One of Virgin Holiday's best performing hotels in the UAE is the Hilton Resort and Spa in Ras Al Khaimah.
One of the UK’s biggest tour operators has warned Dubai hoteliers that unless they become more flexible with their pricing, they will continue to lose out to more accommodating destinations.
“My message to hoteliers is that we really want to focus on Dubai, but reduce rates more, make your F&B cheaper and offer all-inclusive packages if you want to sustain and grow volumes from the UK market,” said Glenn McCool, regional product and contracts manager at Tui’s specialist division, which includes brands such as Hayes & Jarvis, Thomson Tailormade and Travelmood.
“All-inclusive always sells well, but even more so right now due to the economic situation – in fact 80% of all bookings for hotels offering this option, such as those in Mauritius and the Maldives, are for all-inclusive packages.”
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McCool also cited success stories closer to home with hotels in Ras Al Khaimah and Fujairah securing long-stay business by offering all-inclusive deals.
“In contrast, Dubai is a stopover or short-break market,” he said, naming the lack of all-inclusive deals, high room rates and expensive F&B as the main culprits.
He noted that Dubai room rates had come down by around 25%-35% compared to peak 2008 prices, but accused Dubai hoteliers of being inflexible when it came to pricing structures.
“A market like Egypt, for example, is much more reactive to market demands,” he said.
As a result, Egypt was stealing market share from Dubai in the winter and summer sun stakes as was New York as a weekend break option, he added.
McCool said that long term, for Dubai to remain competitive and to fill the number of rooms coming online, prices needed to come down a further 50-60%.
“I can see Dubai having to become a charter market in order to get the volumes it needs,” he noted.
McCool’s comments echo the sentiments of Virgin Atlantic sales and marketing director Paul Dickinson who in a recent interview with Hotelier’s sister publication, Arabian Travel News, said more needed to be done to persuade British consumers that Dubai offered value for money.
He revealed that one of Virgin Holidays’ best performing properties in the UAE was the Hilton in RAK, because it offered all-inclusive packages.
“The question is, can other hotels in Dubai work on this all-inclusive basis,” he said.
McCool said the only hope on the horizon was that Movenpick Hotels & Resorts planned to offer an all-inclusive concept at the group’s forthcoming Royal Amwaj property on Palm Jumeirah (see www.hoteliermiddleeast.com), due to open in Q3.
“If this premium all-inclusive package goes ahead, it will sell exceedingly well,” he concluded.
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Feb 3, 2010 , United Arab Emirates
Agree that hotel rates (both, accommodation & F&B) need to come down from their lofty perch. However, just to add a slightly different perspective; I would be happy to see room rates come down another 25% but certainly not to the extent Mr McCool suggests. As a hotel & travel professional with cl...
Feb 2, 2010 , United Arab Emirates
This is nothing new, when will GCC Hoteliers ever learn? For a long time now you could fly from continental Europe and stay in one of the 5* Hotels in Dubai for a week for far cheaper than we could book a two night stay as locals here in UAE! Madness The Hoteliers are going to have to eat humble ...