Are Dubai hoteliers pushing UK operators away?
The pricing tactics of Dubai’s hoteliers have
been under scrutiny for time.
During the Halcyon days - we’re talking
pre-fi nancial crisis, of course - when Dubai was en vogue,
particularly with the Brits, and rooms were in relatively
short supply, the going was good, to say the least.
Hoteliers were rubbing their hands together -
occupancies, room rates and therefore Revenue Per
Available Room (RevPAR) shot through the roof. The
owners were happy, the management was happy and the
cashed-up punters were so surprised they’d managed to
get a room that they were happy too.
Dubai hotel managers were in the enviable position
where they could demand high rates from operators and
wholesalers - but then the tables turned.
It was a shock to the system when demand dropped and the
international travellers suddenly wanted value for money.
Negative press did nothing to help Dubai’s image and
so many guests looked to more competitively-priced
destinations for their holiday or short break.
All of a sudden, Dubai was too expensive, rooms became
empty and hoteliers panicked.
The problem was that many had little experience of such
economic conditions plus the owners still wanted the big
bucks and this generated a reluctance to drop prices.
Now, you would think that 18 months into this global
meltdown, the forces of demand and supply would have
balanced out the market?
Some, including most hoteliers and the Dubai Department
of Commerce Marketing (DTCM), say they have.
Both claim rates have dropped considerably and as a
result, rooms are full once again.
This may be the case, but many of the Dubai-based
Destination Management Companies (DMCs) and the tour
operators they have to deal with have said the partnership
is still one sided.
Many believe room rates are still too high and that more
fl exible pricing structures need to be adopted.
They say tacticals are too last minute plus Dubai really
needs to look at more all-inclusive options.
So hot is the topic that one of main debates at next
week’s Arabian Travel Market (ATM) - entitled ‘Hotels get
real’ - addresses these issues.
Panellists representing hotel managers, owners, DMCs
and online agencies are all taking part but funnily enough,
no UK tour operator wanted to sit on the panel.
In fact, a handful said they were so fed up with the very
Dubai hotel tactics being discussed that they’d actually
decided not to attend this year’s show.
Of course, there are many UK tour operators who will be
attending, but it’s interesting to note that
some are heading off to the shows put on
my competing destinations.
The upshot is that both sides - the
hoteliers and the operators - need to
become more realistic.
They’ll be some jostling and some
tipping of the scales both sides for
a little while longer, but in the end,
the forces of demand and supply will
hopefully get the balance right.
What do you think?