Emaar's Alabbar on why he has a no-discount policy even when sales fall

Sharjah: Mohamed Alabbar, founder of Emaar Properties, says he will not discount his products even when sales slow down, arguing that price cuts betray the customers who bought first.

Speaking at the Sharjah Investment Forum in a session titled The CEO’s Playbook: Leading Through Constant Change, Alabbar said the no-discount-policy is part of how he does business. “I don’t give discounts. I don’t give breaks, I do business one way, I build on quality,” he said.

He justified the rule as simply being fair. “I cannot sell a cup of coffee to you, and then after four months, I sell the same cup of coffee at 50 per cent discount,” he said. In real estate, he added, a lower price for a later buyer means “I’m cheating you.”

But he accepts that this comes at a cost. “Our sales go down. That’s okay. Let it be,” he said, noting that Emaar has grown 40 to 50 per cent a year for the past five years and can absorb one slow year. Alabbar said the rule works only if the product justifies its price. “It’s not just, I don’t give discounts, just for the sake of not giving a discount,” he said, pointing to the company's focus on quality, location, service and value instead of just a price tag.

His reasoning comes back to reputation. “The only sustainable thing in life is your name,” he said, whether that is a family, a country or a company.

Alabbar said the numbers show confidence returning after the Iran-US war and the ceasefire that followed. Emaar recorded about 600 unit cancellations a month before the war. That figure doubled to 1,200 during the conflict and has since fallen below 600, while sales continue at roughly 4,000 units a month. Emaar’s sales backlog - the value of property sales yet to be recognised as revenue - stood at around AED 180 billion, while indicating its collection rate reached 98% like last year, recovering from a temporary decline during the regional tension.

He noted that hotel occupancies have risen above 60 per cent, and noon sees millions of customers every night, with basket sizes showing no hesitation to spend.

“The situation that we are in will pass. History has shown us,” he said. Emaar plans on a five-year indicative budget, adjusted every three to four months. If growth has to slow, he said, “let me lose money for one year.”

Alabbar, 68, went on to credits his restlessness for Emaar’s growth and says he inherited it from his father. “Me and my team, we live dissatisfied,” he said. “Growth is 40 per cent? No. Why not 50 per cent?”

That attitude extends to customers. Emaar now repairs homes that are 10 to 15 years old, even when the warranty has expired. “Because we make so much money out of you, I think, ethically, we have to give you back some of the money,” he said. He calls dissatisfaction “a gift” and describes himself as “a paranoid person” about his balance sheet, his team and growth.

He was candid about his own errors. “I think our investment in the US was emotional,” he said, adding that he lost money on it. Retail was another hard lesson. He spent 15 years in the sector without a profit, though he says it taught him design. His biggest regret is people. “I learned late to search for the best people,” he said, and he admitted to unfairness in the region's employers, “In the Middle East, we don’t reward people fairly.”

Alabbar urged business owners to adopt AI quickly. “If you do not adopt it, after 12 months it’ll be a challenge for your business,” he said, because adopters “will be smarter, faster, cheaper, more efficient.” He uses it for his health and to test project ideas, but he did reveal that his AI agent might not always back his business ideas.

His advice to young entrepreneurs was to follow what they love. “Just do what you love and just go for it. With no mercy, though, have no mercy,” he said. Alabbar said he kept changing direction until he was 37. “When you are passionate, and you put your time and effort endlessly, nobody can beat you.”