Interview with Richard S. Zeolla, General Manager of Cairo Marriott Hotel & Omar Khayyam Casino

It’s not a secret that the tourism sector has been deeply affected by the political turmoil of the recent years. Different sources talk of a long-term damage for the industry. Moreover the latest report released by the Ministry of Tourism shows that the first half of 2014 brought 4.4 million tourists to Egypt, which is a 25% drop when compared to the same period in the previous year. What is the role of tourism in Egypt and to what extent, in your opinion, has this role been impacted due to the political unrest?

Traditionally, tourism was 10% to 11% of the GDP and a very large portion of the foreign currency reserves. It’s no secret that in the last three and a half years it’s been severely impacted. On the world stage, typically, when Egypt was in the news, it was because something bad happened. That shakes people’s confidence in security and safety. People are not going to travel to some place, especially for leisure, if they feel like they are somehow in danger. I would say in the last 6 to 7 months that sentiment has really started to improve. We are starting to see growth. It’s popping up from certain source markets. As long as the safety and stability continues and we stay out of the news for something bad, I really do think that the prospects are quite good. There is always a danger in comparing short-term, say 6 months or first half of the year. Beginning of 2014 has a completely different set of circumstances as compared to beginning of 2013. Beginning of 2013 was the best part of our business cycle last year. With a second revolution things really deteriorated in the back half of 2013. So we are comparing a growth curve now to what was kind of an already improved situation. So our prospects are really quite positive. For the end of this year going into 2015, we do feel like stability is there. The threats for instability are disappearing. People feel more secure and more confident. We are cautiously optimistic that in 2015 we are going to have our best year since 2010.

We have seen the change ourselves although it’s just been few months since we visited Egypt (in June); we witness that things moving, we see more tourists. When it comes to MICE tourism, what is your opinion about this particular segment?

There is tremendous potential for MICE in Egypt. It used to be such an important piece of business travel. The economics of being in the hotel business in Egypt, obviously, that was severely impacted. It is hard to sell an incentive package to somebody when you have got all these things going on. It’s an important piece of the business. Especially Cairo, it’s optimally positioned for that. 2 or 3-day program tied to may be a Nile or a beach and second part of the program and so on. Well it’s a great program. Historically, it’s been a very successful for companies to use. We hope that that tool comes back into our toolbox. There are lots of things to see here. For a 3 to 7-day package, if you just do 3 days in Cairo, it’s just great. If you are going to add the Nile, 7 to 10-days is great. That’s perfect for MICE.

To just briefly touch upon the numbers, what are the occupational rates? How do you see the trend?

Quite honestly, the current rates and the trend are really two different things. We just have rates specifically about our hotel, but in general the whole Cairo market would echo these sentiments. August was our best month since January of 2011 and historically, even our best August since 2008. So, that’s really very encouraging. Admittedly, mostly Gulf-based businesses coming from a specific market segment, but if that’s an indicator of where we are going, that’s great news.

You just mentioned the GCC region, do you have any particular strategy to attract certain regions around the world?

Each market is different. As a country, we are beneficiary of some deep goodwill on the part of the Gulf States ‘to want to see Egypt succeed’. I think there is a specific push in those markets for people to come to Egypt. Maybe they haven’t been here for a while. When you are talking about leisure, there are certain markets that are going to lead. Australians for instance, they seem to be a little bit more resilient. They are perhaps more adventurous than some of the other markets. They kept coming really through everything. Some of our European markets may be more familiar to us. I think the leisure will rebound there a little sooner. I am American, but I think Americans, admittedly, will probably be the last to come. It is a long journey. It is not inexpensive to come here. They are cautious travelers. They are going to make sure that everything is okay, before they pick up and come see the pyramids or do the monuments.

Let’s move to the hotel. Cairo Marriott Hotel & Omar Khayyam Casino is a luxury hotel situated right on the Nile in the proximity of Downtown. It’s a truly resort-like place and it was originally built as a real palace in 1869. Please inform the readers about the history of this place.

As you said, the palace was originally constructed to welcome dignitaries coming for the Suez Canal opening. That was the beginning of a very rich history for the hotel. It was originally designed after some palaces in France, Versailles for the specific purpose of impressing Empress Eugénie, who was wife of Napoleon lll. We play a very historic role in Egypt’s recent history. We see some parallels. Suez Canal is getting a lot of attention now. There is a very ambitious redevelopment plan underway. Hopefully, we can play a part in tying together the history from the 1860s and the future going into the middle 21st century. I am really looking forward to that. It’s not every day and not every GM gets the opportunity to operate a palace. It comes with its blessings and with some of its challenges. We have to have a museum curator onsite. Everything that we touch in historic parts of the palace needs the antiquities department’s authority to open, to fix to repair anything. It is a fine balancing act, but our team is up to the challenge and they have been doing it for 32 years.            

What else makes the hotel unique apart from its history?

The palace is one of the most unique pieces, but also you just have to look at the grounds. You couldn’t recreate this. If this property hadn’t been built on what was the palace grounds, you would never get the opportunity to build something this magnificent today. Gardens really transport you away from the reality of everyday life in Cairo. I mean, when you sit in a garden and enjoy your coffee, you could be anywhere in the world. The birds are singing; you don’t hear the traffic. It’s just amazing. No place else in Cairo can even closely approximate that. We have a wide variety of facilities, especially if you are here on a longer stay or you are on a project, you can eat in a different restaurant every day for two weeks and not have to duplicate yourself. So, we really do see ourselves as a kind of an oasis downtown. I would really hesitate to say, “city in a city”, because that terminology gets so much overused in the media. But we really are unique. We have got modern facilities. We are not staying in an antique room. We just added wonderful TVs. We have internet everywhere. So, you can stay connected, but still have quite unique experiences. So I think it truly is a special place. Another thing that really kind of tells us apart is that we are not only a palace, but the facilities that we offer are palace-sized. We have got 1,100 rooms in inventory, so we are really well equipped to handle many different functions at the same time without people getting in each other’s way. Inventory is not an issue for us.

Please describe the facilities that you offer. You mentioned there are different restaurants.

In terms of facilities, we have different cuisines to appeal to a wide variety. We have an American country restaurant and an English pub. We have got Egyptian Nights, which is really focusing on the cuisine from the country. We have got an Italian restaurant, one of the best steak houses in the city, a Japanese restaurant. Then there is other small bakeries so on and so forth. So there really is a wide variety. We have got the largest pool in the city. It’s really a nice focal point right at the center of our garden. Our garden Promenade Cafe is really 500 seats, so, if you want to see or be seen in the city on a weekend, this is where you need to be.

And the casino?

Yes, additionally, we have a 24-hour onsite casino that we operate at Marriott. Surprisingly, even with all the challenges that the market has had, our casino has done remarkably well and continues to do so. When we were doing some of the worst days, that was really one of the things that helped us pay the bills because the Casino business kept going. 

What are the comparative advantages of the hotel?

If you are looking at us compared to some of the hotels in the city, our Nile location is a plus. We are right on the water with Nile-view rooms. We are on the Zamalek side of the city. When the troubles were happening in Tahrir Square, you know as the crow flies, it’s not far away. It’s a mile or a mile and half away, but we were seen as the secure place in the city to be. We are on an island. To get here from there, you have to cross two bridges. We are on 24 acres and it’s fenced. So, really, if people felt insecure, this is where they were coming.

We have got full-meeting facilities, wireless internet around the property. We just added LED TVs in all the rooms. We are an interesting mix between modern and historic. We are going to continue. We have got very ambitious plans to continue to renovate and upgrade our facilities. We are a trusted name. We have been here for over 32 years. We will be here for a long time to come.

Could you elaborate a bit on the modern facilities being introduced by you?

I touched briefly on some of the modern aspect. Marriott is making a very concerted effort to engage younger travellers, who, quite admittedly, want different things than their parents or grandparents. So, we have to appeal to that customer base. One of the things that Marriott started middle of last year was a mobile check-in. We were one of the pilot properties for a mobile check-in experience, for Meetings Direct, which is an App that meeting planners can use to communicate with people onsite to say “we need the temperature up” or “we need a copy a coffee break”. We are taking a leading edge on that. We are very excited. Anytime there is a new initiative coming out that we feel like we can play a role in, we are always first to say “let us pilot it”, because if it is going to work here in this unique site, it’s going to work pretty much anywhere.

I am sure you are facing many challenges when it comes to doing business in Egypt, in Cairo.

The challenges for us are just seeing the road map. It’s not different from any other business that’s considering coming here. We have been here for a while and we have seen that a lot of things have changed and they are going to continue to change. For us, looking forward to 2015 and beyond, we just have to be cognizant of where the business environment is going. Obviously, wages are going to go up. A big part of the revolution was that people felt they were perhaps disenfranchised. That’s going to have to improve. That’s going to change the economics of ‘how you are staffed’, ‘what are the services you offer’ – things that might have been profitable to do, because you had a low-cost labour base. You are going to have to add things that make sense in the new operating environment. Utilities are going to get more expensive. Cost of goods is going to get more expensive, as subsidies fall away. It’s just a new reality for us. We are going to have to learn to operate in this new environment like every other business. Some businesses, some hotels survived by being a low-cost option over the last three years and the ability to do that and to stay profitable may be difficult going forward. So, things are going to have to change. Really, I spend a lot of my time thinking of what’s coming in next. What we have just been through in the last few weeks, how are things going to change? How are we going to be positioned to deal with a new reality? I think that is really where a lot of businesses find themselves today, whether you are in tourism or whether you are producing something for export or whether you are producing something for local consumption. All the economics have changed and they are going to change more. So, we have to really keep our ears open. We have to kind of mentally put ourselves two or three years ahead and figure out what we need to be to make sure we stay successful and to be able to do the things that we have always done historically well. But the landscape is going to change for sure.

Absolutely, the uncertainties are there, but the future—as it is now—seems promising. What is your vision for the hotel?

The vision for the hotel is that we continue to change. We continue to not only keep up with the market, but to lead the market into new innovations, offer things that new travellers are looking for, while we still retain our old customers. We can’t just forget them. So, you are going to have travellers in the next five years that don’t want any interaction at all. ‘I want to be able to go to my room and use my watch or use my phone to open the door. I don’t want to have to see anybody’. And you are going to have other customers that really want that high-touch, that personal experience. As an industry, we are going to have to figure out how to please both customers, because they are both important. One is up and coming and the other has been very loyal for a long time. So, my vision for us is that we continue to innovate, to strike that balance, to find things that enable us to do what we have been doing very well historically and we do better.

Is there anything else you would like to add?

Thanks for the opportunity. I really enjoyed talking to you.

Thank you.

FAIR USE POLICY
This material (including media content) may not be published, broadcasted, rewritten, or redistributed. However, linking directly to the page (including the source, i.e. Marcopolis.net) is permitted and encouraged.