A look into how this affects the Emirate's hospitality sector
Seventy percent of people in the Middle East book hotel stays only seven days in advance, reveals Bao Dinh, GM for the Middle East and French-speaking countries at Hotel Tonight.
Hotel Tonight, which launched in Dubai last week, is a last-minute hotel-booking app.
According to Dinh, the percentage in the region is higher than the global average of 60 per cent.
But why?
“People now are on-the-go, they are using their mobile for everything and they are booking at the last minute,” Dinh states. “Dubai is more last-minute than elsewhere.”
And with the highest percentage of Smartphone users in the world, it comes as no surprise that consumers in the region use their mobiles for everything.
Numerous websites and apps have been launched to cater to this new trend of booking late, including LateRooms.com, MyDubaiStay.com and DirectRooms.com.
“Business trips and meetings are [often] booked [at the] very last minute, so business travellers are a large market of ours, probably 50 per cent,” explains Dinh.
In an interview earlier this year, Stuart Frisby, principal designer at booking.com – who launched Booking Now, a mobile app focusing on last-minute hotel bookings – explained to Kippreport: “The main thing about the app is that it is for people who are happy to not plan in advance or for someone who really needs somewhere to stay [at the] last minute. Business people are definitely a part of that, but also, people who live a spontaneous lifestyle.”
So how does this affect hotels in the region?
“The occupancy rate [in Dubai] is 75 per cent in hotels, which means that, on average, there is one out of four rooms that are left empty every day,” Dinh explains. “It is terrible for hoteliers because hospitality is a fixed-cost business and stocks are perishing at midnight if you don’t sell them. They need to sell them and that is the business opportunity.”
Dinh explains that, by allowing companies such as Hotel Tonight to sell last-minute hotel rooms at a lower rate, the properties are now making the money that they would initially have lost out on. And with the app, it is a win-win situation for both the hotels and the guests, where travellers can now book a room wherever and whenever they want, while hoteliers, on the other hand, are able to sell rooms that would otherwise remain unoccupied.
“It is common practice for properties to accommodate late bookings and walk-in customers as it is normal in the industry,” explains Ghassan Jaber, founder and chief executive officer of Peacock International Hotel Management, to Kippreport. “Hotels always leave a certain number of rooms available for late check-ins. Unless the hotel is already fully booked or fully occupied, they will always find a way to accommodate you.”
Booking on the go
Hotel Tonight, Dinh explains, is trying to fill up the empty rooms and generate incremental revenue.
Meanwhile, Frisby states that, on the mobile platform, customers’ “booking behaviour changes, so while people are traditionally booking 30 to 60 days in advance. On mobile, [the delay is a lot shorter] and roughly half of the business we do on mobile is last-minute – something for tonight or tomorrow night.”
He continues: “In these situations, we see that people’s requirements are quite different than when you are booking a summer vacation. Booking Now is something that we are able to use to address these issues, where you can pull your phone out of your pocket, make a booking in a city you are either already in or is just a drive away – that is the main reason.”
Looking forward
Already home to some of the world’s best hotels, the hospitality industry in the UAE is not expected to slow down anytime soon.
With annual revenue expectations for UAE hotels projected to reach $10.9 billion in 2019 – almost doubling the $5.9bn figure recorded in 2013, according to Euromonitor International – and 100,000 rooms expected to be in Dubai by 2020 – compared with the 65,000 rooms the emirate has now, according to JLL –the future looks bright for the country’s hotel industry.
