Saudi Egyptian may go it alone after Hyatt Hotels dispute: interview

Bassem Abo El-Abass, Friday 15 Apr 2011

Saudi firm tells Ahram Online of its clash with international hospitality chain over the running of showpiece Nile-front hotel

Grnad Hyatt Hotel in Cairo
Hotel on Nile corniche continues to operate under Hyatt brand name until full settlement is reached

A Saudi tourism giant says it is considering running its central Cairo hotel itself following a bitter dispute with Hyatt Hotels over alleged mismanagement during the revolution.

"We are still in arbitration and the hotel will keep the Hyatt brand name until the settlement of the dispute," a spokesman for the Saudi Egyptian Touristic Development Company, Abdel Aziz Al-Shehail, told Ahram Online.

He said that the firm's five-star hotel on Cairo's Corniche, still operating under the Grand Hyatt brand, may return to self-administration under its former name of the Royal Nile Club.

The suggestion follows rumours that the Marriott and Kempinski groups had shown interest in managing the riverfront hotel, a popular spot for wealthier, more conservative visitors to Egypt's capital.

Hotel owner and management firm have been locked in a dispute for nearly two months, with the Saudi Egyptian Touristic Development Company claiming Hyatt Hotels failed to meet its management responsibilities by allowing vital foreign staff to leave during February's unrest.

The quarrel led to an announcement from Hyatt Hotels in late March that it had terminated its contract with the Saudi hotel owner. The Cairo spokesman for the Saudi firm denies this.

"Hyatt broke contract terms with us -- it was not a termination," said Abdel Aziz Al-Shehail, who explained that the disagreement centred on the conduct of Frederic Boulin, the French general manager who fled Cairo for Sharm El-Sheikh with 12 other foreign employees at the height of Egypt's political upheaval.

Al-Shehail claims the loss of "indispensable staff" crippled the running of the hotel although the remaining Egyptian employees were able to secure the premises.

He says Saudi Egyptian's later attempts to appoint a new manager were blocked by Hyatt Hotels who insisted the French manager keep his post.

"Absolutely, I don't know why they believe in this person," said Al-Shehail.

Grand Hyatt Cairo staff demonstrated in front of the hotel in February and March, chanting and staging sit-ins. The workers’ demands included salary adjustments, profit shares and contractual job security for all those working on a month-to-month basis.

Hyatt Hotels said their management tried to settle the differences between staff and Saudi owners, urging the latter to adopt a more understanding approach to dealing with workers’ complaints.

The Saudi Egyptian spokesman denies Hyatt was involved but says issues with workers have been resolved.

Al-Shehail accuses the hotel management of urging travel agencies and regular clients not to deal with his hotel and criticises Hyatt's operation record as inefficient.

"The maximum occupancy rate was 62 per cent under Hyatt management, much less than when the hotel was under our management and it reached 83 per cent,” said Al-Shehail.

Despite current controversies, Saudi Egyptian is pushing ahead with other projects in Egypt, saying it is encouraged by the country's political change.

"We will raise our investments in Egypt by US$500 million through establishing a new hotel called Al-Ameer in Cairo's Garden City," said Al-Shehail. 

The Saudi Egyptian Touristic Development Company bought the Corniche-front hotel in 1990 and initially managed it under its own Royal Nile Club brand.

Hyatt began managing Grand Hyatt Cairo in August 2003 on a 10-year contract.

The international hospitality firm still provides management services for two Hyatt Regency hotels in Sharm El-Sheikh and Taba Heights.

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