Fluctuating prices that may work for airlines do not work for hotels, says Nikki Beach VP
The hotel industry is responsible for a slower market in the Middle East, led by trends such as last minute customer bookings, according to the vice president at Nikki Beach Global Hotel Division.
Speaking to Arabian Business, Alexander Schneider said consumers no longer book rooms in advance due to attractive ‘last minute’ discount deals offered by hotels.
“A trend is obviously that everything comes at a slower pace. Most people don’t make decisions 6 months prior to travelling anymore; even German travellers have gone down to 2 – 3 months. And this is not going to come back,” he said.
“We, as a market, are partially to blame. We educated people that it’s better to book last minute than a long time in advance. So everyone waits for rates to drop last minute and then book,” he added.
Schneider compared the practice to that of airlines’ fluctuating prices, but said the strategy does not work in hospitality.
“What works for airlines is not going to work for hotels. When you sit in an airplane, you are aware that one person may have paid $200 for a ticket while another may have paid $2,000, and people are okay with it, because an airplane is a commodity. It takes you from A to B, and yes, you have tiers, but hotels are used for recreational purposes,” he said.
The VP said Nikki Beach Hotels retain stable prices in order to maintain a healthy market, and urged other hoteliers to do the same.
“A psychologically-driven market is not a good market, so we try to keep our offering unchanged. We talk to a small niche and that helps us. But it’s important for all of us to become reliable in our pricing,” he said.
“We have a different responsibility in our pricing and you just shouldn’t sell rooms for $200 one day and $2,000 the next day. Yielding market demands is a fair practice. You just have to make sure it doesn’t become erratic,” he added.
Schneider also said a popular consumer trend revolves around authenticity and simple design, explaining that “nobody wants over-elaborated stuff anymore.”
The Nikki Beach brand, which boasts the famous Miami-style Nikki Beach Club, is famous for its simplicity, featuring mostly white interiors while relying on earthy tones and eco-centric elements.
The concept was launched by Jack Penrod in 1998 in the US in a bid to combine entertainment, dining and music in a luxury beach offering. Today, the firm has 14 beach clubs, four hotels and resorts as well as a special events division.