Destination Gulf: The Transformational Power of Tourism
So. Manfredi, let's start with you because you have a long history in the region, in the Middle East region. You're based, I believe, in Monaco. Yes.
You have operations within the Middle East and you've traveled there extensively as a as, as a younger man. So tell me how you've seen the opportunities for hospitality and tourism change in that time span that you've been visiting in the Middle East and the JCC particularly? I started going to the Middle East when I was 18. So long time ago. My father had business there. I did my personal first business as a young man in the Middle East in supplying pipes to Aramco.
And I've been trying to get a lot, so I've seen most of it. I've seen Saudi Arabia as it was 50 years ago. I've been to Yemen. I've been to Dubai at the beginning of
the Darby the Oman many times also. And I've always admired the culture of the Middle East. What I love about it is its authenticity. So I disagree with somebody said it's becoming anglicised. No, I love that the Middle East is authentic, authentic in the personality of the people.
And you see how proudly they wear their own traditional clothes and and how they have human relations. When you have a bonding in the Middle East, it's a bonding for life. So it's really it's a different world, but a beautiful world. And it's not only a beautiful world for the people. It's a beautiful world for many things
which are there. And if you look at it from the panorama of how it was and how it is now, it was a country with beautiful historical sites, nature and so on. And now it is a place where you go from Dubai, which is from a European point of view, Miami, because it's lively for Vegas entertainment fun. You have Abu Dhabi and Qatar with beautiful museums. You have Oman, of course, with
historical sites from Salalah to Muscat and the desert then of the region. And Saudi Arabia recently have been all over Saudi Arabia. The minister of culture was so kind to allow me to visit with helicopters and everything.
And we went from the north of the the desert, which is called mill area, right along all along the coast to the free bays Armada. And then by helicopter, we arrived at Alula, which was a breathtaking arrival there. I went to Jeddah, which of course, I knew 50 years ago. And they've changed some for the worse because a lot had been demolished and those been rebuilt.
And Richard, when I went there the first time, it was 150,000 people. Now, I don't know how many billions, seven and a half million. So it's amazing. But the variety, I think, is it's a fantastic place culture, tradition, food, hospitality, natural beauties, historical sites, new developments. The most beautiful architecture now is
not Chicago anymore. It used to be Chicago, Now it's Qatar or Abu Dhabi or Dubai, and it's going to be also Saudi Arabia. Right. So it's it's a great perspective.
I am very enthusiastic about the region. We, as I mentioned, we are discussing we have a destination management company which handles people who go to visited. We want to build camps for the moment in Saudi Arabia, we are looking at other things. I charter to the Kingdom of Saudi Arabia, the cruise ship to start operating the Red Sea is cruising.
What's the success? Is that through Crystal it was silversea at the time. Okay. So was he was the only company which did not stop going to the Middle East after the towers. September 11th. We continue. We are persistent. We support destinations and we are not there only to take advantage where there always know it was a super sea I chose of the ship. It was a great success. They discovered that the Saudi population likes to take vacations in Saudi and get to know the beautiful places that are in their country. Juliet, give us a sort of macro
perspective on the Middle East and the GCC sea. Where do you see the development of tourism and how do you see the development of tourism and hospitality in the last five years and where do you see it going? Thank thanks very much for inviting me and well done to Oman for sponsoring this. It's a Oman's a wonderful country and I've been there a few times. So the big picture on travel and tourism, it's we work with Oxford Economics. We represent world travel and tourism. We've got about 200 CEOs. One of them is Manfredi, who is our member.
And we've been for about 30 years. We've been looking at what is the economic impact and value we now do on sustainability as well to travel and tourism. So the big thing to say is that before the pandemic, travel and tourism was growing constantly for nine consecutive years, then we lost 50% of our value. And now over the next ten years, we are
predicted to grow at double the rate of GDP. So it is a really massive growth sector. And the way to look at it is to say that one in 10 billion that's created on this planet come from travel and tourism, and one in ten jobs that are created on this planet come from travel and tourism. And there are also jobs that are, we call sort of direct entry jobs.
And we can talk later about the impact of AI. But one of the things is, as Manfredi was saying about authenticity, the great thing about travel and tourism and jobs is you might be able to do a lot of the the planning, the searching, the looking, the inspiration, the booking. But people want authenticity. And the Middle East provides that as as Manfredi was saying. So the numbers are looking very good. And if you look at Middle East, we are talking about a business that's a contribution to their GDP that's worth about $450 billion. And we're expecting that to grow to about $600 billion over the next ten years. So it's it's it's got a lot of
opportunities. So what are some of the challenges, though, to getting more tourists, to more travelers to to to the Middle East that your members tell you about? Yeah. So I think one of the things that Middle East are very good at and they've got much, much better at, is things like what stops people travelling.
One thinks of visas, you know, so the Middle East, Dubai's very, very easy as you know, you can get a visa like that. Saudi Arabia is just a no mind of introduce new visa systems. So that is the first thing. The second is you need to feel safe and secure and those countries feel very, very safe and secure. You need those two things. Then you've got to have the infrastructure.
So I think in in fact, at the minute, the Middle East is growing faster than a lot of other areas in the world. And it's because some of those things I don't know if any of you the transmitter that transferred through Dubai, it's been absolutely incredible. It's an average 13 minute experience, which for some of us have had no such good experience in other parts of the world. Right. And it's gone completely biometric. So there's none of this fingers I'm
telling of all the ministers. I was at the G20 and I told ministers, get rid of these digital things. You know, lots of people got rid of it after the pandemic because people didn't want to put their fingers on things. But it's all going to be biometric. We've got to you know, we've got great member like vision box that just brings in all those. So you should really just be able to walk through and it should all be biometric. And I think the Saudis that were having
a mix are now thinking of also going entirely biometric. The other what are the other challenges? Inflation. But inflation impacts on all of us, all sectors, the other challenges, sustainability. And it was very interesting talking about AI, because often airlines, which basically provide our lift, they are they you know, they support our sector absolutely entirely and are part of our sector. And they've often been held up as a sort
of the pin up boys of, you know, destroying the world in terms of sustainability. But the reality is I now and all the searches we're doing in terms of carbon intensity is it is greater. All our use of it with all those great big data centres around the world that need to be cooled, then it is flying on an aeroplane. Now that is not to shame. One sector against another sector is just to try and put it in context. And I was very pleased to hear about Aramco because we were talking to Aramco and the big oil producers to please produce a degree.
Of sustainable aviation fuel. That is the fastest way the airlines are going to be able to decarbonize at the minute, but it's not within the airline's control. It is the energy producers, the big oil producers, and it's governments to ensure that governments give the right fiscal support to airlines to be able to and to to energy producers to produce safe and safe is really important. We only producing 0.05% of what we need. We use every molecule of wind at the moment, but it's a big we did the G20, a big shout out to governments to really prioritize SAF production.
The Americans are the Americans in their Inflation Reduction Act. I can never quite get my head around that the name of that act, but they are prioritizing and there's a lot of investment opportunities and a lot of jobs in SAFF, so it's a good thing to do all round. So Marloes, you're one of those providers on the ground and your company and has an ESG focus. How, why, why does it have any energy
focus? Why did you, why have you implemented that as a, as a kind of founding principle? And how does that play out in your operations as you're expanding into the Middle East? As I understand it, I tell you, so we're a lifestyle operating company. We have hotels, brand residences, service departments across the board. We actually started in the JCC for a very simple reason when we started eight years ago, and we did just a bit of research, 67% of the generation was below 35. And to change and implement lifestyle to kind of philosophy that you need to have the big boxes, the, you know, the good old brands that we all know. It's really hard in the European markets for pension funds are quite strict where rules and regulations on zoning are quite strict to get projects in that combine long stays and short stays that combine working components that look beyond the walls of the building that you just talked about, you know, the heritage we're operating Al-balad and in Jeddah, we're operating Dato Tura in Alula. But at the same time, we're operating a former film camp that was converted into something historic.
But when we built a company, one of the things that was always important, and that's part of our DNA, is that we include wherever we are. So we're inclusive, not exclusive. We go by brand guidelines, not brand standards, which allow us to go into a market, go into a place and say, who's there, what's there, what can we use, who can we work with? Which comes to the social part of ESG, which has been. What we do. We only started talking about it for the last two years because it became such a hot topic.
And why? One, because of COVID and the green part of ESG, Right. The sustainability piece all of a sudden started to to to fly off the social piece is something that's so hard. It's so hard to quantify. It's so hard to quantify.
It's so hard to measure, It's so hard to report on. And common sense is not always what we use. All right. So. One of the things that we could see with our teams was and definitely in the JCC, you know, if I my head ESG is 23 years old from the Bahamas, but a German dad lives in Germany. So she's two sides of the brain, right. One of the reasons part of my team and to us here is 2324 heading up business development for for Europe.
One of the reasons I brought these people into the team and not, as you know, make it coffee or your my assistant or but to lead is because to them is a necessity in life. But buying a water filter in the supermarket at €1.5 is not a commodity which we see most of the time. The salary scales are still very different. The way that we recruit people still very different and we're growing. That's out so much that we said, one, we give our ESG program a name, so we called it Ubu United Building a Better Universe.
It has a butterfly, so it's cute, approachable, understandable, because the moment you say ESG, it's very strategic, it looks great, but it means nothing to our team members. Well, then we have a question from the audience. Has ESG become a box ticking exercise? Is there wellness washing or what is the component of wellness washing in the hospitality sector? And how do you address that? You know, I think across the board it is a greenwashing or not. I think the moment before we start talking about greenwashing or, you know, do we or do we not unless we talk about it, unless we start small actions, nothing is ever going to change when our industry. Right. The hospitality is a little slower in
adapting to new anything. If it comes to technology, we're the last ones. If it comes to airports, they're the first ones. We go last.
We just come. Whenever everything is done right, it is cheaper. We can actually make an impact in an effort. But to truly as point, right? Unless governments define what the building codes are, unless building materials are much wider available now, it doesn't make sense to bring solar panels from South America to UCC and create a carbon footprint. Unless we start working on it. And yes, it will be greenwashing for a while, because unless we talk about it, nothing will happen.
But it's really an educational process first before anything else. MUNFORD Do you see your your clients, your customers, whether they're on the cruise line or taking part in one of the camps? Are they are you seeing an interest in ESG? What what is driving, do you think? How much of how important is sustainability? I guess I would ask in their choices about where they go and how they get there. So my experience is the following. First of all, if you want to do ESG, it is not about words. So there's too much about.
You have to say something because it's politically correct. ESG we were in Saudi Arabia. There was a lady, a top model. She started saying a speech will be burnt out. It was embarrassing. You have to do the things that you
believe in. So we believe in it because we're good citizens of the world and because it's our product, we sell nature. But so to some nature, you must preserve nature. If you pursue nature, you can sell it. If you bring people to a beach which is
full of rubbish. People don't want to go there. So you have to act to protect the world, the environment and other things. So that is what they think. So that's how we act. And apart from that, we are in communities and we have to work with the community. So I have become and there's a very large program of sustaining the communities.
We provide equipment for making the water drinkable in Kenya. We have a hospital in Uganda. We go a number of these things whenever there is the necessity to help or the opportunity, because it's also an opportunity. And on the ships we are launching two new ships. I had a company called Super. I sold it. I'm launching a new one and the ships
are going to be at the top standards. We bought them from a company which I go broke and we are relaunching them pop standards. The new ones we're going to do are going to be top standards.
It's it's it's a good behavior. And it's it's also a way to develop your company. Know people are willing to pay more. No. But if they have to choose, they will prefer the ones who are better. So it's a cost that you have to carry.
Mara, you mentioned the youth of your company, but that's a topic that we've talked about here in different conversations about the the again, and you mentioned that the overall youth of the populations in the Middle East, which is both an opportunity and sometimes a challenge. How do you address the labor issues for your own projects in the region? I would say mainly staying relevant or being relevant, and I think this is every generation has their their problems or their changes. This generation at the moment opens 20 apps at the same time and average spent on an app is 20 to 30 seconds. So the expectation that somebody will do the same role for 8 hours in the same position doing the same thing is quite unrealistic.
And again, industry, right. It's quite hard to implement multitasking just because it's a pure psychological thing. If I you know, it's the promotion, it's this is my job. That's not my job. But what we're working on is really to
create that journey where you almost feel in charge of the place where you need lesser people or higher qualified people, or you take people that are younger and that you promote in a much faster manner. But I think it's not just a matter of because today we still have so many people that want to work for us. We're not suffering that problem in our projects today, and we have 50 plus projects.
So it's there. Yes, there is a problem. Yes, it's not easy. But also, I think by just the classic way, you know, we need 250 people in six months and let's go fly to three or four different locations and bring people. That philosophy mentality doesn't work
anymore. Julia, do you see that among your members in that region, the sense of, you know, dealing with labor issues, are they not as significant as as maybe I believe? And and how how are your other members approaching how they staff their growing businesses in the region? Yeah, well, it's interesting because I think the issue around labor is a very regional question. So if I can use the words the developed world, which I know isn't, but. In Europe and the US. It read there are some really tight pinch points. Most definitely.
But actually in a lot of the sort of younger countries in terms of travel and tourism, there is a lot of labor. I and in fact the challenge is how do you train the labor, right? So Saudi Arabia is doing a great job opening up various colleges and a lot of our members are working with them. You know, Hilton is established, IHG have established that are training places to actually bring people on. So it's it's it really isn't so much of an issue there. But yeah.
All right. Well, thank you. I definitely enjoy travel and I look forward to visiting some of your establishments in the future. So thank you very much.