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The Case Study: Detailed Introduction
The object of this case study is the Al Wahda complex, located in Abu Dhabi City in the UAE. The project was conducted by EC Harris International Ltd; moreover, the company observed and managed every step of the project, i.e. presentation and development of the concept, as well as suggestions on the furniture and interior design. EC Harris International Ltd’s involvement in the project was so significant that they were also allowed to provide names for some of the facilities at the hotel.
The Al Wahda is a five-star hotel that also includes the shopping mall (biggest in the city), as well as apartments and office spaces. The project development was estimated to cost £400m; the hotel’s development continued from the year 2005 until 2012. The company’s initial aim was to create an “exciting shopping mall, five-star business hotel, office, and residential buildings” (Overseas Project of the Year 2012 2012, p. 2). The business model EC Harris used during the development of the project included verification of the design, workshops dedicated to the engineering and its assessment, as well as evaluation of the risks and their management.
The industry rivals of the company are not stated, but since Abu Dhabi City is a tourism center in UAE, it is clear that the EC Harris’ project has to compete with various shopping malls, luxurious hotels, and restaurants in the city. One of the main benefits of the project is its ability to accommodate various facilities that are not only attractive for the tourists but also offer leasable space that will bring profit in the future. Moreover, Al Wahda Football Club is also accommodated in the facility; this fact might increase the hotel’s and mall’s value in the eye of the public.
However, the project also had to face some challenges that could have hindered its final success. When in the year 2008 the financial crisis began to develop, it had an impact on thousands of companies, including EC Harris. The project’s further development was dependent on the supplies of concrete, as well as steel prices that, during that time, became unstable. Therefore, the company could face the shutdown of the project that would bring great losses and harm the company’s image as well. However, the main contractor for the project, the company Civilco (Civil Engineering & Contracting Co. W.L.L), continued to provide the needed tools and supplies so that the building of the Al Wahda would not stall. As stated on the website of Civilco, the company has been involved in the safe and successful building of schools, hotels, hospitals, palaces, etc. (Company introduction 2012). It is possible to assume that the initial success of the Al Wahda project was also due to the cooperation between such experienced and awarded companies as EC Harris and Civilco.
Although not stated in the text, EC Harris was a project of another successful management consulting company Arcadis NV. These two companies merged in 2011 before the project was finished. However, since Arcadis NV is a more experienced and respected company (founded in 1868), it is evident that the representatives of the EC Harris had to coordinate their plans and management with the higher authorities (Our Perspectives 2015). Thus, cooperation and the followed merging with Arcadis NV have most likely influenced the major success of the Al Wahda project.
As stated on the website of the Al Wahda Mall, there are three principles that they follow: understanding of the customer’s wishes, indicating the values added, and being competitive.
Assessment of the Benefits and Outcomes
Since the case study provides an example of a business project that was already implemented, the analysis will focus on the correlation of the expenses, benefits, profits, and unexpected losses.
As the authors correctly state at the beginning of the case study, Abu Dhabi is a business and shopping destination for many (Overseas Project of the Year 2012 2012, p. 1). Indeed, Abu Dhabi has become a megalopolis, even a brand in recent years (Hashim 2012). Therefore, it was a potentially profitable idea to establish a new, large, and luxurious (five-star) hotel in the center of the city that attracts millions of tourists every year. However, the city is a tourist destination, so there are thousands of rival companies in the industry. EC Harris needed to prove that their project was more attractive to the tourists than any other that was implemented earlier.
The company established, alongside with the five-star hotel, a shopping mall (that is the biggest in the inner city, as the author’s state) that guaranteed an inflow of tourists and citizens who were attracted by the new opportunities and entertainment, presented in the mall. These means helped the Al Wahda Mall become a serious rival to other malls and hotels in the area, although it was relatively new at that time. Moreover, Al Wahda Football Club’s residence was also located in the Al Wahda complex, so the facility had yet another advantage over the competitors. This feature remains to be unique and can add a significant number of tourists that come to the Al Wahda Mall every year.
Grand Millennium Al Wahda Hotel
Compared to the other malls and hotels that compete with the Al Wahda complex on the market, Al Wahda is considered to be the biggest hotel in the area (400 deluxe rooms (844 rooms total) vs. 302 rooms (Emirates Palace), 88 suites (Eastern Mangroves Suites by Jannah), 382 rooms (Jumeirah At Etihad Towers)) (Oxford Business Group 2014).
As to business facilities and opportunities in the hotel, Grand Millennium Al Wahda provides necessary audio-visual equipment; there is also a business center in the hotel where an event-planning team can offer its services (Oxford Business Group 2014). The hotel also provides 24-hour room service and various buffets (international, Italian, Asian, etc.). Although Grand Millennium Al Wahda hotel does not provide a unique variety of buffets (compared to Emirates Palace), it is still attractive to tourists due to the number of rooms and presence of the business center. It will be especially needed during business trips of representatives of global companies during international economic and business summits. According to the hotel’s general manager Michael Sorgenfrey, the hotel has become a target for business travelers due to its close location to the business centers of Abu Dhabi (Nair 2011).
Moreover, as the general manager states, the hotel has also been working with the Etihad Airways (awarded with Skytrax World Airline Awards); both these companies are focused on the customers from the countries of Gulf Cooperation Council (Nair 2011). The MICE market (Meetings, Incentives, Conferences, Exhibitions) also brings new residents to the hotel, because the number of rooms allows accommodating more than 300 guests in the same facility. Ten percent of the hotel’s business mix is made up of the guests from the United Kingdom, so the hotel is interested in investment and expansion of this market (Nair 2011). Although several hotels were mentioned as the rivals, the general manager recalled only one real competitor, i.e. Abu Dhabi Mall that has more shops than the Al Wahda Mall, as well as a hotel connected to it – Beach Rotana. From this point of view, there are only two complexes in Abu Dhabi that offer the guests both a hotel and a shopping mall. Grand Millennium Al Wahda attracted 300,000 tourists in its first year in business (Sinclair 2011). In the year 2012, the hotel’s occupancy made 54%.
Al Wahda Shopping Mall
The Al Wahda Mall is run by the LuLu Group, one of the biggest operators in the GCC market. The group is considered to be “the front-runner in implementing many “inflation curbing” initiatives” (LuLu Group: Going places 2016, para. 2). The group has worked on bringing down the prices of imported products that have brought benefits to all malls owned by the company, including Al Wahda.
In 2012, Al Wahda’s competitiveness on the market increased due to two hundred newly opened shops and stores. Such prominent brands as Virgin, H&M, Calvin Klein, Pull&Bear, etc. opened their stores in the Al Wahda Mall. Thus, retail space grew up to 2.3 million square meters in 2014, and Al Wahda has become one of the leaders on the Abu Dhabi market, but the mall continued to expand. Since the Al Wahda Mall was constantly overcrowded, there was not enough parking space for all guests who arrived at the mall. In 2012, an additional 2,000 parking lots (four floors) were presented to the guests (Dasher 2012). Thus, more guests were able to visit the mall, and the benefits for the mall were expected to rise.
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However, the Al Wahda Mall has offered some opportunities for entertainment other than shopping: different activities were offered to the families with children in Sports Lounge and Kidz Factory (Sankar 2016). Such an approach is useful to attract more business guests or tourists that travel with families. Although the Al Wahda hotel’s primary target are the businesspeople, entertainment for children will attract more visitors among locals, too.
Today, there are hundreds of brand stores present in the Al Wahda Mall, e.g. Crocs, Jack Wolfskin, Swarovski, Nike, Converse, Victoria’s Secret, and many others. The mall also provides customers with various activities that focus on such issues as cancer, health, waste recycling, and others (Sankar 2016). A big tourist attraction is the Al Wahda Football Club store where visitors can buy souvenirs and clothes related to the club.
The Al Wahda Mall was one of the first malls in Abu Dhabi that charged the visitors for parking; although the first three hours were free, next hours cost Dh10 (3 to 6 hours) or Dh50 (6-10 hours). Overnight parking at the mall was the most expensive – Dh350 (Dasher 2012). The estimated number of Al Wahda visitors is 28,000 – 30,000 per day, so fees for the parking lots can become highly profitable for the mall.
Although the Al Wahda complex was recently opened and had to compete with older and more experienced rivals on the market, it has proven to be highly efficient and attractive for tourists, and, especially, business travelers. Grand Millennium Al Wahda is the biggest hotel in Abu Dhabi, and the Al Wahda city mall is the biggest in the inner city.
Dasher, N 2012, New shops to be welcome additions to Al Wahda Mall in Abu Dhabi, Web.
Company introduction 2012, Web.
Hashim, A 2012, Branding the brand new city: Abu Dhabi, travelers welcome, Springer, Berlin. LuLu Group: Going places 2016, Web.
Nair, D 2011, Grand Millennium joins Abu Dhabi hotel scene, Web.
Our perspectives 2015, Web.
Overseas project of the year 2012 2012, Web.
Oxford Business Group 2014, The report: Abu Dhabi 2014, Oxford Business Group, Oxford.
Sankar, A 2016 Who says malls are only for shopping?, Web.
Sinclair, H 2011, Grand Millennium Al Wahda attracts 300K visitors, Web.