Karim Alibhai Hotels Inn demand

He has over 20 years experience, an eye-watering property portfolio and a company worth billions, but Karim Alibhai is facing the biggest challenge of his career.

Karim PortraitAlibhai is the founder of Gencom Group, which is most famous for investing in the lavish Ritz-Carlton hotels in locations including California, Hawaii, and Philadelphia.
He has the enviable task of pumping money into hotels and residential properties in picturesque hotspots such as Rose Island in the Bahamas and the Turks and Caicos Islands.


But it seems that no one is immune from the global credit crunch. The Kenyan-born tycoon has had to reject a number of investment opportunities due to the plummeting property market.
Alibhai told Asian Enterprise that entrepreneurs are engulfed in their biggest challenge since the Great Depression in the 1930s.


“I cannot imagine going through a bigger crisis than the one in which we currently find ourselves. While no one ever anticipated this level of financial crisis, our approach was to ensure all of our assets within our three, four, or five-star portfolios are in key locations and more than capable of weathering this.


“We passed on a number of opportunities that in hindsight may have been tempting a few years ago, but would have been cataclysmic in today's business climate. We've aligned ourselves with strong brands such as The Ritz-Carlton that clearly differentiates us from other developers.
“There is certainly no averting this crisis anymore than one averts a storm. Now, no one expected this strong of a storm, but nonetheless, it is here and we must deal with it.”


So how does the economy recover from the current turmoil?
Alibhai, whose Gencom headquarters is in Miami, urged new President-elect Barack Obama to open up the financial markets. “Mr. Obama has unprecedented challenges before him.  Everyone agrees that the key to the situation is to unfreeze the financial markets so that businesses can continue moving forward.
“We have viable projects we know will be successful, but the credit paralysis is preventing the major markets from moving forward.” While unfreezing the financial markets is no quick solution, it is a major step forward and Alibhai believes this should be Obama’s priority.

“While the destination and second-home markets have not been affected as severely as others, the global financial crisis has raised unprecedented challenges,” he adds.
Alibhai is thankful though that Gencom Group’s projects and property locations are solid and strong. “Gencom Group's successful formula of building the right brand in a prime location, in high-barrier-to-entry markets allows the firm to withstand the present marketplace downturn.


“While we understand that today's market is more turbulent than in the past, our research shows that affluent home buyers still want to live in the unique lifestyle projects that we develop.”


A world away from the credit crunch was last month’s £13.5m party to mark the opening of the Atlantis hotel in Dubai.
The hotel, where a basic suite costs £550 a night, was built on the man-made Palm Island in a partnership between South African group Kerzner International and local developer Nakheel.


Alibhai, who founded Gencom Group in 1987, admits he would consider investing in a similar pristine hotel in the oil-rich UAE.


“Historically, Gencom has not been shy with investing or re-investing. Like every entrepreneur, I look at options and opportunities as they arise. If the right opportunity presented itself, I could certainly see Gencom seizing it.”
Alibhai’s ambition of investing in lavish hotels stems from his father, who was a trader and involved in cotton oil manufacturing in Kenya.

While the achievements of South Asian entrepreneurs who migrated to Britain are well known, those who migrated to the US have enjoyed just as much success.
When the Alibhai family moved to Texas in the early 1980s they turned their attention to the hospitality industry and began building their empire.


“My family strongly believed in pursuing our goals and through dedication and commitment we would be able to achieve what we desired. When we first lived in the US, we dreamed of one day opening a Holiday Inn, so we started by acquiring a Best Western hotel and moved forward from there.”


The dream became a reality in the early 80s when the family opened their first Holiday Inn in Texas and celebrated with a three-day party. “Back then, owning a Holiday Inn was a great accomplishment for my family and for me. We were officially in the hospitality business.”


And the father-of-two is determined to continue Gencom Group’s tradition of being a family affair. “Since my family first became involved in the hospitality business together, I am a true believer that my children will somehow be interested in the business, especially after the amount of exposure they will have in the coming years.
“My children are quite young now to consider their professions, but I understand the satisfaction of building a company from the ground up like I did with Gencom Group in the late 1980s. Whether my children choose the real estate industry or another profession, I will definitely teach them the right formula for building a successful brand.”


But before Alibhai’s son and daughter take over the reins, the family can enjoy winding down in a range of luxurious hotels.
“One location I am particularly fond of, because of its surroundings, is The Ritz-Carlton, Bachelor Gulch in Colorado. It is a great destination for my entire family to enjoy because it is extremely family-oriented. Bachelor Gulch is a year-round resort, where I can enjoy the ski season in the winter and the cool outdoors in the summer months.”


Despite the financial crisis, Alibhai is determined to continue to expand his hospitality empire, which already includes the Park Hyatt in Toronto and La Posada De Santa Fe Resort & Spa in New Mexico.

snowy mountains
His blue chip asset remains the Ritz-Carlton brand, which he got involved with in 1995, and his current projects include the Residences at the Ritz-Carlton in Philadelphia and Bachelor Gulch in Colorado.


His most exciting project is developing a Ritz-Carlton hotel on the private Rose Island in the Bahamas. “We currently have several projects in the Caribbean with both resort and residential, mixed-use components.


“I believe in the long-term viability of luxury resorts, especially in prime locations that continue to draw interest internationally, like the Caribbean, especially because we have sought out properties in significant barrier-to-entry markets and each resort offers unsurpassed amenities never before seen in the area. 


“I admire the desire to make things greater, to envision growing a brand or tapping into markets that have yet seen luxury properties like we develop. Through our partnership with The Ritz-Carlton flag we pioneered change, which at first was quite a challenge for the brand to embrace.


“But we aimed, and still do today, to give each Ritz-Carlton property its own identity. Whether the resorts are located along the sandy beaches of an island like The Ritz-Carlton, Key Biscayne, or a mountainous ski destination like The Ritz-Carlton, Bachelor Gulch, they all offer distinct environments and experiences alike.”
Alibhai’s strong partnerships with strong brands will continue to be the foundation of Gencom’s philosophy as the company embraces yet another challenge moving through the current credit crisis.

 

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