October 23, 2012

Eid Holidays: October 26-28th, 2012 the great Yield Factor

Expect bumper to bumper traffic and shoulder rubbings crowds around Dubai as tourists from the Gulf countries descend on the United Arab Emirates for the Eid Holidays, which falls this weekend.

There is something unique with the shopping malls for the Dubai stops, as Dubai is implementing 24-Hour Shopping initiative that should draw more crowds from the Gulf this year, until early hours in the morning. What a treat for Dubai shopaholics!!!

Hotels are anticipating 90 to 100 per cent occupancy during that period. Once again as per the Article of local news paper in Dubai, Gulf News.......just a second, no one talks about Rev PAR performance, like if it was a habit to fill up the rooms, during high occupancy demand, without getting a mix clientele. I see in this article, that travel agents registered an increase of 20% in demand. So it means hotels are selling negotiated room rates 30-40% from their current rate to travel agents. Is that logic?

Most of the hotels are selling their last room with price for a Suite in 5-star hotel being above USD 1,000.00 (AED 3,670.00 per room per night).

Ok it's great to see that hotels will make some money, after a so-so month in September 2012. But what would be even more interested is to know if revenue management leaders have been able to drive the bookings at the lowest distribution cost possible. 

In fact during a high demand period, you should look at your distribution channels mix between:
- Online Travel Agences: 20-30% Commission,
- Travel Agencies - Tour Operation: 15-50% Commission,
- Corporate Bookings: No commission but yearly contracted rate,
- Best Available Rates: 10% Commission

Easier to say, difficult to implement?

Every Eid Holidays in the UAE are a great performance, because there are great activities organized by DTCM and Shopping Malls as well. The regional troubles in the Levant part (Lebanon / Egypt) will not favor the clients to consider those destination. So for all nationals and expats, UAE will be THE great destination for the weekends.

The majority of the hotels are on very high occupancy; therefore if you analyze your nett bookings you will realized that there might be a 40% gap between your daily reports average rate and revpar and your daily reports without your commission.

Currently the vast majority of hotels are selling with daily quadruple rates, but when we will see the market performance, to the exception of the 5-star hotel, the 3 and 4-star segments will not be above AED 1,000.00

Profit Recommendations:
- Do not overbook your first category base, because you will end up upgrading for free,
- Turn off your up selling program for the period,
- Control your room allocation / block with travel agents, and maintain your cut off dates,
- Maintain a minimum length of stay: 3 Nights,
- Sell per room type on the phone with Travel Agents, Clients and business partners,
- Restrict your availability with OTA to the minimum and sell directly on the phone or through your brand website,
- Honor your cut off dates as per contract,
- Ensure all your reservation are guaranteed by company or valid credit card,
- Maintain descent services, as some hotels are charging their rack rate or even more than their rack rate,

The following should allow you to gain significantly in RevPAR for few days left.


RSVP Hospitality wishes you Eid Mubarak for you and your family.

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