Cost-conscious travellers turning to budget tourism

Dubai:  A burgeoning budget tourism market is slowly growing beside Dubai's luxury image with the launch of a number of budget airlines and no-frills hotels.

The concept which wasn't well known in the region is now starting to gain ground, making Dubai more accessible to a wider range of budgets.

The demand for lower costs can be seen in the discounts being offered in the high-end hotels. According to Caroline Bremner, global travel and tourism manager at Euromonitor, discounting promotions and sales were seen across the hospitality board.

"With the much touted end of conspicuous luxury in the West, coupled with general wealth and the global meltdown, groups and businesses have revived their interest in value for money," she said in a seminar at the ATM.

According to Ainsley Duncombe, co-founder and director at lowcostdubai.com, the need for low cost tourism products was proven by the instant popularity of his website which specialises in sourcing and promoting low-cost deals.

"The website was started by a group of residents who wanted a one-stop shop where we could get more value in accommodation, dining, activities etc. While we're very new, we have already noticed web views from 57 countries which demonstrates the widespread interest," he said.

A maturing tourism market in the UAE has led to a more segmented market, according to industry experts.

"As the Dubai tourist market grows more competitive, more services appear, looking to offer better value. Dubai has had that glamorous image, but the market is maturing and as with other high-end destinations they have built a multi-tier tourism industry suitable for all budgets,' said Duncombe.

According to Marko Hytonen, vice president of the Rezidor Hotel Group, the need has also come out of a growing middle class in the region. "The moment there is a middle class tourist market, you need something to accommodate this purchasing power," he said.

Budget offers have attracted a wide variety of people, not just those from the lower income bracket.

"We see business people, workers and tourists. But we also see a lot of new customers. One third of people are travelling more often than they would otherwise because of the low cost. If you can give people a cheap way of travelling they will travel more often," says Gaith Al Gaith, CEO of flydubai.

The new low-cost offers are also popular with business travellers as companies look to cut back on travel expenses.

"Around 58 per cent of our clients are businessmen and the remainder are leisure travellers. We get a lot of customers from cost interest companies who want to have the best value in town," said Christophe Landais, managing director Middle East at Accor Hospitality.

Budget airlines in Europe are able to give away seats for nearly nothing. However Al Gaith said that while airlines here are doing their best to offer the lowest price possible, it all depends on the volumes.

"We're not there yet because the volume of flights available is not as much the volume of customers. We were the fourth airline in the region that has absorbed the low cost segment, but we need more travellers in order to be able to offer a lower price," he says.

While new low cost options are available, Landais emphasises that budget doesn't necessarily mean cheap.

"The idea behind the Ibis concept is to provide a living that has all the products and comforts you can see in any other hotel but at a lower price. This is achieved by cutting back on services.

"For example, room service is shortened, food and beverage offerings made more simple, etc," says Landais.