Orascom Hotels Management CEO discusses Mediterranean trends

Orascom Hotels Management CEO Joachim Schmitt is scheduled to speak in Athens next month at the Mediterranean Resort & Hotel Real Estate Forum, which is sponsored by Questex, parent company of Hotel Management magazine.

Schmitt is responsible for the executive management of Orascom‘s 34 hotels, ensuring the implementation of board strategy and policies. The company operates properties in Egypt, Oman, the United Arab Emirates and Switzerland, with additional projects under development in Montenegro and Morocco.

Schmitt will be speaking on “Branding Appeal: CEOs on Branding in the Resort Market." This session will cover the value brands bring to resorts, potential consolidation of brands and new brands entering the resort market. In advance of the conference, Schmitt shared his thoughts on business in a post-Brexit world, Orascom’s sustainability efforts and the benefits of attending events like MR&H.

How do you feel the hospitality- and leisure-investment climate is across the Mediterranean at the moment?

For the past few years, we have seen a steadily growing investment in the Mediterranean regions. This is due to the constantly improving infrastructure [and] the increasing quality of the tourist offers, but also because of the fact that travel is easy and fast due to the broad variety of short-distance flights in Europe. In the eastern Mediterranean in particular, a lot has developed in recent years: Montenegro is back on the tourist map [and] countries such as Albania and Macedonia are opening up to investors and tourism. Especially in Montenegro, in the destination Lustica Bay—developed by us—you can find not only an investment boom but also steadily growing numbers of guests from traditional countries of origin and also from areas such as the Asian market and the Middle East.

The recent sale of the equity stake in Oberoi Zahra, the 27-cabin Nile floating boat, to a private Egyptian investor is in line with the announced strategy from Orascom Development Egypt (ODE) to dispose of non-core assets, allowing more focus on core business of town development. Can you share more details?

Orascom Development has its origins in land and destination development, which is our core business. Thirty years ago, we created the town of El Gouna in the Egyptian desert, with today almost 20,000 inhabitants, schools, a university, a hospital, retail [and] crafts, as well as 18 hotels, resorts and two golf courses. In recent years, we have increasingly assumed the role of the operator as there are a multitude of synergies between the developer and the operators, from investors to financing to marketing. In Andermatt [Switzerland], we also operate the mountain railways, the golf course and tourism marketing through various companies. We are now consolidating our role as operators in our destinations. This is where our core competence lies and we can act quickly on the market with the one-stop-shop principle.

What shifts/trends do you see emerging for the region over the next six/12 months?

Europe is an extremely safe travel destination, not only for Europeans, but for investors from all over the world. In terms of sustainability, travel—and thus investment in secondary residences—will continue to rise in the coming months and years. Many destinations can be reached by car, which provides greater flexibility.

Have you seen a change in the profile of buyers and sellers in the past few years?

The market is getting faster and faster—real estate is a commodity and a good investment. However, comprehensive digitization and a good infrastructure are basic requirements for investors and buyers. More and more private individuals are investing in real estate and land as financial investments and then leaving the management to an operator. Here, too, we see new markets in the Asian...region that are investing in Europe—specifically in the Mediterranean.

Orascom's expansion plans include seven hotels in Montenegro, eight in Morocco, eight in Oman, three in Switzerland and three in Egypt. How do you approach this significant level of development sustainably?

All our projects include sustainable working, planning and management. Since the entire development comes from our pen, we have the greatest possible influence on it. El Gouna is a destination that recycles almost all its waste: paper and plastic are processed—for example, the hangers in our hotels in El Gouna are made of recycled plastic—water is recycled [and] organic waste is reused for energy. El Gouna has received the Green Star Award as the most-sustainable city in Africa. I take the liberty of saying that we are also a role model for Europe.

You’ve just appointed a PR company to raise the profile of Orascom Hotels in the U.K. Why is it an important market for you?

The U.K. market has always been and will remain an important market. We are convinced that even a Brexit in the business areas of investment and travel will not change much. We are talking about international business with global players—independent of political processes. In addition, we will be developing a new destination in Cornwall, England, in the coming years. Here, we are currently in the detailed planning stage...we cannot comment further at this point in time.

What is the value in attending MR&H for you?

We are very excited about the exchange among each other. There are so many high-caliber participants from all over Europe at the event that I am convinced that we will be taking with us lots of new impressions, new views and, above all, new contacts.

The “Branding Appeal: CEOs on Branding in the Resort Market” takes place on Wednesday, Oct. 30, from 9:30 a.m. to 10:15 a.m.