Executives promising to go naked on television, Cobone’s PR stunt, and The Address’ post-crisis crisis?

Paul Kenny's fake PR release for Cobone, Ziad El Chaar naked on TV and Emaar's ongoing issues following the Address fire made this week an interesting one for media in the UAE (image source: Arabian Gazette)

Paul Kenny’s fake PR release for Cobone, Ziad El Chaar naked on TV and Emaar’s ongoing issues following the Address fire made this week an interesting one for media in the UAE (image source: Arabian Gazette)

Media in the Middle East is rarely dull, and the past few days have proved that there’s some hilarity as well as serious questions about what people in our region do and then tell to the media.

Let’s start with the real estate brand which is developing a reputation for foot-in-mouth disease. Speaking to the Sunday Times, Damac’s Managing Director Ziad El Chaar told The Sunday Times he would “go on TV naked and resign” if the worst market projections are realised. Aside from the fact that any naked executive dance on television would be illegal in the UAE (at least without a VPN), his comment hasn’t been taken too well judging by the reaction on Arabian Business’ online portal. Maybe there’s some fans of naked real estate executives out there. If so, please do show yourselves so we can get you help…

Another bizarre piece from last week which wasn’t picked up widely. Speaking to an audience of entrepreneurs last week, the founder of discounting site Cobone Paul Kenny admitted that he used a PR stunt to kick-start his business. Shortly after founding the site, Kenny put out a press release claiming that 1,000 vouchers for a discounted pizza had been sold to Cobone consumers. That release, Kenny now claims, was a fake. Let’s quote Kenny from the Arabian Business story.

“We were second to market. GoNabit [an online group buying website founded by Dan Stuart and Sohrab Jahanbani] was first. When we launched, everyone was saying: ‘You are the same as GoNabit,’ which we were but I said we weren’t.

So I went to at Vapiano, which is an Italian restaurant, and bought a thousand pizzas at a huge discount and they sold out by 12pm. I put a big sold out sticker on the site and an hour later I released a press release saying ‘Cobone.com breaks e-commerce record in the Middle East.’

And the truth is that everyone started reading and asking ‘Who is this company Cobone.com?’ ‘What is e-commerce?’ ‘What’s a record?’ You know it created a lot of interest in the business and instantly people started recognising us as a different business.

I remember that a day after you could do a Google search to see we were on around 483,000 websites. First, e-commerce in the Middle East was never covered. Then what is an e-commerce record? What is Cobone.com?

So you got a ball rolling of media interest from that point.”

There’s a popular saying about the luck of the Irish. And there’s another saying about making one’s own luck. Luckily for Kenny, no asked if the news was real (or checked with the restaurant). If they had, his deception may not have worked so well.

And finally, another follow-on story about the New Year’s Eve fire at The Address, from The National in which one owner of property at the hotel lost 1.3 million Dirhams worth of art in the blaze.

Ramin Salsali spoke out this week urging The Address owner Emaar Properties to quickly process residents’ compensation claims as well as repair the property. To quote from the story.

“Until now, they [Emaar] have been very fair and have quickly reacted to accommodate people, put them in hotels, give them the first basic possibilities just to start to recover.”

He expected “a very unbureaucratic and pragmatic approach” from the developer in terms of how claims were handled – especially since a police report last week indicated that an electrical short-circuit from a spotlight caused the blaze.

“The whole world is now watching. The effect on real estate is unbelievable. People have pulled out of contracts where they don’t know about the fire safety of the cladding. It’s not good for Dubai.”

One of the greatest challenges any organization can face is not just the crisis itself, but the post-crisis reflection and learning. Emaar isn’t there yet in terms of dealing with any major grievances from those who lost property and items during the fire (and there’s been remarkably little negativity from any of the hotel’s residents so far), but the communication with this group of people needs to be both clear and quick to get these issues resolved. Otherwise, Salsali’s point about blow-back for the Emirate’s real estate sector may become true. Let’s hope not.

And for the next post I’ll be talking daddy issues again. It’s been a while since I posted any stories about my little princess, and I’m looking forward to it!

Flip-Flopping during a crisis – how Damac’s handling of the Trump backlash has proved costly

First you don't see it, then you do. Damac initially removed Trump's name after his comments on Muslims, only to restore it a couple of days after (top photo by Reuters/bottom photo by  Rahul Gajjar of Khaleej Times)

First you don’t see it, then you do. Damac initially removed Trump’s name after his comments on Muslims, only to restore it a couple of days after (top photo by Reuters/bottom photo by Rahul Gajjar of Khaleej Times)

Imagine for a moment, if you will, one of your key business partners/influencers saying something controversial. Imagine that they’ve just racially attacked your most important group of customers. And then imagine that, rather than dumping this partner, you instead flip-flop around the issue and end up not only looking rather foolish, but do yourself and your reputation a fair amount of harm in the process.

If you work at Damac, you don’t need to imagine any of the above. The Dubai-headquartered real estate developer, which counts Donald Trump as one of its business partners, has been flip-flopping since Trump came out with a comment on the 7th of December that there should be a “total and complete shutdown of Muslims” entering the United States. This statement, which was made following the deadly shootings in California’s San Bernardino, weren’t the first Trump had made about Muslims. He had previously that he was in favour of shutting down American mosques and establishing a database for all Muslims living in the US or giving them a form of special identification that noted their religion.

Damac’s relationship with Trump International includes branding for two Trump-branded gold courses and a collection luxury villas at the developer’s Akoya project in Dubai. I don’t know the full extent of the relationship, but local newspaper 7DAYS claimed that, in addition to the licensing fees that Damac would have to pay to Trump for the use of his name and image, Trump himself had invested in the project.

Following the controversy around Trump’s latest Muslim statements, Damac put out a statement that could be called, at best, avoiding the issue.

Damac Properties senior vice president Niall McLoughlin told 7DAYS in a statement: “We would like to stress that our agreement is with the Trump Organisation as one of the premium golf course operators in the world and as such we would not comment further on Mr Trump’s personal or political agenda, nor comment on the internal American political debate scene.”

Instead of publicly taking Trump to task and distancing the company from his statements, Damac took a different approach. A couple of days after the outcry, on the 10th of December Damac took Donald Trump down – his image and name that is, from their developments. To quote from 7DAYS.

Hoardings that previously carried photos of the billionaire businessman advertising Damac’s Trump-branded golf course and luxury villas stood bare on Umm Suquiem Road on Thursday, right at the entrance to the development.

All well and good you may think – Damac quietly rebranded their development and distanced themselves from Trump. However, in a further twist, Trump’s name was back on billboards two days later, on the 12th of December. Here’s how the English-daily Khaleej Times put it:

On Friday, a prominent advertising billboard showing Trump golfing that had stood at the Akoya development, where the housing and one of the golf courses is being built, was gone. All that remained of it was the board’s brown wooden background. Another billboard declaring the development “The Beverly Hills of Dubai” still stood nearby.

Trump’s name also appeared to have been pulled off one sign greeting visitors to the complex. The sign, outside a sales office at the site, originally had Trump’s name in lettering on a stone wall. But on Friday the letters were littering the ground in front of it.

A second, similar sign facing a major road was intact with Trump’s name on it. Earlier in the week, that sign had been taken down but by Friday, it was back in place.

“The exterior signage at Trump International Golf Club, Dubai was temporarily removed on Tuesday for a short period of time, however as of last night, the signage is back up and fully intact,” the Trump Organization said in a statement to The Associated Press on Friday.

Also, the Damac webpage dedicated to the Trump PRVT gated community, which is part of the development, appeared to have been removed, leading only to a “not found” page.

Since the development is still under construction, the removal of the branding with Trump’s name and image seemed to be largely symbolic. It was not known if it signaled Damac will outright break the licensing contract.

Damac Properties has declined to comment on the removal of Trump’s name and billboard from the property. It earlier said it “would not comment further on Mr. Trump’s personal or political agenda, nor comment on the internal American political debate scene.”

To change the issue, Damac has switched tactic. Instead of talking politics, the developer announced that it would guarantee rental returns for those buying in its Akoya (Trump-branded) project. The National broke the story last week.

Damac Properties, the developer caught in a storm over its partnership with the controversial US presidential hopeful Donald Trump, is offering lucrative rental returns on some of its properties to lure investors.

Damac, which said it would stick with Trump International despite his anti-Muslim tirade, is providing a 24 per cent rental guarantee on selected units in Dubai, including the Akoya project associated with the billionaire, the developer said in a statement.

Owners of selected properties will be able to secure an eight per cent annual return in the first three years after handover.

The company was offering these returns because it believes the Dubai property market is “set for stable growth in the medium term”, Damac said. “We have seen quite a bit of scaremongering in the market in recent months, which can have a detrimental effect on sentiment in the market,” said Niall McLoughlin, the senior vice president at Damac. “By providing such a high, tax-free offering on our units, we are putting our head above the rest and underwriting any fluctuations that may occur down the line.”

Reputational issues become even more important for companies which are listed, as Damac is. Damac’s shares initially fell 15 percent following the muted response. Investors may also not have appreciated the rental guarantee initiative, as you can see from the share price chart below.

Damac's share price fell after the initial outcry. The share price has also fallen following Damac's attempts to repair the reputational damage through the rental incentive promise.

Damac’s share price fell after the initial outcry. The share price has also fallen following Damac’s attempts to repair the reputational damage through the rental incentive promise.

While I don’t know the relationship between the two, would Damac have been wiser to have taken an initial hit and exited the contract with Trump rather than flip-flopping on the issue, drawing it out and drawing more attention to the brand association? Add in the costs with guaranteeing rental returns in addition to the share drop, and this crisis will prove costly both in the short as well as the long-term. To me, the media and the company’s shareholders the answer about whether or not to dump Trump – and take a short term hit through contractual obligations but save the company’s reputation and keep shareholders and customers happy – seems fairly obvious.

When should brands step away from a toxic celebrity – the Trump effect

The Trump is known for his outspoken views, but what damage have his latest rants done to brands in the Gulf?

The Trump is known for his outspoken views, but what damage have his latest rants done to brands in the Gulf?

I know you’re tired of hearing about Donald Trump. Everywhere I look on the internet and social media, all I see is Trump, Trump, Trump… I am sorry to write about this man again, and give him yet more coverage that he doesn’t deserve, but this time I’m focusing on brands and what they do when their engagements with celebrities turn toxic.

As everyone with an internet connection knows, Donald Trump said something very stupid about stopping Muslims from entering the US. Here’s the Trump in action below.

The problem for Donald, or should I say the brands that are associated with him, is that he has business interests in the Muslim world, including here in the Gulf. Dubai-headquartered real estate brand Damac has been working with Trump for several years, and has a number of golf courses and other developments named after Trump and his family. Dubai’s Landmark Group sells Trump Home-branded products across the Gulf in its Lifestyle shops. While the Al Tayer Group opened two Trump Home by Dorya galleries in the UAE in June.

The response to Trump’s comments about banning Muslims from the US has drawn different reactions from these three entities. Damac was the first to comment, with the company’s Senior VP for Comms saying effectively the Trump brand is distinct from the man himself.

“We would like to stress that our agreement is with the Trump Organisation as one of the premium golf course operators in the world and as such we would not comment further on Mr. Trump’s personal or political agenda, nor comment on the internal American political debate scene,” said Niall McLoughlin.

Al-Tayer shared its own views with the Dubai media’s 7Days paper, with the following statement: “The statement Mr Trump made on the campaign trail is unfortunate. Given his diverse business interests in the region, we hope that he will reconsider this stand.”

Most interestingly, Landmark Group has decided to drop the Trump range of products from its stores. Landmark works with another celebrity who has a love/hate relationship with the public. Bollywood star Salman Khan was convicted of manslaughter earlier this year back in his home country of India, and yet he is still a brand ambassador for one of Landmark’s retail brands.

“In light of the recent statements made by the presidential candidate in the U.S. media, we have suspended sale of all products from the Trump Home decor range,” Lifestyle CEO Sachin Mundhwa said in an email to media outlets including the UK’s Independent.

Will Damac and Al-Tayer follow Landmark’s example? Or will they stick out the ensuing furor? When does a celebrity engagement do more harm than good? With Trump unlikely to apologize for his comments this can only get messier for those companies which are still associated with the Trump.

Déjà Vu and Dubai’s Real Estate Sector – Is Communications Doing Enough to Win Back Consumer Trust

We’d just finished off another round of Cityscape here in Dubai, an exhibition that was the highlight of the decade that was the 2000s. When 2008 struck, Cityscape was almost forgotten about. No one wanted to be reminded of how much Dubai’s real estate sector had fallen. Anyone who visited the event this month may have been forgiven for thinking that the downturn never happened. We were bombarded with news about how good everything is looking; one executive from Dubai-based executive Damac claimed there had never been a property bubble to begin with.

All the good news hasn’t been without incident. An announcement at the beginning of this month revived plans to build a canal, this time linking Dubai’s Business Bay waterway system out to the Gulf at what is now Jumeirah Beach Park (Alex McNabb wrote an excellent blog piece about the news which you can read here). Other reports have focused on stalled projects which have neither been revived or cancelled, basically locking in investor money (the law here in the UAE requires projects to be cancelled before any collected monies can be returned to investors), and the proposed establishment of a body that would help return funds to those who invested in projects which never got off the ground.

While there’s no doubt that the boom is back and that Dubai is again one of the leading lights when it comes to global real estate, is enough being done to ensure not just investors but ordinary people out there, the likes of you and me, that mistakes which were made in the past will not be repeated?

If you’re an Arabic speaker listen to this interview at Cityscape with the CEO of Damac Ziad El Chaar.