Middle East hotels need to compete on prices or lose out, say experts

The Gulf and Indian Ocean Hotel Investors' Summit (GIOHIS) 2018 will discuss a variety of issues related to the regional hospitality industry

Where will guests book their stay?
Where will guests book their stay?

The Gulf and Indian Ocean Hotel Investors’ Summit (GIOHIS) 2018 is set to debate industry issues including high prices and increasing supply of rooms, and how to find the right balance for investors, operators, marketers and guests.

Simon Allison, chairman of hotel owners’ group HOFTEL which runs GIOHIS, said in a statement: "International competition for tourists is higher than ever, so it is essential that Middle East hotels are able to compete on prices or everybody will lose out. This is a particular concern as more supply comes to the market, so we look forward to discussing potential solutions during GIOHIS."

With guests able to book direct or via OTAs, GIOHIS organisers believe that the opportunities for improving value are diminishing at both ends of the market – for investors and customers.

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Allison added: "The OTAs don’t own any hotel rooms and most of the brands you see on the building don’t either. However, the OTAs take hefty fees for each room booking and the brands take a slice of revenue and another slice of profit from the hotel owner.

"This increases the relative costs of rooms for customers and yet the owner’s margins are also small, meaning they can’t cut prices.  There are only two main OTA companies in the world and only a handful of global brands, so they have the concentration of power."

At a session entitled, 'Coping with downturns and disruptors - do the brands have the answers?’ panellists will debate whether brands can really manage to raise revenues or cut costs for owners in a downturn. Olivier Chavy, CEO of Mövenpick, and hotel owner Suchad Chiaranussati will be joined by senior executives from both Booking.com and Expedia to discuss solutions which meet the interest of all parties.

GIOHIS 2018 is set to take place on January 29-30, 2018 at the Yas Viceroy in Abu Dhabi.

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