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Mon 1 Oct 2007 12:00 AM

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Dubai’s luxury market not at ‘saturation point’

Dubai hoteliers have rejected claims the luxury hotel market is close to saturation, as reported in the UAE media last month.

Dubai hoteliers have rejected claims the luxury hotel market is close to saturation, as reported in the UAE media last month.

Press reports suggested the large number of planned and newly opened luxury developments would create an imbalance in the market.

But Ritz-Carlton Bahrain general manager and regional vice president Pascal Duchauffour said Dubai had been able to "continuously reinvent itself".

"It is a fact that a lot of rooms have been built in Dubai, but it is not enough - there are more arrivals and more demand, and the prediction is that the volume is going to stay," he said.

"This is a key parameter we have to look at - most of the inventory coming in is high end. Today we are building the right rooms in Dubai, but we are going to have to watch that tier in the market going forward to make sure we don't build too many."

Hilton regional director of sales and marketing Arabian Peninsula Guy Epsom agreed with Duchauffour.

"I don't think it has reached saturation. Having been in Dubai 10 years, the airlines, and specifically Emirates, are very good at bringing on new markets," he explained.

"Provided the delay of the A380s does not have too much of an impact, I think the five-star market can definitely be maintained, but if there is a delay there may be a small blip or correction."

Dusit Hotels and Resorts regional vice president Middle East Sam-Erik Ruttmann said guests in Dubai were going to have to make choices between different brands and experiences in the luxury market.

"When you are talking about saturation point, you are talking about occupancy and rates going down, but there will always be survivors," he said.

"They will survive on the strength of their brand, and on how well they understand the needs of their customers, and those hotels will always do well. I don't see a saturation point for the foreseeable future. You talk about a four-hour flying time from Dubai, and you can reach a large target audience, and I think there is always demand in that market segment for hotels."

Kempinski vice president sales and marketing Middle East and Africa Roland Obermeier said the market had not reached saturation point, but hoteliers would have to work harder with increased competition.

"I think it is a bit early to get nervous and talk about saturation point," he said.

"It will become more competitive, and hotels will have to work harder, and do more to get the customer in and satisfy them.

"That means we need to do our jobs a little bit better and not just concentrate on yield, we need to actually start doing our job in terms of sales again. A little bit less revenue management, and a little bit more sales."

Duchauffour said hotels would have to work to ensure they remained relevant to their guests.

"We have realised the customer today is changing. They are younger, they are more technology savvy, they want to get into their room and hook up immediately. Even though you find them by the pool, and by the beach, they are still connected," he explained.

"We have started to evolve to stay relevant to the market. That is the key, how relevant you are to the client today."

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