February 19, 2012

Gulf Food Exhibition - How does Dubai hotels violate their publish rack rates?

Everyone knows while planning their pricing structure, that Gulf Food Exhibition occur the 3rd week of February, in Dubai. We know that it is always a citywide convention, that it brings over 50,000 people in town, because the food import products industry is really important for Dubai. 

As I wanted to see how the city is behaving in terms of prices, there are still availability for AED 2,000 budget to stay in a decent 4 or 5-star of Sheikh Zayed Road stretch. Maybe I have an unrealistic notion of value for price at hotels, while I notice few 4-star and hotel apartment using an OTA extranet to sell their last rooms and publish a 4 to 5 digits rates during a citywide event, it's really surprising, when they are usually selling with a 3 digits rates all year through.

4-Star Hotel Dubai, selling normally between AED 450-600.00
Gulf Food Price: AED 15,000 for a Deluxe Room
Ramada Hotel Dubai - Deluxe Room - AED 15,000

Hotel Apartment Dubai, selling normally between AED 400-600.00
Gulf Food Price: AED 9,000 for a One or Two Bedroom Apartment

Hotel Apartment Dubai, selling normally between AED 300-450.00
Gulf Food Price: AED 5,000 for a Deluxe Room

I am wondering how Dubai Department of Tourism Commerce and Marketing would comment on this. As a hotelier, I always thought that the Rack Rate can only be the highest rate the hotel can sell. But it's seems that in Dubai, it is not being respected. And while I would pay AED 2,000 for a Fairmont, Emirates Tower, The Address, Armani, Rotana, Hilton, i think those snapshots are ridiculous. We are talking about pricing, and not gambling. A client who pays such as rate, will definitely have high expectations, which will end up not being deliver.

I also think that Booking.com should monitor this because on a 20-25% commission for a AED 15,000 sale, you can imagine the commission. 

Let's be reasonable for this budget, you would rather sleep at Burj Al Arab - Deluxe One Bedroom Suite at AED 7,480, a usual rate for the season:

I do hope that this practice is monitor by Dubai DTCM, because it brings a bad image to the emirate. Dubai has always been fairly price, and those hotels should get a penalty, for selling way above their rack rate. If only, Ramada / Howard Johnson / Imperial Hotel Apartment would have been smarter by selling a higher room category, it could have reduce the feeling of being "cheated".

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