Belgium-based Rezidor Hotel Group, looking to tap demand in main Arab cities, said on Thursday it was planning to expand its hotel network by managing 18 more hotels in the region over little more than three years.

Kurt Ritter, chief executive, said the company wants to add about five hotels a year under a plan to increase to 40 the number of hotels it manages from 22 hotels currently.

'The Middle East is doing very well compared to the rest of the world,' said Ritter. 'It has been fortunate in a way with the crunch coming late and with a much lesser impact than in Europe and the US.'

RevPAR, or revenue per available room has declined as a result of the global financial crisis. Dubai -- the Gulf's trade and tourism hub -- saw a drop of around 35 percent in the measure in the first half of 2009.

Ritter said while the decline in Dubai was significant it fell from high levels. Occupancies and RevPAR are still declining in Europe and the Middle East is fairing relatively better, said Ritter.

'We are opening five hotels a year more or less in the region. We will keep that pace if not accelerate it,' said Ritter, adding that Rezidor was looking at opportunities in several Middle Eastern cities in addition to Egypt and Libya.

'We are looking everywhere ... in all the cities where it makes sense for us to be present.'

Rezidor, which manages luxury brands such as Regent, Missoni, and Radisson, is also looking to bring its mid-market Park Inn hotels to the region to tap the growing market segment.

'I am sure the Middle East will accept the trend of mid-market hotels in time,' he said. 'There are many five-star hotels and the little crummy local hotels but nothing in between and I think there is a big opportunity there.'

However, adapting such brands to the local market is a challenge, said Ritter.

'I don't think you can apply the European model to budget and mid-market. Park Inn in Europe is a simpler version in Europe than what we do here in the Middle East.'     Ritter sees opportunities for further expansion in the Saudi Arabian market, particularly in the mid-market segment.

'I'm sure Park Inn will do well in Saudi (Arabia),' he said, adding the firm would aim to have more presence in the main cities of Riyadh, Jeddah and Dhahran.

The company has 10 hotels either in operation or under development in Saudi Arabia, the largest Arab economy. – Reuters