The economy of GCC region is undergoing a diversification with the tourism and hospitality playing a vital role in growing the services sector; in fact, GCC has currently one of the largest hotel growth pipeline in the world. As the tourism sector expands and business travel picks up pace, enhancing visitor experience has become one of the top priorities in the region. While GCC nations are investing aggressively in infrastructure and tourism-related projects, the demand for advisory services for hospitality development, branding, operations and asset managment has increased.
Hotel management groups, development companies, and asset owners are expecting its advisors to provide strategic insights into the Hospitality and Tourism landscape, brand dynamics and capabilities market trends, feasibility studies, competitive positioning and regulatory environment. Optimizing operational efficiencies, enhancing guest experiences, and improving revenue and profit performance are their top priorities. Development companies are aiming to achieve excellence in project planning, design, and execution. Asset owners are looking to maximize property values through effective asset management and cost control.
Fulfilling these expectations is MEREHA, a boutique advisory firm based out of Dubai. The firm facilitates informed decision-making and mitigation of risks, ensuring that its client’s investments yield profitability and sustainable growth in the competitive hospitality industry. Along with its partners, it has cultivated extensive relationships over the years. With MEREHA’s multi year working experience with brand operators, asset owners, and development companies, its team understands the hospitality business from all stakeholders angles. This journey has taken the firm through acquisitions, design and development and asset management phases, and the successful launch of multiple projects workouts, turnarounds and restructurings.
“We have collaborated closely with various operators and owners, straddling both sides of the equation. Our expertise extends to diverse roles in asset management, acting as asset custodians between hotel brands and ownership entities, all with the core objective of driving profitability.
Our collective experience uniquely positions us to offer invaluable guidance and support to developers and investors, enhancing the financial performance of their projects and assets”, says Fredrik Jonsson, MEREHA - Managing Partner.
Strategic Branding for Unique Development Projects
While collaborating with property owners and developers, brand selection holds paramount importance in MEREHA’s scope of work, encompassing two distinct areas. Firstly, there is the conventional hotel brand selection, as part of the new hotel development cycle, many times a required step in providing a platform to secure debt and equity funding for a development.
Secondly, in the current real estate environment, MEREHA often encounters scenarios involving a combination of Branded Residential Real Estate and a more classical hotel structure, which allow devleopers to drive investment returns. For each one of these scenarios, or a combination thereof, MEREHA has solutions and best practice advisory, using its established resource base and specialist team members, to ensure that client’s development value is maximized.
Diligence plays a pivotal role in the firm’s approach. It treats operator selections with the same rigor and thoroughness as it would when conducting an RFP for design firms or contractors. It fosters a competitive environment by identifying and inviting suitable brands tailored to each project's unique requirements, recognizing that each client and each project is unique.
Discerning the development's purpose and vision, MEREHA pinpoints the operators best suited to evaluate the opportunity. The firm’s approach is systematic, commencing with a meticulously structured hotel operator selection process. It outlines the crucial commercial and legal terms, engaging in negotiations with these chosen brands, against its fully developed benchmarks, persisting until a mutually beneficial commercial agreement is reached. This structured process is designed to safeguard the owner's interests and maximize the value derived from the operator relationship.
Our expertise extends to diverse roles in asset management, acting as asset custodians between hotel brands & ownership entities, all with the core objective of maximizing asset values
Optimizing Hospitality Projects
Starting with a thorough analysis, MEREHA focuses on the commercial attributes specific to each site, whether it is a three, four, or five-star property with potential retail components. MEREHA, together with the client, determines the highest and best use for each site, progressing through conceptual planning, design, operator onboarding, and negotiations. This journey continues through construction, with its involvement extending to pre-opening activities, including budgeting and team selection. It collaborates closely with hotel operators, ensuring a smooth transition through the handover process and sign-off, into marketing and post-opening activities to maximize project success.
From the very start of a project, MEREHA engages in comprehensive asset management, offering a holistic perspective on hotel operations. This 360-degree view encompasses commercial strategies, performance assessments, and budget evaluations. Going beyond image management, the firm meticulously reviews and provides strategic guidance for hotel assets, whether related to capital or operational aspects. This includes scrutinizing elements of the profit and loss statement, such as staffing ratios, procurement costs, menu optimization, engineering, and revenue management strategies. MEREHA’s successful track record includes instances where it has improved profit margins by over 75 percent, through a combination of improved revenue positioning against the hotel’s competitors and detailed cost managment, showcasing its ability to drive bottom-line performance and significantly enhance enhance asset and equity value for its clients.
Evolving with Expertise & Relationships
MEREHA’s journey began with an entrepreneurial spirit, evolving into a reputable advisory practice through collaborations with various entities. It has rapidly established its identity in the corporate world as it transitioned into advisory role. Its business thrives on relationships, as word of mouth and referrals drive client engagement, with its skilled partners covering diverse sectors throughout an asset's lifecycle. Many of its clients continue working with the firm, whether for one-time assignments, asset reviews, developmental phases, or ongoing asset management.
Going forward, MEREHA is committed to remaining a private and boutique firm, which allows it to maintain active involvement with its clients. It anticipates growth opportunities in the GCC region with its focus on project-driven expansion. “Our clients often guide our growth direction, and we aim to leverage our experience to provide valuable insights to developers lacking significant Hospitality exposure. In the longer term, we are considering partnering with third-party investors in developments, which is leading to the creation of a diverse portfolio within the current planning horizon. As we mark our sixth year, we look forward to further expanding our regional presence while upholding our commitment to client objectives”, envisions Jonsson.
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