Panicked revenue managers at Doha hotels have been urged to avoid resorting to "dirty tactics" such as undercutting as an influx of new rooms come online in the city.
By the end of 2012, rooms supply in Doha will have increased a record 20% on 2011's 10,000 rooms count, according to research by TRI Consulting.
Speaking at a Hotelier Middle East revenue management workshop held at the Grand Hyatt Doha, workshop leader Anita Markiewicz, vice president revenue management - Middle East and Asia for Moevenpick Hotels & Resorts said the general feeling among hoteliers was one of "fear".
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"We're all scared of what's going to happen as more hotels come online in Qatar," Markiewicz said.
"The first thing the general managers say when they present the budget is 'how will the increasing number of hotels affect us?' They're thinking about the forecasting and pricing, and we revenue managers are thinking 'how low can we go'?
"When the forecast isn't coming in or the bookings are behind, panic can set in," she added.
In April, TRI Hospitality consultant Christopher Hewlett said Qatar hotel average daily rates (ADR) are projected to slump as supply outstripped demand.
“ADR will be the first casualty as more hotels come online,” warned Hewlett.
However, experts at the event warned that slashing rates would “hurt” the country’s hotel industry.
“We need to believe in premium-level rates in Qatar, there is no reason rates should be too far behind Dubai. We have to be somewhat bold as we look ahead and it’s a nervous time. But we have to hold on,” commented Simon Casson, regional VP and GM, Four Seasons Hotel Doha.
“Over the past five to seven years Qatar has done a good job of bringing rates from up from US $150 dollars to $300 dollars a night, it’s important not to take too many short-term decisions that will hurt the market,” he added.
W Hotel Doha & Residences general manager and area manager – Qatar Safak Guvenc said dropping rates should be a last resort for hotels.
"Dropping the rate is the last thing you should focus on, instead you should focus on personalised service," added Guvenc.
One revenue manager attending the workshop said: "The hotel newcomers have one technique - they undercut the price. How do we react?"
Markiewicz answered: "Hotels that enter the market at a low price find it harder to bring it back up - it's not a good strategy. The higher the occupancy, the higher the operating expenses. Maintaining your rates must be seen as an investment".
She recommended hotels stick to a "wish, want and walk" rate: "The walk rate is the lowest you will go without further discussion".
Rates for a King-size room start at QAR 640 per night at the new InterContinental Doha The City and at QAR 615 at the new Hilton Doha (as checked at 10:44am on June 13 for one night's stay on June 20).
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Jun 13, 2012 , USA
I do not consider staying competitive by lowering room rates as "Dirty Tactics". It is purely the law of Supply & Demand. The top tier hotels like "The Four Seasons" will always dictate their ADR because they will always have their wealthy customer base. But a lot of the others like the 2 menti...