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ATM Session: Hoteliers must not “dump” rates to secure business

Sophia Soltani by Sophia Soltani
April 26, 2016
in News
A A

With occupancy rates down and more supply set to join the UAE market, a presentation session organised by Hotel News ME, delivered by Rupprecht Queitsch, senior partner and CEO of INHOCO Group, provided hoteliers with the tools and tricks they need to use in order to increase market share as he discussed boosting business in trying times at this year’s Arabian Travel Market in the Showcase Theatre. image1(1)

Beginning his session, Queitsch, emphasised the importance of  each hotel fully understanding its desired target market and also identifying  trends in their field, he said: “Market knowledge is power – you have to be able to focus on the numbers – guests arrivals coming in, source markets, number of new hotels in the pipleline, number of competitor chains in your area and so on.”

Touching upon recent concerns in the industry regarding the decline in occupancy levels, he added: “You have to be able to scale the inventory – it’s no secret that we have seen a slight economic downturn, but we are advising people on the positives, 2016-2017 will be seen as a market stabaliser in many ways and by 2018 the pace will pick back up again.”

With the Middle East and Africa showing no sign of slowing in terms of upcoming projects in the pipeline, airing his concerns on supply and demand, he said: “There is more new inventory coming in at the moment, especially in the UAE – Dubai in particular, than the demand is growing – you have to be able to find a way survive, but dropping rates is not the answer.”

Stressing the importance of “maintaining” rates, he added: “Surviving in today’s testing market isn’t about dumping rates to secure market-share, you need to firstly look into what waters you are fishing in for business – especially when people in this industry are notrious for travelling and moving around. You cannot apply the same formulas in one marketplace to another, this all comes back to market-place knowledge.”

He added: “I caution all hoteliers and hotels, that as soon as you start cutting rates it becomes a downward spiral, you enter a dangerous game of charging 3-and-4-star prices for 5-and-6-star property facilities, how do you propose to break even that way?”

image3His next set of tips centered around revenue management and cost control, he explained: “When occupancies are low, you need to save money, and the obvious place hoteliers look to is the sales and marketing team and resources. You simply cannot cut the sales and marketing budget due to its instrumental role in driving business in low periods.  Sure you can analyse your costs, but for a change, take a look in less onvious places: Squeeze your chef on food wastage and management, get your procurement guts to barter with the supliers a little harder,  but the real deal is driving revenue through smart leadership and sales and marketing tactics – not by cutting these streams.”

Emphasising the importance of personalisation and “added-features” he said: “The days of selling a candle-lit dinner  as a bonus to your stay is long gone. People appreciate added values, such as breakfast, Wi-Fi, leisure facilities and dining discounts.”

On his final note, Queitsch stressed the importance of partnerships, he said: “Partnerships are crucial – you have to look for the right brand, supplier and partner. Don’t dilute your brand and your audiences for a “quick-fix: deal, you have to match your brand with your partner, people then build associations with your hotel brand and the company you put in front of them.  Fundamentally, these two factors have to match.”

Tags: ATMATM 16ATM 2016HotelHotel News MEINHOCOINHOCO GroupRupprecht Queitsch

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