By Andy Sambidge
Dubai's Monarch Hotel gives people chance to 'name your price' in bid to buck downturn.
A luxury hotel in Dubai is to give people the chance to bid for rooms in an online auction, it emerged on Sunday.
The five-star Monarch hotel on Sheikh Zayed Road has announced plans to launch the “name your price for luxury” auction in July, with rooms, meals and spa treatments on offer.
Arshad Hussain, director of business development at The Monarch said the hotel was reluctant to keep dropping its rates and enter a price war with its competitors to attract guests.
“In a recession, it’s a very easy thing for hoteliers to keep discounting rates,” Hussain said in comments published by UAE daily The National.
“Very soon they’ll be selling at cost price, or below your break-even point.”
Revenue per available room (REVPAR) in Dubai fell by more than 40 percent in Dubai last month, compared to the same month last year, according to data from STR Global, the paper reported.
Occupancy levels also fell to 67 percent, the report added.
The Monarch has also signed up to Facebook, which Hussain said was proving effective.
He said people would even have the chance to bid for the hotel’s ultra-luxury suite, The Monarch Suite, which this month hosted Paris Hilton and normally carries a price tag of AED49,000 a night.
One of the worst ideas i have ever heard!! Total failure. I have been running a business for 9 years and also come up with fancy ways to attract customers. I have realized that these gimmicks almost always backfire. What is he expecting?? People will honestly give him a price that is fair!!?? No way, its a recession, people are not digging deep into their pockets anyway. Everyone will try to get a bargain and monarch will never get a good bid to begin with. In the end they will have to settle with cost price or less than cost price anyway!! Also, by doing this campaign, they have already announced to the whole world their desperation to get business and that they are suffereing! Automatically the bidders will feel that they can offer anything they want, and monarch has no other option but to accept it. Although, its a cliche approach, but i forsee monarch ending up in a price war after this waste of time campaign. But they deserve points for trying.....
I wonder what is the so called "cost price" or break even that Hussain is referring ? A hotel room, like a movie theatre seat, is a 'perishable" commodity with time...once unused, it is lost...therefore, lower prices, any income is positive income and helps the bottomline...it also keeps the hotel 'busy' and gives the impression to the full price paying customers that it is bustling, not to speak of the staff and kitchens being given an opportunity to function at reasonable capacities. By the same logic, it amazes me to see movie tickets priced at Dh 25 and with just 4 to 5 patrons at times...wonder what would be the crowd if it is priced at Dh10 ( front) and Dh 15 ( rear) for weekdays ? wouldn't it be getting more customers who might patronise the snack bar, generating more revenue over all, not to speak of increasing the base of people who watch and get 'addicted' to movies?..........uh oh...why do we talk of costing? this is Dubai... keep an apartment shut, rather than rent it lower.....come on, take a cue...from Dubai Metro pricing !