Emaar Hospitality Group, the hospitality and leisure business of Emaar Properties PJSC, has launched a new model for hotel management agreements.
The new model offered by Emaar Hospitality Group is based only on an incentive fee, which is driven by the operator’s ability to generate profits rather than revenues.
Olivier Harnisch, chief executive officer of Emaar Hospitality Group said: “There will be greater responsibility on the operator to drive operating profits that will create sustained and long-term value for hotel owners, unlike under the prevailing model, where the operator earns a base management fee regardless of operating expenses.
“The distribution landscape in the hotel industry has changed dramatically over the past years and we feel that profit is a more powerful indicator of operator performance than revenue. We are leveraging our experience both as a hotel owner and operator in developing the new model.”
Emaar Hospitality Group has already signed several management contracts to operate hotels in the UAE, Saudi Arabia, Bahrain, Turkey and Egypt for other developers and hotel owners.
The new model is offered in addition to standard model and gives the hotel owners the opportunity to choose between the two.
Emaar Hospitality Group has a total of 20 hotel projects – in Dubai and Fujairah – as well as in international markets including Egypt, Bahrain, Turkey and Saudi Arabia.