are they happy with that or do they want more?” he says. “Job-seeking is a time-consuming, frustrating and long-winded affair so are they prepared to put themselves through that rigmarole? Before they consider that, they must ask their employer what is happening.”
Most employees bring up pay rise queries at their annual performance appraisal and find out what the company has in store for them from a career perspective.
Those with no formal appraisal system, Mr Greaves says, should ask HR or their line manager for an assessment.
“You want to find out how they value your contribution and where your job could go,” he says. “You’ve got to be brave enough to ask some questions and if you don’t like the answers then you have to develop a strategy or change jobs if you are prepared to go through the job-seeking process.”
For those that do reach the salary negotiation with their current employer, Mr Greaves says there is no point in asking for less than 5 per cent.
“However, this can only really have any chance of success if you can identify where you add value to the business (preferably you can put a monetary value on it), or you can point to a sustained contribution above the call of duty or to other achievements you think your employer will value.”
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Carlos Prates (BRA) v Dmitry Valent (BLR); Bobirjon Tagiev (UZB) v Valentin Thibaut (FRA); Arthur Meyer (FRA) v Hicham Moujtahid (BEL); Ines Es Salehy (BEL) v Myriame Djedidi (FRA); Craig Coakley (IRE) v Deniz Demirkapu (TUR); Artem Avanesov (ARM) v Badreddine Attif (MAR); Abdulvosid Buranov (RUS) v Akram Hamidi (FRA)
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Intercontinental Lightweight: Ilyass Habibali (UAE) v Angel Marquez (ESP)
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Maradona Award for Best Goal Scorer of the Year: Robert Lewandowski (Bayern Munich)
TikTok Fans’ Player of the Year: Robert Lewandowski
Top Goal Scorer of All Time: Cristiano Ronaldo (Manchester United)
Best Women's Player of the Year: Alexia Putellas (Barcelona)
Best Men's Club of the Year: Chelsea
Best Women's Club of the Year: Barcelona
Best Defender of the Year: Leonardo Bonucci (Juventus/Italy)
Best Goalkeeper of the Year: Gianluigi Donnarumma (PSG/Italy)
Best Coach of the Year: Roberto Mancini (Italy)
Best National Team of the Year: Italy
Best Agent of the Year: Federico Pastorello
Best Sporting Director of the Year: Txiki Begiristain (Manchester City)
Player Career Award: Ronaldinho
