It was that dark last quarter of year 2009 when the global financial tsunami took its toll on the United Aarab Emirates economy. Whilst there were lot of jobs to be lost, so was key business. And one of the sectors that took the brunt of the financially volatile environment was the Emirates’ hospitality sector. Despite being highly successful and the source of millions in revenue, the hotelling industry in Dubai alone experienced occupancy rates of hotels falling by almost 13%, and the revenues plunging a massive 35%. However, 4 years on, readjustment strategies have paid off and the revenue windmill has started churning again.
The Topsy-Turvy Goldmine
Understand that a country that has achieved much in 40 short years, the hotelling sector has become one of the key areas it relies on for foreign cash influx, in addition to the oil & gas sector, which usually remains economically undeterred. Hence, the hospitality industry is to the UAE what Wall Street is to New York; a key economic benchmark. Any topsy-turvy revenue movement will reflect majorly on overall economic stats.
To counter the losses incurred, the hotel industry in Dubai lowered its average rates to attract a larger number of tourists, making it a cheaper destination to take a vacation in. And it just seemed the right strategy, since European vacationers started avoiding traditional vacation spots like Greece owing to political and fiscal instability.
The Eventual Destination: Customer Acquisition
While growth remained comparatively slow, the strategy started paying off and the increasing number of customers showed it. The key differentiator was that the Emirati hotels started adjusting their branding to elite and affordable, and that grabbed the attention of those that were willing to escape the European financial turmoil, for a far-off destination with serenity and luxury – a world away from their world of stress, to rejuvenate and replenish the spirit.
Dubai has become a greater battleground for capturing globetrotters. Hotels in the capital city, Abu Dhabi, though suffered, but a much lower rate, owing to the large number of business travelers that still had to make frequent trips.
At this point in time, the hotel boom is back in full-swing, with companies like Four Seasons and The Oberoi planning to set-up shop in a sector that is expected to hit $7.5 billion by 2016.