Dubai hotels chase guests using summer deals

Occupancy levels in the emirate in the first five months of the year fell by 13.1%, the report said, while RevPar declined sharply by 35.3% when compared to the same period in 2008.

The steep drop in RevPAR is due to the fact that many hotels have been forced to reduce room rates to attract guests, said Rob O'Hanlon, a partner at Deloitte Tourism, Hospitality and Leisure.

'In Dubai, new supply continues to come online at the same time that the market is seeing a slowdown in demand, so you've got a double hit there,' he said.

'A year ago hotels were in a particularly dynamic situation where there was high demand and tight supply, but the overheating of demand is over and as a result I would suggest that room rates are normalizing,' he told AME Info.

New offers

To meet this new challenge hotels in the emirate are taking a variety of approaches to attract guests. 'On one hand we are seeing new properties coming into the market and trying to get their message out there, and one of the tools they are using is deep discounting,' he said.

'Meanwhile, some of the more established properties have been able to leverage the track record they have built up with their clientele and the value of their international brand to try and hold their rate, and deliver value in other ways, such as additional nights free and other add-ons.'

Looking ahead, the hotels that face the most difficult hurdles are the unbranded local properties, he predicted, because gone are the days when supply was tight and guests came looking for you. 'It's easy to make money in good times, but now you will really see the value of good brands and good management,' O'Hanlon said.

Name your price

The Monarch Hotel in Dubai is one non-branded property that has found an innovative way to compete with the major hotel chains in the emirate. The hotel has devised an auction programme called 'name your price for luxury', which allows guests to bid for rooms, meals and spa treatments.

Guests even have the chance to bid for the hotel's ultra-luxury offering, The Monarch Suite, which is normally priced at Dhs49,000 ($13,350) a night, said Werner Pichler, Director of Sales and Marketing for The Monarch.

'We are a stand-alone hotel competing with the big international players. For that reason we have to be more innovative and creative,' Pichler said. 'We don't have the international marketing support which these groups have, so that is why we tried this concept that no one else in town has tried.'

Pichler said the auction will continue until the end of September, but may carry on longer depending on how successful it is.

Meanwhile, more than 70 hotels in the emirate are taking part in a 'kids go free' initiative that was launched for the summer season by Dubai's Department of Tourism and Commerce Marketing. The offer, which is being promoted across the globe, includes free accommodation, meals and entry to attractions for one child under 16 who is accompanied by two adults.

Year-on-year discounts

At the same time, some of the most high-profile (and high-priced) hotels in the emirate are offering steep discounts to lure guests, including Raffles Dubai, which is offering a special summer rate of $231, well below the $408 special rate that it offered during the same period last year.

Cut rate deals are also being offered by the Atlantis hotel on Palm Jumeirah, which has slashed its rates to as low $218 per night for the summer, which is less than half of the $450 rack room rate that the hotel charged when it opened last September.