TBY talks to two hotel managers on changing visitor dynamics, MICE tourism, and marketing strategies.
What trends among business and leisure travelers have you observed recently in terms of their origin?
SCOTT BUTCHER Our customer profiles are changing as we move to a more business-style hotel. It is therefore important that our service standards match the desires and expectations of these seasoned travelers. We have, therefore, recently introduced our managing excellence program to ensure that our service delivery is focused on particular areas of the guest experience. This also obviously applies to the leisure traveller as well. When we first opened, the hotel was very popular in the Saudi Arabian, GCC, and Asian markets. Now the UK is our largest source market, with significant numbers also from Germany and the US. We still, however, receive significant numbers from Saudi Arabia, the GCC, and India.
MOHAMED AWADALLA At Time Hotels we have a large number of regular guests, especially from Saudi, Kuwait, and Qatar. We run half of our occupancy on a long-term and half on a short-term basis, and since the beginning of 2011 have enjoyed an average 90% occupancy. Overall, 2011 was a very good year for the Dubai hospitality sector, and we saw a lot of business returning, in part due to the Arab Spring. Everything shifted to Dubai, including many tourists—evidenced by a number of Egyptian tour operators moving their operations to Dubai. The Emirate is an ideal pit stop for people from all over the GCC on their way to Europe, and they see Dubai as an essential stop-off location. With numbers climbing over the last year we have naturally considered the possibility of a decrease in guests once the Egyptian market stabilizes, but overall we believe that Dubai is such a strong destination that it will not suffer greatly.
What are your expectations for the MICE tourism sector?
SB MICE is an important market segment and we are devoting more of our sales and marketing resources to it to ensure that we gain our fair share. In future, we will be working closely with all parties in this segment.
MA The Emirate is the number one exhibition destination in the Middle East, and the segment will continue to attract strong numbers and is a particularly excellent asset for Dubai. Keeping this in mind, a plan is underway by TIME Hotels Management Company for an extension adding three more venues to the profile at flagship property TIME Oak Hotel & Suites located at Tecom Al Barsha. A 400-sqm space has been allocated at the hotel for an extension of meeting rooms with adjustable partitions not only adding additional spaces for corporate business events, but also providing a bigger ballroom area for larger evening gatherings. This extension will cover the demand of MICE business and will enable the hotel to accommodate requests for a bigger space.
How does your hotel define itself in terms of the heavy competition in the Emirate?
SB The Park Regis is a very young brand in terms of major hotel groups. We are therefore innovative in our approach to business opportunities. Due to our smaller size and less formal management structure, we are quick to react to business opportunities.
MA Being away from the beach strips does not hinder our success; it allows us to cater a different segment of the market. We offer more affordable accommodation. As we do not have a liquor license, our hotels are generally quieter and consequently more appealing to certain segments. Increased competition does not worry us, as we believe that more choice makes Dubai even more attractive. It creates options for travelers both in terms of availability and in price range. Well-trained staff is the key to success, and as long as you have that you will keep getting business. A broad range of hotels offer almost identical facilities – what attracts people to one over another is the service differentiation. We look after our staff so that they can look after our customers. We also have a strict pricing strategy and we stick to it – we don’t hold our guests to ransom during busy periods by increasing our prices. This means that we build loyalty and get repeat business because we are trusted and have a good rapport with our guests. Repeat guests are very valuable, because they already know the hotel and what to expect.
What has the hospitality sector’s experience been like after the offset of the global liquidity crisis? What changes have you seen now that the global economic indicators are improving?
SB The hotel industry is very resilient and I think that there is now more optimism than there has been for a while. Initially with the GFC, there were significant cuts in all forms of expenditures and rates dropped. However, with confidence resuming, rates are on the rise. Investment is being put back into the industry, and this is very positive.
MA We had to drop the rates a lot during the crisis, which was very hard for us as the running costs alone in Dubai are extremely high. Rates, staffing costs, maintenance charges—all of these add up, and we did find it difficult to cover costs and create revenue. Prior to the crisis hotels made very large profits and investors became used to extremely high returns, and when the crisis came it was of course a shock. We were lucky because our shareholders understood that it was a period that required endurance, and sure enough we came through that period. Revenues are now up again and we hope that next year we will be able to achieve double-digit growth.
How has the apart hotel concept helped to change the accommodation picture for business?
MA Our hotel apartments are ideal for business people passing through Dubai for a finite period. Even for those people moving to Dubai on a more permanent basis, we have noticed that, post-crisis, people are hesitant to commit to long-term leases. Our serviced apartments are the perfect compromise as the rate includes all services and necessities, but on a contract with a break clause which allows for comfort without fear of over commitment.
Are you hoping to move into other parts of the GCC region?
MA We aim to expand from the UAE into the Saudi Arabian market. The Saudi market is huge and the entire industry is eyeing it for expansion, but it is very difficult. You need a very strong local partner, and you have to know how to approach the business. We are ready to move as we have both the resources and the drive.
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