Artist's impression of The Royal Amwaj Resort on Palm Jumeirah in Dubai, which will offer an all-inclusive option.
Why do you consider all-inclusive hotels to pose such a danger?
Yigit Sezgin: I’ve seen it in several places. First of all, in the market there’s a big demand for it. You go into any leisure market, feeder markets, in Scandinavia, UK, Germany, there is a serious demand.
What we are trying to do at the moment, for example, is to get one of our properties in Egypt out of being all-inclusive and it’s absolutely impossible.
The thing is people start to choose that and then the tour operators start to threaten you and say: ‘If you don’t give me the option I can’t sell you because this is the demand. I cannot sell only B&B or half board or even full board’.
| Advertisement |
You start it with exclusive options and higher prices so you keep your margins, [but] there are very few resorts and destinations that I know today that are actually able to hold on to those margins and to the quality because the people who book and spend money in Dubai properties, in the resort properties especially, would not like to be together with the ones that are coming for the all-inclusive option.
Another thing I’d like to say is it’s very dangerous for the local economy, because most of the people that come to all-inclusive options will never leave the hotel so they don’t buy outside, they do not eat outside, they do not drink outside.
[If you start] then the rest will follow naturally and not everybody is going to do it the way that you do it and it’s an access demand issue; once you do not have the strong demand then people will start to lower the rates like they have done in 2009 and 2010 and then you’ll go into these margin issues, you go into profitability issues, and you cannot deliver what the property needs to offer. I think it’s very dangerous for your brand.
Avsar Koc: I think the hesitation on all-inclusive relies on the fundamental reason behind the request for all-inclusive — that people want to know exactly how much this holiday is going to cost them.
Now is that detrimental to our business and the economy? I’m not so sure. But if you have it as an option, fine — it’s the customer’s world so you have to give them what they are looking for.
Having said that let’s talk about Dubai — in terms of F&B offerings, hotels in Dubai are superb in terms of variety and we all know that this variety doesn’t come cheap in terms of labour, products, etc.
I think the key word is your product because everything has to be imported. Yes, I’m sure there is a way to crack this, but when you do your P&L for your fine-dining restaurants it’s a difficult playing field.
AH: Look at the success of the cruise sector over the last few years; they have ridden on the back of this need to know how much money I am spending before I travel and it’s not just the likes of Royal Caribbean that have had this success, it’s the likes of Silversea that are hugely successful because the customers get a luxury hotel or cruise experience and they know how much they’re going to spend. If the customer wants that then why fight the demand?
Search our database of more than 2,700 industry companies
Apr 21, 2011 , United Kingdom
I think we need to stop comparing the Dubai all inclusive concept with hotels in destinations such as Egypt and Turkey. They are very different to aspirational Dubai and we should be looking at hotels in Mauritius or the Caribbean as a benchmark. Understandably, the tax and duty levels are diff...