The changing face of functional living

The hotel industry in the Middle East moved up a gear in to 2012 with huge plans for expansion. Targeting a development pipeline of 84,000 rooms in the region, the competition is still rife with contenders from the budget space seeming to gain in on the luxury segment players.

In Dubai alone the hotel occupancy rate has seen a surge of up to five to eight per cent, with midscale establishments seeing increasing room rates affected by the simple rules of supply and demand. This trend is expected to continue, as the region crosses the last quarter of the year.

While this tendency can be attributed to global factors affecting trade and businesses, such as economic and political instabilities, the midscale establishments seem to have gained clout due to a shift in mind-sets. Travellers on business or leisure are cashing in on the ‘better-than-satisfactory’ prospects offered by budget hotels.

From a business standpoint, midscale offerings are balanced and safely within projected travel budgets. Even with seasonal increases in room rates that tend to double during peak seasons, budget hotels are preferred for a number of reasons:



The meetings, incentives, conferences and exhibitions (Mice) industry, a regular revenue stream for the local hospitality industry, runs on a time versus cost equation. The location has been and will always be an important part of the business traveller’s choice of accommodation. While traditionally hotels near the airport were favoured, the increase of dedicated business zones has shifted this appeal. Nowadays, proximity to clients and regional offices is seen as a boon while planning short-term travel itineraries.



For the discerning traveller more value for money is increasingly becoming the decisive factor. With a burgeoning calendar of events throughout the year, there is an ever-increasing demand for competitive package deals and corporate rates. Businesses prefer to manage the overall travel costs of their resources by opting for the all-inclusive offerings, comprising air travel, local conveyance and accommodation costs.



With a time-bound schedule of meetings and appointments, business travellers are opting for functional hotels that cover the basics and a little bit more. Optimal choices are hotels that have good dining facilities, steady internet connectivity and a good measure of privacy. Budget hotels in the region offer prime quality offerings to corporate clients, guaranteeing loyalty and frequent-use perks.



It is not uncommon for a business trip to turn in to a full-fledged conclave that demands hours of planning and deliberation. Travel managers tend to plan around such eventualities, giving credence to readily available facilities. Consequently preferred hotel meeting spaces are equipped with all kinds of office support machinery such as printers, copiers, projectors etc.



Access to local malls and entertainment options increase the worth of a hotel by many degrees. In a culturally vibrant city like Dubai, the diverse range of activities for visitors can be sought with ease. Businesses can leverage on the active partnerships between hotels and tourist hot-spots in the vicinity. Outlets like Citymax Hotels also offer a number of practical in-house integrated dining and entertainment options which can work out to be more cost effective than external alternatives.

Thus from a luxury oriented market, UAE’s hotel patrons are now moving towards the value-for-money proposition. In order to survive in the future, budget accommodation brands will have to look at setting up more units into the same area in order to increase opportunity for economies of scale to kick into action and garner profits. Growing numbers in such budgets hotels is also expected to open up the UAE market to new sectors that were previously priced out of the market.

Russell Sharpe is chief operating officer of Citymax Hotels, the hospitality arm of the Landmark Group.


By Russell Sharpe