Interview: Dubai hotels bank on post-war boom

While occupancy levels in most of Dubai's 272 hotels still remain low, some have already made plans to cash in on the post-war reconstruction in Iraq that is expected to bring increased business to Dubai, including the hotel sector.

As expected, engineers, planners, businessmen and decision-makers are expected to travel to Iraq via Dubai and Kuwait, which comes as welcome news to the region's aviation and hotel industries.

Most airlines have announced that they are either resuming flights to major destinations or increasing capacity. While some of the European carriers are still maintaining a 'wait and watch' policy for Kuwait, they are, however, increasing their capacity to Dubai.

Meanwhile, some Dubai-based shipping and logistics operators have begun helping the UN to transport humanitarian aid to the Umm Qasr port, and many other companies are waiting for the green signal from Baghdad.

Dubai will thus remain the major connecting point for Western businessmen and officials which will help the local tourism industry to regain some of the business lost due to the war.

In an exclusive interview with Gulf News, Shujaat Yar, business development director of Le Meridien Dubai, said that good times are ahead for Dubai's hotel industry.

Excerpts:

What makes you confident about the post-war boom?
We certainly foresee a post-war boom in Dubai. Dubai, in general, has a very positive outlook. Business must go on.

The combined efforts of Dubai's public and private sector will bring about an unprecedented increase in the number of visitors to Dubai. The state-of-the art infrastructure and facilities as well as the varied activities Dubai offers are second to none and Dubai has established itself as the most preferred business and leisure destination in the region due to its strategic geographic location. People who have postponed their trips will certainly come back in larger numbers then ever.

Apart from the Arabian Travel Market, which will attract travel professionals, the impressive recreational facilities and development plans such as Dubai Summer Surprises, and the annual IMF/World Bank Conference will contribute towards the increase in leisure and business travellers.

The Department of Tourism and Commerce Marketing and Emirates airline have played a key role in promoting the tourism industry in Dubai to regional and global audiences. The 26 per cent increase in Emirates' capacity and the addition of new destinations to its growing network will take business in and from Dubai to greater heights.

What about SARS? How is it affecting your business?
The health concerns in South-east Asia will divert a fair amount of traffic into Dubai. The WHO advisory against travel to certain Southeast Asian countries will have an impact on traffic to these places. It seems this is the first time such a travel warning has been issued by the WHO. The influx of travellers from Gulf countries to Dubai is certainly going to begin shortly.

What are your views on the current market situation? What are your plans to regain business?
Our contingency plans were in place much before the war began as we anticipated changes in our business mix.

We had to reshape our business strategy to minimise the impact of the current situation. Our team has clear directions on the objectives, focus areas and competition date of the tasks in hand.

We were closely monitoring the progress and the changes required, in line with the needs of our business objective. Some primary markets were harder hit compared with others.

In any business, planning for opportunities is a normal way of growing and planning against the possible threats to business is another important aspect of the hotels marketing plan.

During these challenging times in the hospitality and travel industry, we have planned certain marketing strategies with our key partners. This is to reinforce that business is as usual in Dubai.

We will be hosting key industry people from various segments in our hotel as part of the combined strategy. This is also to stress that Dubai is a safe destination and unaffected by the current situation with business activities going on undisturbed.

Several organisations including hotels are going through a staff redundancy process. What has been your course of action?
In situations such as the one we are in currently where business is soft compared with the previous years, making your staff or team players redundant is not necessarily the best solution.

We are very proud to have 750 service-oriented team players. It is our firm belief that our team's involvement is crucial in maintaining our consistency in meeting customer expectations and managing a profitable business.

Redundancy of employees de-motivates them and a de-motivated member of your team is not going to give his or her best. No guest will accept 'lesser service' due to soft business conditions. A motivated team meets and exceeds guest expectations. This also brings about longevity of staff in an organisation.

Of course, one has to be vigilant for opportunities to maximise revenue and reduce expenses in a soft market condition but reducing the staff in service areas can have a negative impact in the long term.

Many hotels are coming up with massive discounts to attract guests. Have you slashed your prices?
Lower rates do not necessarily create demand, especially at times like this. Cheaper hotel room rates are not persuasive enough to make people travel more.

We have not reduced our prices. However, there are certain value-added promotions and campaigns in various markets which are in place. We have been in discussion with our key partners prior to the war for the planning and implementation of the promotions and campaigns for the months of May and June, which will be implemented as planned. In times like these, 'backyard marketing' has paid off well.

Our team was in the GCC countries before the war. This exercise has been beneficial and proves that it is better to be proactive than retroactive.

How are the restaurants faring?
We have maximised our F&B sales by increasing our market share of the local residents.
Our food and beverage loyalty card has been highly effective in creating customer loyalty. It offers great value for money and recognition.

The edge we have with our loyalty card is the fact that it can be used in 20 Le Meridien Hotels in the Middle East. A customer today is looking for recognition apart from food and service, which is what the loyalty card offers.

Has the competition increased in the industry?
Certainly it has but it has had a positive impact. Healthy competition is good for the industry. It offers guests a choice and it also makes hotels innovative and service-oriented in order to stand out.

The choice and quality of hotels in Dubai is unparalleled in comparison with any other city in the region.