By Parag Deulgaonkar
Department of Tourism and Commerce Marketing says Dubai is expected to add 40,000 new rooms by 2020
Rotana, the Abu Dhabi-based hotel management company, will double its staff strength by 2020, according to its president and chief executive officer.
The company – which calls the Middle East and North Africa its “home turf” – will have 104 operating hotels in the next three years, with 55 currently operational and 49 under development. When all the new properties are complete, they will add 12,054 rooms to its inventory, taking the total number to 27,087.
In an exclusive interview with Arabian Business, Omer Kaddouri revealed the company plans to double its staff numbers to about 25,000 to 26,000 by 2020 from nearly 13,000 at present.
“When we first started the company, we were opening 100-, 120-, 150- and 200-key hotels, now we are opening hotels of 400-, 500-, 600- and 800-key hotels. So there is lot more colleagues that we need to hire to manage our bigger hotels.”
Kaddouri, however, said the biggest challenge for Dubai remained declining room rates.
“We have seen average room rates dropping significantly and when they drop significantly it affects profitability. So you have to be cost efficient and you have to look at your manpower.
“You may have to reduce your staff numbers because revenue is down and add that cost saving to your bottom line. But you can be cost-efficient to a certain degree; and then it stops because if you are too low on your costs then you are affecting the quality. And the UAE and the Middle East is known for its quality,” he added.
According to Department of Tourism and Commerce Marketing, Dubai reached the 100,000 hotel room target in 2016 and is expected to add 40,000 new rooms before Expo 2020. Driving the competition tougher on the pricing front further are online marketplaces such as Airbnb and licensed holiday home players.
Have you done customer service surveys to find out why room rates are declining. In addition, swapping the market with new hotels will surely only add further drop in room rates as competition becomes more prevalent!