Dubai’s luxury Monarch hotel is launching an online auction of rooms, meals and spa treatments as a novel way of attracting guests.
The Monarch Dubai, with its prime location at 1 Sheikh Zayed Road, plans to launch the “name your price for luxury” auction next month, as a tool for combatting the slump in Dubai’s hospitality sector.Arshad Hussain, the director of business development at The Monarch, said the hotel was opting for innovative marketing strategies rather than dropping its rates.
He told Abu Dhabi-based The National: “In a recession, it’s a very easy thing for hoteliers to keep discounting rates. Very soon they’ll be selling at cost price, or below your break-even point.
“In 2010, the market will come up. If you keep dropping your rates, when are you going to increase them? In London, after [the Sept 11 2001 attacks in the US] a lot of hotels started dropping the rates. It took them three years for them to increase the rate to the same level as pre-9/11.”
The hotel’s ultra-luxury suite, The Monarch Suite, which this month hosted Paris Hilton and was voted “Middle East’s Leading Suite” at the 2009 World Travel Awards, is also in the bidding. It normally carries a price tag of Dh49,000 a night.
“The auction model is a very smart move on the part of the hotel,” said Rohit Talwar, the chief executive of industry consultants Fast Future Research.
“Firstly, it helps them stand out from the crowd when most others are focused more on cost cutting. Secondly, they can control the lower limit and the number of rooms they need to sell via auction and the price in a much more dynamic way.”
Dubai has been particularly hard hit by the global downturn due to a big slump in demand from key source markets, coupled with a surge in hotel room numbers due to the opening of new properties open planned during the good times.
According to STR Global, REVPAR in Dubai slumped over 40 percent in May, to Dh517 from Dh867 in the same month last year. In the first five months of the year, REVPAR for Dubai was down 36 per cent compared with last year. Occupancy levels fell to 67 per cent from 78 per cent.