Hotels headed for a ‘good end to the year’

This summer’s ‘slump’ notwithstanding, Rotana’s Omer Kaddouri tells KEITH J FERNANDEZ that Dubai’s hotel operators will need a joint action plan on rates and occupancies come 2008
Kaddouri: testing times ahead

ROTANA Hotels is gearing up for several openings across the UAE over the coming months, according to a company executive.

“In Dubai and the Northern Emirates alone, that will take our capacity to 3,300 rooms by 2008, from the present 2300. But we’re taking it at our own pace rather than rush through openings – we need put out a consistent product, and being local we have to work that much harder than the international chains,” says Omer Kaddouri, area vice-president, Dubai and Northern Emirates.
These include three hotels in Dubai the Burjuman Rotana Suites, set to open at the end of 2006, the 482-unit Rose Rotana Suites on Sheikh Zayed Road and the 467-room Media Rotana opposite the Dubai Media City in Al Barsha, both in mid-2007.
By January 2007, the group expects to open its Fujairah Rotana Resort with 250 deluxe rooms and chalets. “Initial bookings are at about now 30 to 40 per cent, we’ll build from that. This is primarily tour operator business, from Germany, the UK and Russia. Then of course, there’s the BTMICE sector and the Dubai weekend crowd, so we’re going to be fine,” he tells TTN, when asked about the current hotel rush in Fujairah. “The Fujairah government has big plans for the emirate, with the golf club, the airport has become more of an issue, so we don’t see business as being particularly hard to come by.”
Business in Dubai, though, hasn’t been as easy this summer, and Kaddouri agrees. “Summer has been okay, not magnificent. Tourists are not coming to Dubai as before, and that’s because hotels have been greedy and put rates too high, despite being warned by tour operators not to,” says Kaddouri.
He says occupancies have been in the mid-70s, and candidly admits that the Lebanon situation boosted guest numbers in August to the mid-80s. While hotel operators outside boom-towns such as Dubai would probably relax down by the pool in a slack season with bookings in the mid-70s, Kaddouri agrees that operators in Dubai have been spoiled by previous summers, where, he says, guest occupancies were in the mid-90s. “The year has been not been a good one, from the official mourning period in January onwards and this year there were a lot of times when we never quite filled up – and that’s always an indicator that things are changing.”
The true test, of course, comes around the end of 2007, when several projects currently under construction – including the rash of new three-star hotels – truly offer travellers a choice of accommodation in Dubai. Rotana’s strategy is to take to the trade shows such as WTM and ITB, and “fight back”, as Kaddouri puts it, “re-establishing partnerships for the long term, woo them back”.
Dubai’s new feeder markets, such as the USA should only start kicking in two or three years from now, he says, so managers will need their tour operator friendships. “It’s going to be a tough couple of years for the industry from about the end of 2007,” he says ominously.
“I think someone will need to sit down and say, how are we going to deal with this situation, how will we manage rates and occupancies – maybe the government, maybe an industry association.”
For now, he’s expecting a bumper November, very good occupancies in early December and all through the Dubai Shopping Festival, “a good end to the year”, both for his hotels and for the industry.
In terms of renovations, he says, the Jumeirah Rotana should be finished by the end of Ramadan, while the Rimal and Rihab suites properties are just done with theirs. The flagship Al Bustan Rotana should be done with its own makeover, of rooms, coffee shop and lobby, by next summer.