Comment: How can hotels survive the fierce competition and the price disruption?

Comment: How can hotels survive the fierce competition and the price disruption?
Damir Boshnjak
Published: 13 October 2019 - 12:45 p.m.

In the UAE, while there has been undeniable rate pressure in the past five years, occupancy levels have shown resilience in shifting market dynamics. Based on STR data for Middle East hotel performance for Q2, 2019 has shown negative growth in RevPAR of 4.8%, where Dubai has shown 13.1% negative growth. Supply has now outgrown Dubai for six consecutive quarters. The same study shows that occupancy levels for Dubai have been the lowest since the time of the economic crisis in 2009.

You will say ok we know all these facts, but how can we sustain and what can we hoteliers do to survive?

Differentiate yourself, don’t just be another hotel that got forgotten in six months. I will use our hotel as an example and how we tend to be different. Breaking the barriers of traditional standardised hospitality, we created a new language and philosophical approach to a modern, current, 4-star hotel environment. Distinguishing ourselves as a boutique hotel and without the standard departmental organisation, at Studio One everyone is a host ready to provide guests with outstanding individualised service. Operating under the ethos of “Your way on your terms”- we put the guest in control of their stay rather than dictating how they should stay, thus really adapting the offering to the modern millennial traveller.

One of many examples is the Take One – a self-service pantry concept available to guests on each floor. Guests can help themselves to anything they might need during their stay. Take One is a unique concept that makes Studio One stand out. Another highlight of Studio One is its varied offering of social and dining venues; combining casual and premium dining concepts, guests will be spoiled for choice.
Another important area to look at is the marketing and how we reach our potential customers while understanding the megatrends that are impacting the Middle East travel and tourism industry and what can we do to respond to them.

One of the things to do is to move away from compartmentalised marketing to descriptive marketing – the guests want to hear a story; they want an experience! Then, the Gen Z and Millennials are no longer interested in the printed brochures, and their decisions are influenced by the social media. It is therefore imperative that hotels increase the importance of the social media presence. Lastly – digitisation. The infiltration of digital products is enabling travellers to gain more control over their actions and be more involved in the process of travel planning at their own pace.

Remember the A from the “ABC’s of housekeeping” – Away with the old! We cannot go on doing the same thing and expecting different results, when we know that there are more than 50,000 rooms in the pipeline in Dubai alone.

With more than 13 years of industry experience across five countries, the part-time film buff and full-time hospitality specialist Damir Boshnjak is the manager of Dubai-based boutique hotel Studio One.

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