The hotel sector in Dubai will need a complete re-positioning in order to continue to be successful over the coming decade, according to the hospitality division at international consultancy Drees & Sommer.
Driven by the evolving economy, increased hotel supply and the consolidation of the average room rate witnessed in the Dubai market, hotel owners and operators alike will need to shift from a revenue-driven strategy to a cost-driven strategy, says the firm.
Filippo Sona, managing director, global hospitality at Drees & Sommer, is calling for a re-positioning across three main aspects of the hotel industry in Dubai: business models, physical assets and brands.
Sona, who was recently appointed a member of the International Society of Hospitality Consultants, says: “It’s time for hoteliers to re-position and reinvent themselves. The main issues surround the business model. For example, staff accommodation, currently provided by hotel owners in Dubai, is a massive cost that is neither sustainable nor necessary. It will become obsolete. This is for two reasons.
“Firstly, Dubai’s residential market is stable but expanding, and there will be units coming online that hotel employees can afford to rent. Secondly, the trend towards outsourcing hotel services, from security to housekeeping, is growing and coupled with developments in technology that will make hotel operations more efficient, hotels will require a smaller workforce in the future.”
“However, such dramatic change to well-established business models requires a huge shift in mindset and this will take time. It will be a gradual re-positioning, but one that needs to start now and take place within the next 10 years,” explains Sona.
When it comes to brands and physical assets, hotels that were built prior to 2010 will need to be repositioned in order to compete with the new supply coming online. According to STR’s latest data, there are 427 hotels accounting for 123,742 rooms in construction in the Middle East, with 54,438 (31.8%) of these rooms in the UAE.
Sona added that the profile of Dubai’s hotel general managers will also change over time.