AJMAN // Hotels in Ajman have until Sunday to apply for classification in the emirate’s first official ratings system.
Until now hotels were licensed by the municipality, which assessed them based on building rules, rather than standards such as amenities, room sizes, disabled access, furniture quality and extras such as health clubs.
But when the Ajman Government set up its Tourism Development Department last year, one of its first moves was to draw up a rating system to give tourists a clearer idea of what its hotels had to offer.
The classification system is based on the one used in Abu Dhabi since 2009.
After Sunday, hotels will have between six and 12 months to meet the new standards.
“Existing hotels will have to make some changes,” said Mounir Attia, the authority’s head of hotel classifications. “For example, right now there are no disabled access rooms in Ajman and that will have to change.”
Sheikha Al Nuaimi, director of tourism development and marketing, said the hotels had all been positive about the changes and eager to meet the new standards.
“Closing down is not an option,” Ms Al Nuaimi said. “We won’t let them go out of business. We will try to help them make it through this criteria in the time frame.”
She said Sheikh Ammar bin Humaid Al Nuaimi, the Crown Prince of Ajman, had explained that some hotels might need to close temporarily to make the necessary changes, rather than shut permanently.
Ms Attia said that so far, “hotels have been making sure they meet every criteria”.
Next year a Fairmont hotel is due to open in Ajman, although Sultan Al Nuaimi, the acting director of tourism licensing and standards, said it was not only big brands that were welcome in the emirate as it developed.
“You can’t say a private company based in the UAE can’t open here,” Mr Al Nuaimi said. “Whoever is compliant with our standards can apply, although of course, it is good for us to have the big brands as well.”
The Ajman Kempinski on the Corniche, which opened 15 years ago, was the first 5-star hotel to open in the emirate, and remains its biggest name. It was the chain’s first hotel in the UAE.
Ulrich Eckhardt, the Middle East and Africa president for Kempinski, has lived in Ajman and watched the hotel grow over the years.
“I think the classification system is good, so as not to mislead the customers from a pricing point of view,” Mr Eckhardt said.
He admitted, however, there could be a confusing amount of variation, even between hotels classed as “5 star”.
Despite looming competition from hotels such as the Fairmont, Mr Eckhardt welcomed the lift it would bring to tourism as a whole.
“More hotels will really mean Ajman is getting on the map. It is refreshing. Yes, the Kempinski will feel the opening of the hotels but it will lift the overall quality.”
However, the key to Ajman’s development will not be its hotels but its attractions, said Ms Al Nuaimi. “People only come to a destination for its attractions, and then they choose their hotel,” she said.
Renovation of the Ajman Museum, a former fort, and highlighting attractions such as the Ajman Stud and the camel racecourse are part of the emirate’s bid to enhance its attractions.
Ajman is also planning to develop adventure tourism in its more remote areas, such as Manama and Masfout near the Oman border, where the mountainous terrain and caves make it suitable for a different kind of tourism, and an even broader audience.
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More on animal trafficking
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
