These are interesting times for the tourism industry. Even those of us who still have a job and can afford a holiday are starting to view time away rather differently. The more the banks wobble, the greater the bargains there are to be had and the more we want value for money.
No longer are we pathetically grateful that our booking can be squeezed in. The boot is on the other foot. We want the hotelier to acknowledge that we have deigned to select their establishment and reward us either with a good price or by pampering us to pieces. Or, preferably, both.
If you are paying the exorbitant prices at the Atlantis, for example, you do not want to be woken at 9am on a Saturday morning by an attendant asking what time you intend to vacate your room, as happened to a colleague of mine.
Of course, it all depends on market forces. Dubai has been one of the quickest destinations to react to the pressure of the downturn. With the pound sinking and much of Dubai's biggest market, Europe, officially in recession, something had to be done - and fast. The Dubai Department of Tourism does not want to revise its target figures for visitors and so instead they have encouraged a price slashing strategy. Most of the major Dubai hotels are currently offering half-price rates, and this week the Al Maha Desert Resort and Spa and the Harbour Hotel and Residence announced discounts of 60 per cent.
If that rate cut sounds enticing, however, you only need to look at what a 40 per cent discount means in terms of dirhams to conclude that it actually translates to no more than a dose of realism. The new promotional rates for the Al Maha start from Dh2,665 (US$7250), including taxes and meals, for a night in their Bedouin suites and The Harbour Hotel is offering studios for Dh832 ($226) and one-bedroom suites from Dh1,069 ($291), including taxes.
Abu Dhabi on the other hand has not changed its prices. Supply and demand here still favour the hoteliers - and the industry hopes that by 2012, when architects' drawings have metamorphosed into hotels and there are three times the number of beds, the economy will have improved and the status quo can remain. The Shangri-La reported a 77 per cent occupancy rate this month, for example, despite January usually being a slow period. The hotel will argue - with some justification given the high occupancy - that the prices reflect the quality of the service.
I reflected on such notions at the weekend when visiting another top destination - The Six Senses Hideaway in Zighy Bay, Oman - with three friends. The hotel's claims that it is currently 30 per cent full (although guests staying there last week who I spoke with estimated that the occupancy rate was probably much lower).
Zighy Bay was probably the biggest launch in this region last year. Six Senses has a formidable reputation and the location is nothing less than spectacular. With the Mussandum mountains for a backdrop and a soft, sandy beach reaching out to the calm waters of the Gulf, it is the perfect place to unwind. I love the rustic chic of its villas and would rather spend a weekend there than almost anywhere else in the region. But at what price? Even with a 30 per discount, which is on offer to anyone who utters the magical words "best available rate", one night in a villa costs about $2,000 (Dh7,010). The quoted rates don't even include a bread roll at breakfast.
For that money - and this is where a economic recession is a great leveller - expectations of good service are set high. So what sort of management, when two-thirds of the complex is empty, sends out its gardeners at 7am on a Saturday morning to wield a hammer and chisel on the palm trees outside the one villa that has four occupants? We would have called our personal butler, Teep, but the front desk had forgotten to switch the phones on. So Teep remained undisturbed and we endured a rhythmic banging for three hours. Or, when four people are sharing a villa, what sort of logic is it that thinks that two of everything - from tea cups, to loungers to glasses - is enough. As my friend remarked, "This might be Six Senses but they need a seventh one - common sense."
The in-villa dining is a nice idea but if you order a meal three hours ahead of an 8.15pm dinner then you don't expect it to come at 8.45pm. Hotels like Six Senses need to understand travellers' psyche - if the rate is right, such irritations become far less of an issue. If the rate is too high then they become all-consuming.
I will spare you the rest but, in the spirit of helpfulness, one of our party filled out the feedback form with great care. It had 18 individual complaints from broken lights to a confusing welcome. She did not even list her spa treatment. The therapist had a rag nail and my companion returned to the villa with red welts on her back. Would any of us go again? Yes but only if the price matched the service.
Norman Zweyer, the assistant director of sales, says that reducing the price is risky as they have to protect the brand."You cannot sell a Mercedes for the price of a Volkswagen," he says. Quite right. But one thing the traveller hopes will come out of the global recession is that hotels selling Mercedes don't offer a Volkswagen engine - unless it's priced accordingly.
sryan@thenational.ae
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Pakistan Super League
Previous winners
2016 Islamabad United
2017 Peshawar Zalmi
2018 Islamabad United
2019 Quetta Gladiators
Most runs Kamran Akmal – 1,286
Most wickets Wahab Riaz –65
Results
6.30pm: Maiden Dh165,000 (Dirt) 1,600m
Winner: Celtic Prince, David Liska (jockey), Rashed Bouresly (trainer).
7.05pm: Conditions Dh240,000 (D) 1,600m
Winner: Commanding, Richard Mullen, Satish Seemar.
7.40pm: Handicap Dh190,000 (D) 2,000m
Winner: Grand Argentier, Pat Dobbs, Doug Watson.
8.15pm: Handicap Dh170,000 (D) 2,200m
Winner: Arch Gold, Sam Hitchcott, Doug Watson.
8.50pm: The Entisar Listed Dh265,000 (D) 2,000m
Winner: Military Law, Antonio Fresu, Musabah Al Muhairi.
9.25pm: The Garhoud Sprint Listed Dh265,000 (D) 1,200m
Winner: Ibn Malik, Dane O’Neill, Musabah Al Muhairi.
10pm: Handicap Dh185,000 (D) 1,400m
Winner: Midnight Sands, Pat Dobbs, Doug Watson.
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
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What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
The specs
Engine: Dual 180kW and 300kW front and rear motors
Power: 480kW
Torque: 850Nm
Transmission: Single-speed automatic
Price: From Dh359,900 ($98,000)
On sale: Now
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding