Bp doing business in middle eastDocument Transcript
Table of contents
WHY INVEST IN ABU DHABI?
A dynamic business context turned towards the luxury
A region facing daunting energy challenges
A country with high energy efficiency
An urban green region
MARKETING & SALES
Segmentation, Targeting, Positioning
Establishment of partnerships
MARKET & COMPETITION
Sources of financing
This report aims to outline our desire to create the first 100% environment friendly and luxury
hotel in Abu Dhabi, United Arab Emirates. Our project is called: Hajar Valley Resort. After a
deep analysis of the economic and cultural situation in the UAE, it appeared that it was the
best market to implement such a hotel.
The United Arab Emirates are currently facing energy challenges, and are preparing for the
after-oil-area: their plan for 2030, developed in this following report, shows that they are
trying to have a more sustainable development, and that Abu Dhabi has taken Dubai’s place,
and is became the main economic actor of the region.
Many ecological projects have been initiated, but our project is the first one to provide to our
customers a high quality service without impacts on the environment. By building this hotel,
we do not only want to offer our customer a service, but also a unique experience: living with
high quality comfort and in fellowship with the environment.
The details concerning the target are given in the report, but we are mainly targeting tourists
with high income, who want to experience a new concept.
Our hiring plan consists in involving the local population, in disregard of their origin. However,
we will be really uncompromising on the competences and the experience, since we want to
provide a high quality service to our customers.
Our implementation schedule is developed through 3 different periods of time: the short term
is mainly about the opening of the Hajar Valley Resort, while the long term schedule involves
the expansion of our service through the country.
We are expecting a constant growth of our profit upon the opening. We believe that
this project is going to be a success, and could deliver high value for any stakeholder who
Why invest in Abu Dhabi?
A dynamic business context turned towards luxury
Abu Dhabi is the capital of the United Arab Emirates. With Dubaï, it is the most developed
emirate, and for few years, Dubaï is in the shadow of Abu Dhabi. The United Arab Emirates
have a GDP of $360 billion, and Abu Dhabi is responsible for 60% of the GDP. Also, it is a
region which has been barely affected by the financial crisis of 2008: thereby their growth
rate remains positive and is about 4% in 2013, as the table below shows.1
The region is known to be the capital of the luxury, and even extravagance. To prepare
the after-oil-area, Abu Dhabi rationally develops its economy by focusing on the cultural and
More than anywhere else, the Gulf is the temple of the luxury hotels. However, even if the
UAE are leaning towards modernity, they don’t forget their tradition and they are mixing both
A region facing daunting energy challenges
When it comes to sustainable development, Middle East is far from being the best
candidate. Actually, it is the country with one of the worst footprint in the world. The region
hosts the biggest hotels, they built islands representing the World in Dubaï, and they even
built a ski slope in the desert. Everything is conducive to the extravagance. However this
extravagance is also responsible of the crisis Dubaï went through in 2009. At this time, Abu
Dhabi had to buy back the debts of its neighbor and several projects have been stopped (e.g
Since this period, Abu Dhabi is back on stage and turns its development towards the culture,
the luxury and the sustainable development. The Emirate understood that the future of the
region requires the development of green energies, in order not to be in the same situation
as Dubaï which has to face problems because of their fast development the last few years.
Indeed, by 2030, the population of Abu Dhabi will increase by 3 (from 1 million to 3 million
The table below sums up the 2030 Plan of Abu Dhabi2
A region with high energy efficiency
Abu Dhabi is a region with high energy efficiency, not only thanks to the oil business
but also in the green energies sector. Abu Dhabi uses already wind energy, and tends to
develop the construction of buildings using green energies.
Moreover, Abu Dhabi wants to become the capital of the sustainable development by 2030
through its plan. Their plan is to create buildings with high green energy performance
standards. Today, the energy is responsible of the income by 60% and the rest by 40%. Abu
Dhabi wants to turn the tide and develops the tourism and services sectors
The Emirate of
Abu Dhabi is going
through an obvious
urban green trend.
coming from local
transformed the city.
and gardens such
as the Khalifa Park
are very present in
The Abu Dhabi 2030 urban plan is a continued fulfillment of the grand design envisaged by
the late Sheikh Zayed bin Sultan Al Nahyan aimed toward the ongoing evolution of Abu
Dhabi as a global capital city.
As part the “Abu Dhabi 2030” urban plan, with ten policy statements, it specifies land uses,
building heights and transportation plans for the entire area of the Emirate. However, this
plan is focused on the rehabilitation of the district A & B. With the financial zone moved
deeper into the land, those districts are going to play a main role in the city’s development.
Therefore, getting around the city without using a car has become easier. Since 2008 there
has been an important increase in the number of public buses. Cheap fares make it a
reasonable option for environmentally conscious travelers. In addition, traveling to other
destinations within the emirate can be done conveniently by bus.
Green buildings, green streets, desert landscaping, renewable energy
Community facilities, Residential, Parks, Villas, Town houses
Quality of life at work, Diverse Economy
Pedestrian and Water connections, Metro, Tram, Water Taxis
Our concept is to implement in Abu Dhabi a 100% green and environment friendly hotel.
Also, our hotel will be 5 stars since we are going in a region where the luxury is predominant.
It will offer 26 rooms including 10 suites from 40 to 90 square meters, with a unique view on
the desert. This kind of building doesn’t exist yet in the region, even if the concept of green
building is already present.
Our hotel will be entirely respectful of the environment, from its conception to its daily
use. It will be built with sustainable materials such as wood and biological painting.
In order to be energetically independent, we have decided to install solar panels on the
entire roof. In an ecological and a respectful approach to the environment we also want to
take advantage of the natural landscape. The concept is not only to build the hotel in an
ecological way but first of all to create a direct connection between the man and the nature
and provide to our customers a unique experience. Our hotel will be built at the edge of the
desert. Thus, our guests can enjoy the beauty of the landscape and feel in a totally different
world during their stay. The hotel will offer many facilities in order to satisfy our customers,
and all of them will be eco-responsible. For instance, the swimming pool will be heated by
solar energy; our beauty center will provide bio cosmetics only, while a reinforced insulation
and ventilation avoid the use of air conditioning.
Differentiation from competition
We are going to differentiate ourselves from the competition by promoting the ethical aspect
of our project. We will base our service on The Abu Dhabi Tourism Authority (ADTA), which
manages the emirate’s tourism businesses. It has stated that green resorts will be integrated
into the classification program. According to the authority, the pilot scheme, mainly based on
the Estimada will be finished by the middle of next year. The emirate of Abu Dhabi has
piloted its green hotel recommendations across 4 properties, including The Hajar Valley
Resort. This will give our hotel another official certification that can support future
Some studies have shown that higher benefits are gained when hotels integrate
sustainability in some parts of their functioning. However, it is still extremely rare that a hotel
has its entire operating based on green energies. This is what we aim to achieve with this
resort, this will allow us to gain competitive advantage and be a leader in the sector. The
hotel industry has been pursuing green practices since the 1990s but “going green” has been
very fashionable for the past years. Many companies integrate sustainable aspects in their
business but a few of those corporations do it genuinely.
A unique concept
The resort will be located in the Emirate’s desert at the edge of the Hajar Mountains. Even if
the hotel will voluntarily be surrounded by anything but modern civilization, Abu Dhabi is only
one and a half hour away, and the international airport of Al Ain can be used in case of
In this exceptional environment we decided
to fulfill a dream the most prestigious
architects have. A dream where desert sand
meets desert stone, without any difficulties
the resort becomes one with the
environment, living in the way that we should
all live. A beautiful, primitive, powerful yet
humble and luxurious project that seeks to
establish a new benchmark for sustainability
design and quality in the natural
environment. Our architects were guided by
the native materials formations and built extensions that could have been there for centuries.
The concept’s point of departure took roots in the geological history of the region. Even if it
was challenging, we took into account the natural faults and fissures, the building is inserted
in the landscape with such a nominal impact that if could easily get mixed up with the natural
topography. The demarcations between man-made and initial natural sculptures, interior and
exterior are deliberately blurred to establishing maximum effect with minimum nature
The lodges are nestled across the landscape, enhancing rather than distorting an awareness
of the environment. We created an new approach to living with the land and not simply upon
the land. Our guest will rediscover to use their senses. Indeed, they will learn how to see,
hear, touch, taste, and smell. The beauty of the building is achieved through an
understanding of the nature’s flow, light and orientation, every aspect of the surrounding
desert’s topography has been taken into account. The lodges and villas have various
incarnations; rock lodge, spa lodge, tent lodge and reserve villa are all designed as spatial
responses towards establishing a connection, not dislocation with the inspiring planet we
The resort merges in a silent way within its setting; it
exploits and enhances the natural beauty of the desert at
the same time, where accommodations uniquely luxurious
are being built.
Dramatically situated, the lodges are all about a strong
connection to the local culture. The resulting experience is a
revolutionary notion of opulence that is reduced to what is
essential. Some might say this resort is leading the fancy
The structures of the lodges are carved into the sandstone cliffs, using the existing
geometries of the rock to create shapes and forms. Other structures are made of cement
mixed with the local red sand.
Sustainability is omnipresent throughout this project’s life cycle. We provided thoughtful
planning to innovate and create opportunities for energy and resource conservation.
Therefore, the resort will up-cycle (as opposed to re-cycle), waste, and healthy building
initiatives. Our goal is to create a place where ecology and sustainability are set for a guiltfree luxury, not a self-denial one. Moreover, the project will synergize with the environment.
We have processes that consist in harvesting the power of earth, wind, and sun in a discrete
yet efficient way.
The interior design of the resort will keep our guests cool without using any VLC. Indeed,
passive means of cross ventilation, the natural cooling effect of the rocks, and proper siting
allow the project to minimize energy consumption and maximize healthy living. Those
designs take roots in the local architectural heritage. Layouts that have been abandoned for
pollutant solutions in the peninsula cities, but are being rediscovered with the Masdar city.
Great care has been given to using local materials as well as various water conservation
measures for both human and site irrigation.
We established a relatively closed system of harvesting rainwater in subterranean cisterns
through a living machine of biological nature. All systems and services will be completely
integral to the design.
Market & Competition
Abu Dhabi has now a dominant position in the Emirates, since 2009 and the
repurchase of Dubaï’s debt, up to $10 billion, and also the renaming of the Burj Khalifa
Being the capital of the UAE, it is in Abu Dhabi that the most important political
decisions are taken, and this decade is seen by some people as the ‘Abu Dhabi’s decade’, in
contrast to the last decade belonging to Dubaï.
The monetary politic is also very attractive. Indeed, there is no tax on the profits of the
companies. Plus, customs are limited at 5% and many products and raw materials are
As mentioned in the first part of this business plan, Abu Dhabi is responsible by 60%
of the United Arab Emirates GDP (about $360 billion). The Emirate is part of the second
richest country of the region, just behind Qatar.
based on oil
economy is not
UAE are facing
and luxury products/services. However, while Dubaï was more in the greatness and
extravagance, Abu Dhabi is more in the mastered and sustainable development.
The culture of the Emirate is known to be a mix of new and old, highly influenced by
international trends but with its cultural core still being traditional. Indeed, since the
population is rooted in Arabia’s Islamic traditions, there is a strong commitment to local
heritage. In the Emirates and throughout the whole peninsula, Islam is more than a religion;
it’s a way of life
It is important to understand the dress codes of the local population. Indeed, Sheikhs and
important businessmen may wear a thin, gold-trimmed robe over their kandura at important
Whereas locals wear the National Dress, foreigners are free to practice their own religion and
the dress code is liberal. In public, women wear a long, loose black robe (abaya) that covers
Photography can be a delicate issue in Abu Dhabi.
In fact, while normal tourist photography is
tolerable, it is polite to ask permission before taking
photos of people. Photographs of government
buildings, military installations and ports and
airports should not be taken. Also, cameras may be
banned in certain public areas.
On the demographic side, as in most Middle
Eastern countries, the youth represents a big part of
the population. In fact, the Emiratis that have more
than 50 years old represent only 1% of the country’s population.
Age structure in UAE (2005)4
The consumer’s view on such a resort that only depends on green energies in its functioning
process is something to take into account. The main targets of the group mostly are
foreigners, expats and tourists. It is known that ecotourism has been increasing considerably
for the past decades, and the Emirates position on this trend has always been a leading
As a matter of fact, the emirate commander has funded the creation of a sustainable city
called Masdar, which will be the leading example for future eco cities. Moreover, he is leading
the Sheikh Khalifa Medical City in Abu Dhabi that is slated to begin construction in 2013 and
will provide advanced medical care in the heart of the city. Envisioned as a sustainable city
within a city, the new hospital will feature strategies to cope with the intense desert climate.
Such project shows that the president is positively promoting sustainable initiatives.
Therefore, even if the local Emiratis which represent are not our main target, they still are
sensitive to climate change issues and must support actions to prevent
Concerning the tourism, the graph below is showing the constant increase number of visitors
as well as the average length of days and the total revenue generated
In order to encourage support and supervise the development of Science, Technology and
Innovation (STI) the Emirate of Abu Dhabi created in 2009 the Abu Dhabi Technology
The Technology Development Committee (TDC) is quite innovative, since it mainly aims
human capital in its development strategy. The TDC’s function is to support the development
of a vibrant Science and Technology sector in the Emirate. It aims to do so through the
development and implementation of policies, strategies, and projects in priority areas.
Also, the Abu Dhabi Investment Authority (ADIA), which is a sovereign wealth fund,
represents one of the world’s largest amount of capital.
Abu Dhabi’s sovereignty uses its technology to develop sustainable projects. In fact, rating
systems are commonly used by corporations to estimate how “green” their plans are. In the
Middle East, as part of Abu Dhabi’s 2030 plan, the city has created a rating system named
Estidama (which means
arabic). This system is
now popular in the
Emirate, a project such
Medical center is rated
two pearls on the
Pearl Rating System.
Our value added
is that we are the
only one in the market to be 100 % ecological. However, as previously mentioned, more and
more ecological buildings are being built. One of our main competitors is not only a hotel, but
a whole Island, called Sir Bani Yas Island. This island shelters a 5 stars hotel dedicated to
Abu Dhabi has also the ambition to build the first entire city with no carbon emission
at all, with
is to build a
a comfort of
Those are the
the vision of
Masdar City:“One of the most sustainable communities on the planet, Masdar City is an
emerging cleantech cluster that offers a creative and entrepreneurial atmosphere where
businesses can thrive and innovation can flourish, in part because the city itself serves as a
model of what green urban development can be. This is especially the case because Masdar
City is being designed and operated to provide the highest quality of life with the lowest
environmental footprint – all in a manner that is commercially viable.”
The fact is that the competition is not already implemented in the market. However, it
is coming with many projects which tend to build an Eco responsible environment. Those
projects are not a big threat for our company since they are completely new and not already
“Currently in third year of NEOMA Business School, I have decided to start my own business.
I had a previous experience in the hostelry and this is a field that is really interesting and
challenging to me. I used to live for 2 years in Abu Dhabi when I was younger, and, as they
are completely redefining the development of the city, I saw a real opportunity to develop a
Moreover, I am really sensitive to the environment, because I believe that we have to change
our way of consumption since the world is changing. My collaboration with Illiès Boussaha is
going to be successful;
we have the same
vision of this project and
Anantara Desert Island Resort & Spa
“While I’m still finishing
my degree in International
wanted to start my own
discussing with Marianne
about the lack of ethics
in today’s businesses, we figured out that we could launch a project in accordance with the
environment. The choice of the Arabian Peninsula was offered by Marianne, since she had
lived there and experienced the emergence of the local environmental awareness. Thanks to
my Algerian cultural background, this region in the Middle East attracts me even more.
Designing and building this resort fulfilled years of work, we are extremely proud of this
unique concept and believe it will inspire many designers all around the globe.”
As the head of the hotel, we are going to employ a local Butler. We have decided to employ
and Emirati as the responsible of the employees in order to have a better understanding of
the culture and way of working. We have already received many applications. Our criterions
are really high: we want an experienced man in the luxury hotel field, with references.
Another criterion that is important for us is the spirit of our butler. As we are really positioning
our hotel in the environmental friendly field, we want our management to be ethical and
dutiful to the environment. This criterion will be really important during the applicant’s
The domestic’s team will be composed by 10 persons.
For our cooking team, we have decided to choose a chef who has a natural and bio cuisine.
We did not find him yet, but we are currently looking for him and meeting different Chefs in
To finish with our hierarchy, we are going to hire 3 persons for our Spa: one will be the
manager, and the other will be both beautician and masseuse.
MARKETING & SALES
Segmentation, Targeting, Positioning
In order for our project to be coherent, we are building a segmentation analysis. First off, we
will identify the basis for segmenting markets and develop profiles for resulting segments.
That will allow us to develop measures of segment attractiveness, and therefore precisely
target our consumers.
We may need to differentiate our service in order to have a superior value, then we will
positioned ourselves on the Emirate's market. This segmentation will be divided in consumer
markets, business markets and international markets.
We do not have any limits in terms of geographics. Indeed, we target consumers from
all around the world. Our guests may come from any regions, large cities or rural areas, the
climate can vary as well since tourists are often looking for a change of sceneries.
Now let us divide customers into groups based on age, income, ethnicity, gender, family size
and type of family. Researches have shown that individuals in their 30’s are the one
developing the higher environmental awareness. Since we aim to create a luxurious resort,
the income of our guests must be consequent, so they can pay our suites expensive rates
and afford the leisure activities
Head of the Hotel
The ethnicity factor does
however it is known that the
sensitized to climate change
the past decade.
family details do not
as well as large
not really counts as a major factor;
occidental population has been
throughout movies and medias for
Moreover, the gender and
come into account when
segmentation analysis. In
targeting single individuals
families, our resort and the services we offer
made in a way that can satisfy a
backpacker or a family on holidays.
Regarding the lifestyle segmentation,
we are looking for guests who are familiar with outdoor activities. Therefore, those individuals
may be into sports or any type of outdoor activities, and have knowledge about natural
landscapes. Also, they may have the ambition to know more about the fauna and flora of the
Emirate’s area, especially the desert where the resort is located.
So to attract travelers, we are asking ourselves who our hotel guests are and why
they will want stay with us. What are they going to like about our hotel? Once we understand
our customers and their personal needs and requirements we can create niche target
Once the niche target markets have been defined for our hotel we are going to create
sections on our hotel web site for them. We need to particularly focus on the parts of the
marketing mix that appeal them. We are also planning on building packages and special offer
in order to attract to niche target and stimulate their wants.
Evaluating market segments
The size of our main segment is relatively large. Indeed, this segment integrates single
individuals as well as every type of family, the only restrictions being the financial aspect and
ecological awareness. With this new innovative resort, which is one of the first of its kind, we
believe that our structural attractiveness will be high. However, we need to consider the effect
of competitors and substitute services. The company’s resources are anchored in the breath
taking sceneries where the resort is implemented. Also, the high quality of our building and
staff presentations will play a major role towards the consumer’s satisfaction.
Establishment of partnerships
Since we are planning to open our hotel at the beginning of 2015, we want to take
advantage of the opening of the Musée du Louvre in Abu Dhabi, on the island of Saadiyat 5.
This project is part of a huge cultural district, where are building three other museums and a
performing art center. This is a great opportunity for us. Indeed, this opening will draw many
tourists into the region. That is why we are currently negotiating a partnership with the Musée
du Louvre. The idea is to promote our hotel around the museum: the visitors will be the first
one to have access at our revolutionary concept. Thus, we will offer them a special pack
which will allow them to enjoy both the museum and the hotel for a special price.
The second partnership we want to develop is actually with one of our competitors:
Masdar City.6 We believe that this competitor can become strength for us. As developed
beforehand, Masdar aims to be one completely environment friendly city, turned towards
business. This city is going to attract many professional and scientists. This is a real
opportunity, given the fact that Masdar city is an ecological city, and our hotel aims to achieve
the same goal.The visitors and professional will be more likely to stay in a green hotel, after
having spent the day in a green city.
We have designed this following implementation schedule, beginning in 2014, for the
construction of our hotel.7
Short Term (2014)
Middle Term (2015-2017)
Establishment of retro
Opening of the hotel:
beginning of 2015
Decision control and
monitoring the delivery.
50% occupancy by 2015
70% occupancy by 2016
Complete layout of the hotel
80% occupancy by 2017
Computer equipment of the
Operational equipment of the
Long Term (after 2017)
Expand our hotel if the
objectives of occupancy are
-30new rooms by 2020
Referencing on the central
Musée du Louvre- Abu Dhabi
Insertion in the guides and
Implementation of the website
Implementation of outsourcing
contracts (cleaning company,
Training of the employees
Develop new partnerships
through the “Plan 2030”.
Hiring 5 new employees
Masdar City - Abu Dhabi
The following data are assumptions since we do not have real since we do not have
the real information about the costs.
In order to be more accurate, all the data will be given in Euros instead of UAE
Our price will fluctuate according the seasons. However, the range of prices it pretty
high (from 110€ per night in a basic 2 persons room to 350€ per night for the largest suite).
The average price is about 160€, all rooms combined.
2015 revenue= 26 rooms*50% occupancy*160€*365 days=759 200€
2016 revenue=26 rooms*70% occupancy*160€*365 days=1 062 880€
2017 revenue=26 rooms*80% occupancy*160€*365 days=1 214 720€
Added to that revenue, all the extras (extra food – extra services such as Spa,etc.).
The medium wage per year in UAE is about 18 500€ (1540€ per month) but it does not exist
any minimum wage. The table below shows how we have decided to pay our employees.
4500 € per month
1800€ per month / person
2000€ per month (Chef) and 1800€ per
1800€ per month/ person