Hotels seek to satisfy low budget travellers

Hoteliers in Dubai are beginning to realise that not everyone can afford to fly to the moon.

The Teatro restaurant in the Rotana Towers Hotel, Dubai, where diners can get 50% off their food before 8.30pm.

DUBAI // Hoteliers here are beginning to realise that not everyone can afford to fly to the moon. In a sign of the times, they are hearing increasingly loud cries for wider variety of accommodation to suit tourists on different budgets. Five-star hotels have already responded by offering discounted meals and special deals to drive up customer numbers. Some have slashed room rates by up to 60 per cent since November.

The upshot has been a drop in hotel revenue of more than 25 per cent compared with the same period last year, according to the travel research firm STR Global. Maggie Moore, director of the Hotel Show trade fair, which kicks off next month, said there would be more three- and four-star brands coming to Dubai in the future. "So far Dubai has just gone into one market, that of luxury hotels, but they cannot all be five star," she said. "The emirate is now looking at addressing that balance. The more a holiday destination caters for a variety of needs, the more successful it will be. There is no doubt hotels have been affected by the credit crunch."

Cashing in on the appetite for low-budget rooms, the two-star Ibis chain, which already had two branches in Dubai, has doubled the number of its hotels. A Barsha outlet opened two weeks ago while a branch in Mall of the Emirates - traditionally the domain of more upmarket hotels like the Kempinski - is due to open in June. Similarly, Holiday Inn increased its city outlets fourfold last year by adding Express hotels in Jumeirah, Media City, Safa Park and Barsha to its original site in Deira. Starwood Hotels operates a four-star Sheraton in Bur Dubai.

Yesterday, Ibis was offering rooms for Dh340 (US$93) and Holiday Inn had availability including breakfast for Dh420, a small fraction of the Dh3,000 charged for a night's stay at the Ritz-Carlton or the Dh6,300 for a deluxe king suite at the Burj al Arab. Ms Moore insisted there was still a market for both, but said Dubai could learn a lesson from Abu Dhabi, which has long offered a range of hotels with different star ratings.

"They are not all five star in Abu Dhabi and now Dubai is looking to follow suit with a three-star level," she said. But she added: "This is still one of the most vibrant regions in the world. Within the UAE tourism is very important, and there is still a market for five-star hotels here. Abu Dhabi, for example, has a shortage of rooms and will see seven hotels opening before the Grand Prix. "In Dubai too, we will see five stars like the W and Four Seasons opening. These operators are going to be more aware of achieving a bottom line in service management."

The three-day Hotel Show, which takes place from May 24 in Dubai World Trade Centre, will focus on how hotels can compete in an increasingly tough market. One area in which Dubai is already ahead of the game is food and drink, according to Ms Moore. The Friday brunch has long been an institution, with limitless buffets and drinks offered for a set price. But increasingly, hotels have begun offering food and drink packages throughout the week to reel in customers reluctant to pay for restaurant meals.

The Westin has a Monday night special in the Spice Emporium where diners pay for their drinks - but when it comes to the meal, they only have to pay what they think it was worth. And on Sundays, the Hunters Room and Grill offers a three-course meal with unlimited drinks for Dh375. Le Méridien reportedly introduced a Dh99 discounted lunch in a number of its restaurants and a Dh99 evening buffet in its Yalumba diner after witnessing a 15 per cent slump in mid-week business.

And both Teatro and Spectrum on One restaurants are slashing up to 50 per cent off the cost of the food bill at certain times of day. Alain Ruivivar, who helps run Teatro restaurant in the Towers Rotana hotel, where early diners enjoy a 50 per cent discount on food until 8.30pm, said: "In Dubai there are a lot of competitors, all offering their own promotions, so we started giving this discount to ensure people come into the restaurant to eat.

"When deciding where to go, diners look at the food and then the price, so it has made a difference. It is very popular and we have regulars who come back for the specials, such as our signature salmon dish, which is normally Dh95 but half price for the early birds. "For families looking to save money in times of a credit crunch, it is a huge help." The reduced-price dishes range from pizzas, normally priced from Dh56, to the most expensive speciality on the menu, a Dh135 plate of marinated grilled hammour.

The conference will also encourage hoteliers to look at improving their spa facilities. The hotel spa industry is worth Dh2.3bn annually in the Middle East with 40 per cent of that figure - equivalent to nearly Dh926m - generated by the UAE alone. "There is a very strong spa culture here, and when people go on holiday, one of the things they do to treat themselves is to have a spa treatment," Ms Moore said.

"While hotel managers understand the lucrative potential of food, drink and conferences, they have not always understood about spas," she said. "It is one way of differentiating yourself. One hotel, for example, is looking at thalassotherapy treatments. "In today's economic climate, hotel operators cannot afford to have facilities that are not productive. The summit will help them by addressing the different types of spa, trends and how to market them. If they do so at reasonable rates, they will benefit."

Of the 61 hotels due to open across the Middle East by 2010, 35 are in the UAE, according to the research firm Proleads. Ms Moore said: "With thousands of new hotel rooms coming on stream over the next two years, the hospitality industry will need to focus on standards and value for money for customers." Last year nearly seven million travellers stayed in Dubai hotels but Dubai's department of tourism and commerce marketing, which encouraged hotels to reduce prices by up to 60 per cent during Dubai Shopping Festival, is hoping to increase the number to 15 million by 2015.