Walk the talk

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Nasser Fawzi, Director of Sales & Marketing, Kempinski Hotel Mall of the Emirates.

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Tareq Daoud, Director of Marketing, Grand Hyatt Dubai.

With Dubai hotels fighting for custom, the pressure is on the emirate's sales and marketing professionals like never before. In a lively roundtable hosted at one of the stunning ski chalets at Kempinski Mall of the Emirates, the cream of the crop discuss how the challenges have changed.

How have your roles been affected by the economic downturn?

Cathy Mead: One of the important things is understanding the needs of the actual customer base in the market at the moment, because the economic downturn has affected Dubai and the room rates that we were once all enjoying; we've had to realign ourselves and probably join the rest of the world. The average room rates that we achieved were because of the amount of business coming to the destination - we physically could not accommodate it.

We've gone through a phase of being very spoilt and therefore we could perhaps cherry pick the business that we wanted to at the right price, at the right time, and now we have to work harder and smarter. The secret is to get up close and personal to your customers.

I also think it's about your team's motivation; your team is critical to your success.

Michael Marshall: We have an area structure for our 12 Rotanas; in this kind of climate that needs a lot of communication because things are changing so quickly in the market place and that wasn't happening before - business was coming and we could almost pick and choose what business we had, especially groups and meetings, so there was pressure but of a different kind.

Now there's a lot pressure because we are facing late booking periods and later pick-up periods, so the comfort zone that we used to have [in our hotels has gone] and communication is crucial.

Mead: And it's communication vertically and horizontally. The trick is that you have got to be able to communicate up the food chain and you've got to be able to communicate down the food chain. It's being able to understand and dissect the information at a very high level and being able to deliver that in bite-sized pieces to your colleagues so it doesn't scare them from doing their job today.

Seema Pande: And like you said, you need to be able to deliver upwards as well. We know what the market is like, we know the last minute pick-ups are coming, so we need to be able to give that comfort level upwards.

Tareq Daoud: It is a major challenge; we have to forecast and then reforecast several times during the month.

Nasser Fawzi: I have to raise one point which I have noticed since I came back [to Dubai this year]; all the hotels are lowering their rates - by at least 50% compared to last year - but the business is not coming in and it's not because of the number of rooms' increase in Dubai.

How did you set your rates for this year?

Mead: There's a fundamental thing that I think that we ignore as hoteliers, we went out with our wholesale rates to market which is normally a good indicator around March/April time, but we didn't look at the exchange rates. For Europeans, it's 25% more expensive [to come to Dubai] even if we flat lined rates and had done nothing in 2008. So our rates increased, plus it was 25% more expensive, so unknowingly I think we turned some people off even before the economic crisis kicked in.

Pande: But to be fair these rates were set much earlier as well because Dubai really experienced [the impact of the crisis] in October/November [when we realised] ‘we are not immune to this'. Our rates are generally set in March/April, but this year was later, we waited until the end of April for ATM; we all went into ATM with nothing.

Usually by now you've figured out the impact of your rate on the market, but we haven't for 2009 because the business is so late, every market segment is late, conference is late, leisure is late and GCC is always late.

Of that 25% increase and the reaction when people adjusted their rates, for hoteliers who speak so much to each other, I don't think we talked a lot to people at that time, so while we understood what we were doing, maybe that communication [to consumers] should have been clearer.

Is the late-booking trend continuing?

Fawzi: It's the leisure business and the group business. We still get some enquiries for the future as well, but I can make a confirmation [a day in advance for groups]

Mead: It depends on the size of the group so if you are looking at smaller groups of 20-30-40 rooms the lead in time is still short but if you've got larger events coming into the city then no, they have to pre-plan that because logistically there are a lot of challenges.

Fawzi: They know that in Dubai rooms are available and they can wait until the last minute as there are always special offers. I feel as a responsible person that we are killing the market ourselves as well; we are reducing rates and competing with each other. I think last year the average rate in town for the hotels around the table was something like AED 1200-1500 (US $326-408) and this year it's down to AED 500 ($136).

Mead: Customers are creating a price war with hoteliers and it's down to how open and transparent we want to be with each other.

Fawzi: I call it a fish market.

Mead: It is a fish market; we have to be able to say ‘what's our walk-away'. There's no way that Raffles is going to go in at AED 500net BB ($136) but we're being told that Grand Hyatt is doing it, The Address is doing it...

Pande: And you also have to remember that Grand Hyatt has a lot of rooms to fill, but if I'm not convinced about the rate I will call Tareq and say ‘are you doing it?'

Daoud: We have a lot of rooms but we still manage to get our rate integrity to a certain extent of the market. But I agree 100% with Cathy - loyal customers staying with us for the last four to five yeas are calling us saying ‘can you match his deal or upgrade a room to a suite'.

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