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  • 1. ––––– Table of contents EXECUTIVE SUMMARY 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
  • 2.  An urban green region THE SERVICE  Features  Target MANAGEMENT TEAM MARKETING & SALES  Segmentation, Targeting, Positioning  Establishment of partnerships MARKET & COMPETITION  PEST Analysis  Competition IMPLEMENTATION SCHEDULE FINANCE  Financial statement  Sources of financing
  • 3. Executive Summary 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 will participate.
  • 4. 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 luxury sectors. 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 styles.  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 Palm Islands). 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 inhabitants. 1 http://themanagmentguru.blogspot.fr/2011/01/pest-analysis-of-mice-industry-in.html http://www.studymode.com/essays/Abu-Dhabi-Police-Pestel-Analysis-984723.html
  • 5. 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  An urban green region The Emirate of Abu Dhabi is going through an obvious urban green trend. Sustainable constructions coming from local and foreign investment have transformed the city. Nowadays, parks and gardens such as the Khalifa Park are very present in the landscape. 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. 2 http://www.youtube.com/watch?v=Yz-hguqZCKg
  • 6. Green Green buildings, green streets, desert landscaping, renewable energy Live Community facilities, Residential, Parks, Villas, Town houses Work Quality of life at work, Diverse Economy Connect Pedestrian and Water connections, Metro, Tram, Water Taxis The service  Features 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 communication campaigns.
  • 7. 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 emergency. 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. Sustainable Design 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 deterioration. 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 inhabit.
  • 8. 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 minimalism movement. 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.
  • 9. 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  PEST Analysis  Political: 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 Tower. 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 exempted.3  Economical: 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. 3https://www.google.fr/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CDAQFjAA&url=http%3A%2F%2F www.britishcouncil.org%2Ffr%2Feumd-uae-meetings-marketupdate.ppt&ei=9uRzUpS_OIfX0QWqiIB4&usg=AFQjCNE8hEDqiTIGSNxszRliDHs0Gg_2Qw
  • 10. Contrary to the based on oil Actually, the the the “aftertend to economy common belief, economy is not anymore. UAE are facing challenge of oil-area”, and diversify their with new technologies and luxury products/services. However, while Dubaï was more in the greatness and extravagance, Abu Dhabi is more in the mastered and sustainable development.  Social : 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 events. 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 their clothes. 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 4 http://www.ats-sea.agr.gc.ca/afr/5661-fra.htm
  • 11. 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 factor. 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  Technological 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 Development Committee. 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.
  • 12. 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 sustainable in arabic). This system is now popular in the Emirate, a project such as the Khalifa Medical center is rated two pearls on the Pearl Rating System.  Competition 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 the ecotourism. Abu Dhabi has also the ambition to build the first entire city with no carbon emission at all, with Masdar City. The objective is to build a city without cars, with revolutionary pedestrian infrastructure, a comfort of living turned towards the environment. Those are the foundations of the future green community within the Emirate of Abu Dhabi. Here is 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
  • 13. 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 implemented. MANAGEMENT TEAM  Headquarters Marianne Dupard “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 new project.” 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 have complementary skills.” Illiès Boussaha Anantara Desert Island Resort & Spa “While I’m still finishing my degree in International Business at NEOMA Business School I wanted to start my own business. After 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.”
  • 14.  Global Hierarchy 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 interviews. 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 several countries. 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.
  • 15. 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. Consumer 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 we offer. 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 Emirati Butler building this fact, we are as well as large are not really counts as a major factor; occidental population has been throughout movies and medias for Moreover, the gender and come into account when Cooking Team 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. Domestics Spa Spa Team employees 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 markets.
  • 16. 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. 5 http://louvreabudhabi.ae/fr/pages/home.aspx
  • 17. 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. 6https://www.google.fr/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CDEQFjAA&url=http%3A%2F %2Fmasdarcity.ae%2F&ei=_VKGUrr8NOGN0AW5_4HwAw&usg=AFQjCNGKZ0Zm0ocYCtTgVuCipMCh3fCzow
  • 18. Implementation Schedule 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: planning work. beginning of 2015 Decision control and monitoring the delivery. Objective: Implementation and 50% occupancy by 2015 monitoring work 70% occupancy by 2016 Complete layout of the hotel 80% occupancy by 2017 Computer equipment of the hotel Operational equipment of the hotel Long Term (after 2017) Expand our hotel if the objectives of occupancy are reached: -30new rooms by 2020 Referencing on the central Musée du Louvre- Abu Dhabi reservation hotel Insertion in the guides and directories Implementation of the website Implementation of outsourcing contracts (cleaning company, etc.) Training of the employees Develop new partnerships through the “Plan 2030”. Hiring 5 new employees (domestics). Masdar City - Abu Dhabi 7 http://www.pack-presta.net/creation-de-concept-de-restauration/creer-votre-hotel/les-etapes-de-creation-d-un-hotel
  • 19. Finance Note: · 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 Dirham. Revenues: 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.). Growth rates: Wages: 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. Butler 4500 € per month Domestic Team 1800€ per month / person Cooking Team 2000€ per month (Chef) and 1800€ per employee Spa Team 1800€ per month/ person