Dubai hoteliers must be bold on pricing
We are living in unprecedented times. No one I know predicted the dramatic change in hotel demand that we have experienced in Dubai over the past 12 months or that room rates would drop to the extent they have.
I recall when announcing that the first Premier Inn in Dubai would be charging a fixed rate of Dh495 being challenged over and over again by the press and, in particular, corporate customers who said such a low price would soon disappear. They said Premier Inn would be like all the rest and hike its prices up to nearer Dh800 after a few weeks. That was just 18 months ago! How soon we forget. Premier Inn rooms are now available from as little as Dh295.
So I think hoteliers can be forgiven for getting it wrong last summer and for asking the travel industry to help promote last-minute offers. Dubai's resort hotels caught a cold and only avoided tourist flu by thinking again as demand collapsed. What really matters is what happens now and in the future.
Dubai reportedly has another 7,000 hotel rooms coming on stream in 2010. There is no sign that visitors from the key feeder markets are getting over the recessionary worries in their own countries sufficiently to feel confident enough to flood back in sufficient numbers and take us back to where we were.
As hoteliers we must therefore be bold on pricing and prepared to cut our cloth according to what we can afford.
The debate has so far been largely about resort hotels, but the situation has been even tougher for properties more geared to the business or corporate market. Hotels located away from the beach or shopping malls depend on business travellers and those attending trade shows or sporting events for their livelihood, and many have really suffered this year. The demand from the corporate market is of course what it is and cannot be boosted by discounted rates or cheap flights. The pie has become significantly smaller and more and more properties need a slice. So what's to be done?
I believe that Dubai must shed its image of being over-priced and we must show the world that we have excellent affordable hotels to host everything from conferences to incentive groups to international sporting and cultural events.
We have ever-improving and growing world-class facilities for such activities and indeed already host many great business drivers such as the Emirates Dubai Rugby 7s, but we need more. Few people know that the Monte Carlo Rally and the Cannes Film Festival were first created by hoteliers who had empty rooms to fill.
With the arrival in numbers of such brands as Holiday Inn Express, Ibis and Premier Inn, Dubai now has a hotel product for everyone. I call upon my fellow hoteliers to pull together and work with the DTCM and agencies such as Arabian Adventures and Congress Solutions International, to attract more events to our great city and to create more of our own. Watch out for the Dubai Desert Domino Diathalon, it could become a reality. Stranger things have happened!
n The author is Managing Director,
Premier Inn Hotels, Middle East
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