KPMG_KICC_2017_MDI Gurgaon

2017 KPMG International Case CompetitionDeveloping and Applying Expertise to Dubai’s Upscale Hospitality Industry3rd Jan 2017Team Konsultanate – MDI, GurgaonAyan Dasgupta | Dipankar Tripathy | Kaustav Datta | Shraddha Singh

Contents Page

Executive SummarySituation Analysis

[3][4]

■ Types of Hotels and KPIs [4]

■ Trends and Ownership Models [5]

■ About Jumeirah [6]

■ Dubai Upscale Lodging Market [7]

■ Seasonality and Demand [8]

Recommendations [9]

■ Internal [10]

■ External [11]

■ Country Specific [12]

■ Timeline [13]

Risks and Mitigation [14]

Executive Summary

Overview

Recommendation

Background

Objective

Risks and Mitigation

Jumeirah’s vision and guiding principles

• Internal• App• Voice Control Personalization• The Jumeirah Experience

As emergent middle classes seek the material aspect of luxury travel, more mature markets are craving a new, evolved kind of luxury. This is why offering luxury customers a relevant, personal and exclusive experience will become even more crucial than it is today – it will be a differentiating factor between old and new luxury.

Finding a suitable, optimized expansion strategy for Jumeirah in accordance with its Vision, Mission and Corporate Culture.

• Political and Economic – mitigated through hedging• Brand Tarnishing – mitigated through proper segmentation• Cultural Fit – mitigated through adaptation• High cost of Cruise – mitigated through smart marketing campaign

Executive Summary Situation Analysis Recommendations Risks

• External• The Jumeirah Cruise Line• Expanding Venu into China, India

and Singapore• Expanding luxury hotels into

emerging markets in Riyadh, Oman and Mozambique

Complications

• Luxury hotel market saturation in Dubai, growth of midscale properties

• Changing economy

Approach• Internal – Adapt to the Changing Economy

• Partnership - Technology with Google• Personalize - Technology• Promote - Branding

• External – Dominate Luxury Niche• Expand - Global• Elevate - Global• Evolve - Local

Situation Analysis – Types of Hotels and KPIs

Types of Hotels

Economy Midscale Upper Midscale Upscale Upper Upscale Luxury

Upper Upscale Luxury Major Luxury Exclusive(Jumeirah)

Key Performance Indicators

Online Search Traffic Number of Rooms Sold Upper Upscale Search Share: 56%Growth: 7.9% y-o-y

Luxury MajorSearch Share: 25%Growth: 5.9% y-o-y

Luxury ExclusiveSearch Share: 19%Growth: 9.6% y-o-y


Situation Analysis – Trends and Ownership Models

Emerging Trends in the Luxury Hotel Marketplace

Growing Focus on Boutique or Lifestyle Holes

Increasing Emphasis on Guest Engagement

Reacting to a Consumer Empowered Environment

Providing Guests Total Value

Adhering to Customer Recommendations

Working with more Competitive Bidding for

Meetings and Businesses

Ever-changing and Dynamic Revenue Management

Ownership Models for Luxury Hotel Industry

Full Ownership Management Contract Franchise Lease and License

-10%10%30%50%70%90%110%

-20%

-10%

0%

10%

20%

30%

40%

50%

Demand Growth-Share Matrix

Relative Demand Share

Rela

tive

Dem

and

Gro

wth

China

UAE

IndiaUSA

UK

Germany

Singapore


Emerging middle class and changing preferences

Growing luxury market in China, India and Singapore

Near-saturated luxury hotel market in Dubai

Jumeirah’s VisionTo be a world-class luxury international hotel and hospitality management company, committed to being the industry leader in all of our activities through dedication to our stakeholders, colleagues, customers, business partners, and owners.

Jumeirah’s Principles

Situation Analysis - Jumeirah


STAY DIFFERENT – The Jumeirah Experience

Jumeirah’s Hotels

To Inspire and Excite

Burj Al Arab Madinat Jumeirah

Jumeirah Frankfurt

To Remain Culturally Connected

Recognition

Dhevanafushi

Jumeirah Himalays

Thoughtful and Generous Service

Burj Al Arab Jumeirah Creekside

Jumeirah Carlton Tower

Integrity

Pera Palace

Continuous Growth

Teamwork

Innovation

People Focus

Situation Analysis – Dubai Upscale Lodging Market

Burj Al Arab Qasr Al Sarab Shangri-La Jumeirah Al Qasr Bab Al Shams

Rooms

Location

Amenities

Abu Dhabi Dubai Dubai Just outside DubaiDubai

Suite only accommodation offering discreet check-ins within rooms, private reception on every floor

Colored in subtle earth tones with intricate mosaics, jewel-encrusted accessories.Deluxe Terrace rooms have best views of dunes.

302 guest rooms with deep soaking tubs, rain showers and warm décor with sleek lines and local artwork.

292 guest rooms decorated with classic Arabic flair and private patios, many with perfect ocean views.

113 rooms.Views of the large desert or perfectly landscaped gardens, private sun terraces.

Free-form pool.Spa with floral foot bath, Thai herbal compress massage.Food: Fine middle eastern food at four restaurants.

Optional chauffeur driven Rolls Royce.Personal butlers.Jumeirah Inside – a virtual platform.Food: Caspian caviar, grilled Atlantic lobster.

Curved swimming pool.Fitness center – workout and squash.Food: Shang palace – Cantonese, Marrakech – Moroccan.

Indoor lap pool.Water Sports on the beach.Decadent spa.Kids amusement – Sinbad’s Kids Club and water park fun at Wild Wadi.

Open air dining.Hookah of multiple flavors.Arabian entertainment – belly dancers, henna artists, live music and falcon displays.


Situation Analysis – Seasonality and Luxury Hotel Market

2011 2012 2013 20140

1

2

3

4

5

6

4.3

55.4 5.4

4.1

55.4

3.94.5

4.9

4.14.6

5

Hospitality Sector as a Percentage of GDP

Q1 Q2 Q3 Q4

Perc

enta

ge o

f GDP

Mature

Emergent

Developing

Infancy

USADubai

RiyadhO

man

Mozam

bique

Hospitality Industry Trends in Dubai• Shift from luxury hotels to midscale properties• 50% of new rooms have 3-star or lower rating• High land costs are a barrier to entry to the midscale and

budget markets


RecommendationInternal External

Branding Technology

Partnership Personalize

Promote Perform

Local Global

Elevate Target

Evolve Expand


Recommendation - InternalBranding Technology

The Jumeirah Experience The Jumeirah Application

• Providing unforgettable experience to customers• A more diverse cuisine in restaurants• Customizing locations to the local demographic• Maximize Search Engine Optimization• Maintaining an evolutionary database of guests

with their photos and names. Also, guests experience with staff to be input to the database.

Technology

Jumeirah + Google

• A voice-controlled personalized hotel assistant• Would be available in the customer’s native

language


Reservations

Emergency

Local Tourist Attractions

Hotel Operations

Room Key

TemperatureController

LightController

Multi-MediaController

Shower/BathController

Recommendation - ExternalLocal Global

The Jumeirah Cruise Line Venu – A Jumeirah Experience and Resort

• Providing ‘The Jumeirah Experience’ on a boat• Sail along the Persian Gulf with destinations at

Dubai, Riyadh and Oman• Exclusive to Q3 and Q4 to supplement declined

income• Follows the Burj Al Arab ‘Sail Silhouette’ branding


• Expanding the Venu brand to cover a larger market• Similar service at a lower cost• Venu to include experience like live music, cultural

experiences, recommended technology, etc.• Authentic architecture adapted to the local culture• Venu Inside: 360 degree excellence experience


Recommendation – Country Specific Strategies

China (39% y-o-y growth) India (12% y-o-y growth) KSA/Oman (Developing markets)Singapore (9% y-o-y growth)

Singapore

• Go for an asset-light strategy as uncertainty about Chinese government taking control of foreign property or forcing it to merge with domestic entity.

• Management Contract and Franchise

• Significant mid-high income working population.

• Go for an asset-heavy strategy due to rising real estate prices. Strong institutions ensure a promising market with good protection of property.

• Full Ownership Strategy• Venu can be expanded

here as a large mid-high income working population exists.

• Go for an asset-heavy strategy because these are developing markets for luxury hotels.

• Full Ownership Strategy• Cruise services from

Dubai/Abu Dhabi should be provided during the leaner periods of Q3 and Q4.

• Go for an mixed-asset strategy due to fluctuating real estate prices.

• Mix of Full Ownership and Management Contract/Franchise

• Venu can be expanded here as a large mid-high income working population exists.

Timeline


Y0 Y1 Y2 Y3 Y4 Y5

Venu

Research onMarkets

Hotel Partnership/Ownership

Monitor Progress

Cruise

App

Branding

ChinaIndia + Singapore

ChinaIndia + Singapore

USA + EuropeUAE

China + India + Singapore

Risks and their Mitigation


Cruise

• High investment cost

• New product in a new market

Expansion

• Cultural sensitivity and appropriation

• Finding English speaking staff to serve global clients

Brand Tarnishing

• Different market• Expansion cost• Tarnishing the

Jumeirah brand

• Smart marketing campaigns • Adapting to new

cultures• Recruiting staff

from the English speaking belts of the countries

Fluctuation

• Fluctuations in economic conditions and currency

• Change of government causing lowering of ease of business

• Targeting different customer segments

• Keeping the two brands separate, cultivate separate reputation

• Leveraging KPMG’s experience with currency and commodity hedging

• Expanding to the politically stable provinces of the target countries

MitigationMitigation

Mitigation

Mitigation

• KPMG Tax Professionals guiding Jumeirah in every step to ensure maximum tax benefits are obtained

• KPMG team of tax. risk and management consultants will provide advisory services to ensure Jumeirah’s success

Offerings

Thank you

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