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Dubai: Affordable luxury?

Dubai: Affordable luxury?

Hotels in Dubai are trying to lure guests with discounted rates. Will it work?

January 19, 2009 4:08 by

This time last year, hotels were bragging about their occupancy rates. Getting a hotel room was tough, and expensive. By the time August 2008 came around, ‘Dubai’s rates were the highest in the world,” said Anwar Abu Monassar, general manager of Net Group, a Dubai-based tour operator, in an interview with AME Info. “In just ten years hotel rates went from $50 a night to $1,500 per night. You can call it what you want – snobbery, crazy, very good, it depends on your point of view at the end of the day.”

Today, however, hotels are struggling to attract guests. Some hotels, like the Hilton hotels, are dropping their room rates by as much as 50 percent, although that might not be enough to encourage credit crunched vacationers to stay in luxury hotels.

As part of Dubai’s Department of Tourism and Commerce Marketing (DTCM), hotels are being encouraged to reduce their room rates by as much as 60 percent and their food and beverage prices by 25 percent. Furthermore, the DTCM has launched an international marketing campaign to attract tourists from Britain, Germany, India, China, Japan, Australia and the GCC.

Given the global recession, however, would discounted prices lure tourists to Dubai’s luxury hotels at a time when most people are hoarding their cash?

As for the sector’s future, Monassar does not think that it will ever be as strong as it was in 2008: “Hotels will not enjoy the same situation they had before, where they had high rates and they could sell whatever they wanted. In the future there will be more balance. Definitely not undersupply and not oversupply.”

Does this mean that Dubai will offer tourists “affordable” luxury like it used to?

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  1. L Kewley on January 20, 2009 8:42 am

    I feel even if Dubai drops the pricing on the room rates, it may lure some tourists to come see Dubai for a once off visit.
    Too many tourists and westerners are tired of the changes and limits they receive when in Dubai. for the money they are spending.

    You cannot plan a holiday in the hopes that pubs will be closed and maybe you can get to shops if the day is not made a public holiday, maybe you cannot enjoy your new year… people are rather going to go to a country where they are guaranteed to get their moneys worth.

    A stop over in Dubai airport will be sufficient for a visit..

  2. Jim Planton on January 21, 2009 6:05 am

    If they want to get large numbers of people to visit UAE it will take a change in plans, it is just not affordable to the mass market and the hotels all seem to be aimed at the luxury market….sooner or later the novelty factor will wear off.

  3. Binu on January 21, 2009 12:26 pm

    Obiviosly tourist inflow will reduce during recession. This year’s DSF 2009 will have a big blow due its recent changes in the visa issuing policies. The largest tourist visitors are from India for every Dubai Shopping Festival.

  4. Doug on August 11, 2009 1:01 pm

    It’s not the room cost that’s the issue (although that doesn’t help).

    The real issues are the cost of the F&B (which are universally sub-par quality), the lack of a tourist-geared taxi system (because drivers do not know where anything is), the price of shopping (typically 25% higher than in Europe, where you also pay VAT) and the lack of affordable or engaging leisure options (once you’ve paid through the nose for Ski Dubai and Aquaventure, all you’ve got left are polluted beaches).

    Dubai simply cannot offer anything over any other resort for the same price at this stage. No-one from Europe is going to fly for 7 hours to come somewhere that doesn’t offer much more than what they could access in 2 hours and until the entire tourism industry realises that the name ‘Dubai’ isn’t enough to draw people here, we’ll continue to see a parade of baffled hoteliers, leisure managers and retailers who simply cannot understand why they are not entitled to have thousands of tourists blindly spending their money here.


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