Improved strategic understanding needed for hotel pricing |

Allan highlighted the need for hotels and hotel companies to align with an improved strategic understanding of which markets and which segments to target.

“The bigger issue is that hotels and hotel companies need to have a better understanding of what particular market segments to target. By not setting leisure rates or corporate rates correctly, they are putting pressure on certain boundaries,” he said, adding that historically, business in Dubai had been so good for such a long period of time that even now, “a significant number of hotels still have not switched their ways of thinking – they need to focus more on, this is my market, these are my segments”.

Delfau chimed in by agreeing on a similar “complacency” of the mindset of certain hotels in Abu Dhabi and encouraged his fellow hoteliers to seek the challenging route. He narrated an example of how at his hotel, business from a source market was declined because the price offered was “simply too low” and how, he and his team pro-actively pursued other source markets instead.

“It is certainly harder to go find the markets that offer the right rates for the product that we have but it is possible,” he said, while emphasising the importance of communicating to the sales team how the hotel’s rates are directly related to its bottomline.

“You need to ensure, as a general manager, that the sales team understands what the strategy of the hotel is, what you need at that time for your property,” he said. “Very often they will not understand the relationship between the GOP and the rate unless you explain that to them. Sell your property at that price and this is what happens to our GOP.”

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Improved strategic understanding needed for hotel pricing |