Dubai hotels counter low room rates with iftars

Dubai hotels are lowering rates and ramping up iftar promotions to try and counter low occupancies over the hot summer season, The National reported.

Average room rates at hotels have already fallen 6.4% so far this year, according to Chris Hewett, associate director at TRI Consulting.

Capacities for iftar buffets have increased over last year, and some hotels are lowering rates further to try and draw in guests.

Amwaj Rotana, Jumeirah Beach has increased its iftar capacity to around 200 people, up 22% on last year.

The hotel has also introduced its lowest room rates ever, starting from AED 199 (US $54.18) if booked online until October 3.

“We monitored the trends and saw the demand for iftar, and [decided to lower rates now as] we have more hotels and new ones coming up,” said Jasmine Arika, director of marketing and communications at Amwaj Rotana.

Average revenue per available room for the next three months at hotels in Dubai Marina is expected to fall 4% to $138, Colliers International said.

The most significant RevPAR decline in Dubai is predicted for Palm Jumeirah located hotels, where a 13% drop to $204 is expected.

Ramada Downtown has also dropped its rates further this year, with rooms around 10% cheaper than they were in 2014 for the same period.

“We are giving away free night stays [for visitors from] Eastern Europe and India, both of which are new markets for us,” said Samir Arora, general manager.

JW Marriott Marquis has also increased the capacity of its iftar to 700 people from 600 last year.

It is also slashing food and beverage prices by 50% to cope with lower sales during Ramadan.

"The summer will be a real test,” said Bill Keffer, general manager of the hotel.

“There is not too huge a rate decline this year compared to the last [for the property]. There might be some in July and August.”

Hoteliers say the decline in Russian tourists, which was initially felt in the beach hotels, is now trickling down to affect city hotels as well.

“The beach hotels then tend to go after new markets, and that affects us,” Keffer said.

“With new supply coming into the market, there is more challenge around the rates – but Dubai is a resilient city.”

Average daily rate in April fell 12.8% year-on-year across four- and five-star properties to $373.78, according to TRI Consulting.

Food and beverage sales plummeted by 19.8% and 26.7% respectively, during the same period.

“Food and beverage revenue was lower [in April] because of the reduced spending power from in-house guests who likely opted for more affordable options outside of the hotels,” said Hewett of TRI Consulting.