By Joe Mortimer
Long lead-times and annual increases in hotel rates mean less profit for professional congress organisers in the UAE.
Three to four year lead-times on major international events and annual increases in hotel rates are stripping away profit for the UAE's professional congress organisers (PCOs).
Contractual deals with clients have meant that PCOs are unable to adjust their rates in keeping with the increasing rates of venue and room rental, which can often increase by up to 40% in that time period, according to MCI director operations, Vishal D'Souza.
"With the soaring hotel prices in Dubai and the cost of living going up it is a big challenge for us to cut down on cost that is eating from our bottom line," he told MIME.
"We ended up losing big time because from the time when we quoted to the realisation of the project, the prices would have increased by 30-40%, most of which we can't pass back to the client because we have already been contracted."
D'Souza attributed the problem to the fact that Hotels have been "in the driving seat" when it comes to negotiations with PCOs; a luxury they can afford because of the high demand for meetings and conference space in the market.
"But in the next two to three years I think that whole dynamic will change when you have another 2-3000 rooms opening up in the market," he added.
"That is to our benefit; now we can go around and tell the hotels to look at building long-term partnerships and not considering each proposal on an event-to-event basis."
MCI - a global association, communications and event management company that opened an office in Abu Dhabi in November to supplement its Dubai office, which opened in 2006 - is therefore working with hotels on a local and global level to build reciprocal relationships.
"That is an education process that we have been carrying out in the last one and a half years since we have been here," said D'Souza.
"We are now strengthening our relationships with suppliers and saying how we think that they are performing and how we want them to perform and we also take feedback from them as to how they want us to perform and that is the relationship we are building."
He continued: "In terms of return on investment (ROI) we want to build a relationship for the next five years, "you grow with us", that is the language we are talking."