Middle East Hotels Shift Towards Franchising

Tim Elliott (0:00)

It's the Morning Drive, it's Mira Business FM. The Middle East hotel sector could be entering a major shift. Franchising is gaining ground as hotel owners look for more control. Lower cost hotel groups are seeking faster and more, I guess, capital light expansion. With the Arabian Travel Market putting the spotlight on the region's next phase of tourism growth, are we at a tipping point where the franchise model permanently rewrites how hotels are developed across the GCC? And if we are, what does this mean for owners and developers? Some of the questions I'd like to put to Ron Pohl, who joins me now. He is the president of International Operations for BWH Hotels and is the president of WorldHotels, which is part of the BWH Hotels portfolio. Ron, it's good to have you here.

Ron Pohl (0:50)

Tim, great to be here. Thank you for having me.

Tim Elliott (0:52)

Well, thank you for joining us. Welcome to Dubai, of course, as well. I'm really interested. I want to get to grips with kind of how the region's hotel development model is evolving from that kind of traditional, I guess, management contracts towards franchising. But it would be kind of remiss of me not to seek an opinion or at least an overview from you on 2026, because it's been tough for the industry. I think it's fair to say it's a tough environment.

I'm interested in your thoughts on hospitality right now.

Ron Pohl (1:26)

Well, I would say first and foremost, hospitality is a resilient business. Been around for probably one of the oldest businesses ever. But we're confident in that this region is something that is very opportunistic for us.

The best Western brand is what we're most commonly known for, our core brand. But we have WorldHotels, which is our luxury and upper upscale brand. And the combination of that is really what we're focused on for this region of the world and really became very interested in it within the last five years. I mean, we're a global company, over 4,000 hotels, but half of our hotels or more than half are in North America. We expanded into Europe first, and then in recent years, our focus have been in Asia and Middle East and Africa. And the reason is that's where customers are looking to travel. And certainly, this is my first trip here. I've tried a couple times to get here to ATM and not been successful, but the reason I'm here and our team is here is because we're so impressed with what is happening, that the change that is happening so quickly in the Middle East is just phenomenal. And, you know, I see this as we see this as a very long term destination. We've always been a franchise company. We've never been asset heavy. So as we look here, we've built a model around hotel success, quite honestly.

It's not about putting numbers on the board. It's about how do we ensure that the hotels that we develop here with owners are successful. And we take our time to do that.

Over the last three to five years, we've developed 27 hotels in the region. Our goal is to get to 60 or 70 hotels in the next three years across all brands. So it's it we're confident that this market is going to continue to exceed expectations.

Tim Elliott (3:37)

You've got some work to do by the sounds of things. Let me start quickly. I didn't realize it was your first time here. It's interesting to get the thoughts of somebody so fresh, I guess, to the UAE.

Tell me a little bit about that. When you got off the plane, the warm air hit you as you hit the tarmac. What's it been like?

Ron Pohl (3:58)

Well, I'm from Phoenix, Arizona. So the climate is exactly the same. I felt at home, but I felt at home for more than just the weather. I mean, the hospitality is tremendous. I mean, it's so welcoming from... You know, the ease of travel here is something that you don't experience around the world. And I've got 3 million miles, so I fly everywhere. But the ease of coming into the airport, the arrival, the friendliness, it's all been tremendous. I've only been here 48 hours.

Saw much of the city, but I'm so impressed with what's occurred here.

Tim Elliott (4:34)

Yeah, those first impressions I think are important as well, aren't they? Historically, this market has been dominated by big hotel management agreements.

And you have global brands running the show from top to bottom. Franchising is gaining momentum, there's no doubt about that. What is it that owners and developers across the region, in terms of the old one, what are they pushing back against? And what is it about the autonomy that franchising provides that's so attractive?