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Heartbreak Hotel: drama in the UAE’s hospitality sector

Heartbreak Hotel: drama in the UAE’s hospitality sector

The broken relationships and the finger-pointing make the hospitality sector sound more like Hollywood. And they say there’s no business like show business…

April 21, 2011 1:41 by

Yesterday, Kipp was going to write about the eyebrow-raising news that Angsana Hotels and Resorts pulled out of managing a luxury hotel in Abu Dhabi.

The reason for the separation? They grew apart, realised they wanted different things and decided to go their separate ways. Very Hollywood, wouldn’t you say?

(If you want the quote Banyan Tree, which manages the Angsana Brand, gave The National here it is. But trust us, it’s not half as good as how we’ve said it and it means exactly the same thing.)

Anyway, partnerships come and go in the business world as much as it does on the red carpet so this story doesn’t really stand out, except that the Singapore-based operator has been having a hard time finding the right partners in the region.

Banyan Tree lost a contract with Meydan due to “various breaches of the hotel management agreement”. The operator also stopped managing a resort in Bahrain because the owner allegedly owed the company more than $1 million.

Then, there are also the dealings it’s had with Damas Hotels which resulted in the ‘Angsana Resort and Spa That Never Was’ in Fujairah and the hotel on Sheikh Zayed Road it closed down when the Damas Dynamic Duo had to raise money to pay back shareholders following some questionable investments (or what Kipp sometimes calls the “Can’t touch this/MC Hammer” syndrome).

So anyway, Kipp was going to go on a rant about how at first you’d think ‘poor Angsana for having a bad run of projects’ and that on a second look perhaps the saying “fool me twice, shame on me” may actually apply better here. And that Angsana should probably look more closely at its internal workings to see if there’s anything going on there to result from such a bad choice of ventures.

But Kipp decided not to do it yesterday, because, well, it could very well be just what it says on the tin: Angsana pulls out of managing the Eastern Mangroves Resort in Abu Dhabi. Case closed. An isolated case that doesn’t really warrant the kind of finger pointing and jeering that Kipp has lovingly made into an art form.

A not-so promising start

But then we heard this morning that the Abu Dhabi National Hotels (ADNH) has jumped the gun announcing that The Grand Canal hotel was going to be managed by the Ritz-Carlton. Now, the Ritz-Carlton Hotel Company is all up in arms about not having signed such a contract with them yet.

Egg-on-the-face? Foot-in-mouth? Take your pick of delicious phrases for this one.

Funny though that it took Ritz-Carlton all this time to make a public protest, especially when ADNH has been promoting the hotel as a Ritz-Carlton property on its website and during exhibitions. What went down here?

And it’s not like ADNH is dreaming up this partnership. The two companies signed a MoU last year.

But then again, Ritz-Carlton said it signed many such arrangements every year and many never become formal management agreements.

So this is the MoU is an agreement to come to a final agreement. You know like a promise ring that celebrities these days give to their partners to signal that they ‘promise’ to give them an engagement ring at an unspecified time later—except of course Ritz-Carlton doesn’t want ADNH to tell anyone about the promise ring.

Was Ritz-Carlton shopping around in case better commitments came into play? Who knows…maybe they just wanted to make sure ADNH was fully committed to building the hotel first. Or maybe it does matter that the project was originally supposed to be a JW Marriott property, a brand owned by the Marriott Group that also owns Ritz-Carlton. How very Hollywood, indeed.

Kipp may be misunderstanding something here but doesn’t a ‘memorandum of understanding’ mean that whoever signed that memo has agreed to whatever deal it is between them and that they are on the same page about the progress of that deal.

What does it say about the hospitality sector that you can’t even trust that people mean what they say and say what they mean on the paper they sign?

Or are these ventures, Angsana and Ritz-Carlton alike, falling apart due to a decline in business within the hospitality sector?…especially that there seems to be more hotel rooms opening up then there are tourists coming into the country.

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