Premier Inn sees 'huge opportunity' in Gulf

While many hotel chains in the Gulf are dreading the impact of the global economic downturn, Premier Inn, while not exactly welcoming a recession, is confident that it can weather the storm.

'When there have been recessions in the UK we have seen our occupancy increase,' said Darroch Crawford, Managing Director of Premier Inn in the Middle East.

'We think we are well positioned if there is a softening in the [Middle East] market.'

Dubai already experienced a slowdown this summer, Crawford believes, as some hotels were forced to offer 'rock bottom prices' to boost occupancy.

The emirate has built a reputation as an upscale tourist destination that offers some of the most luxurious (and expensive) hotels in the world.

However, there is a huge opportunity in this market because 'less than one percent of hotels in the emirate are budget hotels'.

Most visitors to Dubai come from Europe, especially the UK, which has been hit hard by the financial crisis. Many of these travellers are going to be looking for bargains the next time they travel to the emirate. 'The economic downturn has created a huge demand for value for money that has not been there before,' he noted.

Regional expansion plans

Premier Inn is by far the largest hotel brand in the UK, with 556 hotels and 38,000 rooms.

Earlier this year the company opened its first hotel in the Middle East - and first outside the UK - at Dubai Investments Park, with locations in Dubai Silicon Oasis and Dubai International Airport set to open in May and November 2009, respectively. An additional two hotels in the emirate are in the works at Dubai International Airport and Al Jadaf.

Premier Inn has more locations planned throughout the emirates and the Gulf, and its long-term goal is to build 80 hotels over the next 10 years in the region. 'We intend to be in every major city in the Middle East,' Crawford said. 'We want to become as dominant in the Gulf as we are in the UK.'

Value for money

Premier Inn boasts that it offers four-star quality at a two-star price. For Dhs495 ($135) per night, including tax and service, customers get a king size bed, work desk, 32-inch plasma TV, and free internet access throughout the hotel. Each hotel also has a Costa Coffee shop, an in-house bar and lounge, and a swimming pool.

As an added value, up to two adults and two children can stay in one room at no extra cost. 'We don't charge you for things that you might not use,' Crawford said. 'Comfort and a good night's sleep are what we offer.'

Premier Inn also touts the fact that it owns and operates all of its hotels, thus helping to ensure a level of consistency among its properties. 'We provide the same room wherever we go,' Crawford says.

Eighty percent of Premier Inn's customers in Dubai are on business travel, and their average stay is 11-12 nights, which is longer than the average stay of guests at its hotels in the UK. Most guests in Dubai are expatriates from within the GCC, but an increasing number of locals, especially Saudis, are now staying for short breaks.

One challenge that Premier Inn faces in the Gulf is the negative perception of budget hotels in the region. 'When people think of 3-star hotels in the Middle East they think of a down-market property,' Crawford noted. He believes the concept will gain wider acceptance as more high-quality budget hotels are launched in the Gulf.


See also:
Gulf tourism faces challenges from economic slowdown
Low cost carriers fly high in the Gulf