Dubai hotels have been lining DMCs' pockets in a desperate bid to claw back business, a well-known hotelier has revealed.
Dubai hotels have been lining DMCs’ pockets in a desperate bid to claw back business, a well-known hotelier has revealed.
At least three major hotel groups are offering overrides as incentives to destination management companies (DMCs) for volume bookings, which will inevitably force other hotels to follow suit, argued Movenpick Hotels & Resorts’ new business development director, Guy Epsom.
“They are offering overrides to secure business, which is not a good situation, because it means everyone has to follow suit, putting us in a vulnerable position,” he told hoteliermiddeleast.com
“The only winners in this situation are the DMCs.”
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However, he did state that with market conditions proven tough in 2009, the DMCs themselves had been forgoing their 5% margin to pass on better rates to their customers.
But rather than discount and drop prices to fill rooms, Epsom said a more sustainable strategy was to offer customers extras as a bargaining chip and to differentiate your hotel by providing exemplary service standards.
Epsom, the former Hilton Hotels regional director of sales and marketing Arabian Peninsula and Indian Ocean, was speaking to hoteliermiddleeast.com as he predicted an over supply of hotel rooms in 2010.
He claimed that market conditions in 2009 were such that hoteliers would still be suffering the effects in 2010 and that the additional 7000 rooms across 18 hotels that were set to open in Dubai next year would only add to the problem.
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Nov 6, 2009 , United Arab Emirates
The table is turning! DMCs suffered so much due to hoteliers 'take it or leave it attitude' which with their exhorbitant rates caused Dubai to lose so much business. DMCs had to reduce their margins and often had to give away their commission to secure business. That's one of the reasons why the ...
Nov 4, 2009
Dubai will benefit long term from an over supply of available room nights. There are many comments on here and elsewhere within the industry about poor quality of service from Hoteliers who do not have to work too hard for their dirham. Over supply will enforce training and motivation.