Rates spat escalates

DMCs get shirty with 'Utopian' hoteliers

Travel, Comment, Hospitality trends, Hotel, Room rates

November was the month when the ongoing debate over Dubai hotel room rates reared its ugly head again.

Frederic Bardin of Arabian Adventures fame got on his soap box and declared that hoteliers in the emirate were still being unrealistic about the rates they charged.

He said although the recession had gone a little way in tempering the rampant overcharging at hotels across Dubai, there was still a long way to go and that instead of acknowledging the changes in market conditions, hoteliers were living in Utopia — clinging onto the rates that they charged back in the good old days when the boom was in full swing.

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Bardin implied that hoteliers were being greedy, an argument that extended beyond room rates to “overpriced F&B”.

One can fully understand Bardin’s point of view.

Such extortionate rates price Dubai out of the market from both a corporate and leisure travel perspective.

Even during the economic crisis, room rates in Dubai have been some of the highest worldwide, second only to those in Moscow, making the emirate uncompetitive in the international arena, particularly where MICE business is concerned.

With corporates slashing budgets or not wanting to be seen spending cash on travel, Dubai would surely be low on their agenda when selecting a destination for their meeting, conference or incentive?

Bardin can’t really win as during the boom time, the growth of both Arabian Adventures and Congress Solutions International was stunted due to short supply of hotel rooms.

Now, at least rooms have freed up, but with rates still higher than average and travellers spending more cautiously, it’s not exactly a doddle to win business.

One would hope that the forces of supply and demand would come into play — they did during the boom time when strong demand versus limited supply forced up prices, so let’s hope the 7000-plus rooms that will open their doors in Dubai next year will sort out the room rates once and for all.

And let’s not forget the angry consumer. Comments posted online in reaction to Bardin’s argument reveal people are fed up with being overcharged, particularly when they don’t get value for money in terms of service and quality.

Not only that, but hoteliers should realise that residents of the UAE were not born yesterday.

When you look at the bargain rates tour operators in the UK are charging for five-star packages to Dubai and compare them to what you pay as a local, it’s criminal.

As the internet makes pricing evermore transparent and comparisons easy to make, hoteliers need to sort out their rate strategies once and for all.

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