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How does a city renowned for its excesses in architecture and exalted for its ability to create unparalleled luxury experiences gear up to survive the impact of the downturn, and demonstrate resilience as it matures into an international leisure tourism destination? Dubai’s strategy should be to move away from talk of prices and towards talk about experience enhancement.
The ideal situation for every hotelier is to maintain or increase average room rates and protect occupancy levels through the year. The tempting quick fix would be to drop room rates to put “heads on beds,” but that would definitely dilute or even destroy a hotel’s brand equity in the luxury segment.
Business today is about going back to basics. The economic downturn has only amplified the need for us to improve what we are usually meant to do.
Travel companies and hotel operators became complacent in the “noughties,” as latent demand converted into passive sales and it was merely a matter of taking bookings. Now footfall in travel agencies has dropped, people shop smarter, the competition’s getting wiser and customers wants more for less. Look at Tripadviser.com to get a glimpse of how customer opinions become a brand’s reality; true success is about turning this transparency into a triumph by making one’s brand a compelling aspiration. A classic example is nearly a million people viewing the Emirates first class cabin on Youtube.com, witnessing the re-introduction of glamour to air travel.
In this instance the only sustainable strategy to protecting luxury experiences would be to enrich them with authenticity, sincerity and humility. This boils down to service standards and the culture the brand brings to the guest’s experience within the resort – the moment of truth. One cannot compromise on details while remaining true to the long term horizon; the St. Regis in Bali offers a beach-house that is exceptional in design and compliments it with innovative offerings like an attached maid’s quarter and butlers who offer complimentary canapés and wine – things that remain true to the basics of luxury experiences.

BEACH BRANDING. Now, let us look at the cluster of hotels along the beachfront in Dubai – most resorts have a grand presence, they all have beaches, the sun loungers are equally comfortable, rooms are well-appointed and guests are spoilt for choice when it comes to dining options.
But service standards vary, and that’s where hotels can make a remarkable difference. There’s no positive association if a guest is paying $450 per night, sitting on the beach and waiting for more than 30 minutes to get a cold drink. It is pre-empting needs that makes for iconic service, and the bricks and mortars don’t amount to much after that. This is amplified during the downturn as customers are smart enough to know that their dollars hold more value now and will push the envelope to seek an endorsement of “money well spent.”
True luxury seldom talks about money. Luxury is about etiquette and aspirations and hotel brands need to continue investing in themselves as destinations where the extraordinary is introduced in ordinary circumstances. It’s the little touches, from remembering my favorite flowers to ensuring the lady dressed in black at dinner in the fine restaurant receives a black napkin instead of a white one, to avoid the unflattering issues of lint on her dress.
This emotional bond between the traveler and the hotel will prove to be the fabric of tomorrow’s demand, as it is the customer who owns the brand and is empowered by today’s social media platforms to echo his sentiments across borders and time-zones. Experience breeds authority, and first time visitors will continue to be influenced by other people who have stayed at a hotel. Conrad Hilton once said that, “the only thing a guest will ever remember is how he felt while checking out.” Today, those feelings are easily shared with the rest of the world.
Luxury brands can become fairly isolated, as they are territorial and strive to protect their mystique (this is not a surprise, as luxury brands need to align themselves to an order of social stratification). But they soon learn that sometimes there’s little difference between such brands. This leads them to align themselves to symbiotic partnership initiatives with other synergistic brands, to enrich guest experiences.
Longstanding partnerships have emerged between credit card companies and hotels over the years in the form of lifestyle concierge services, whereby guests’ needs are anticipated and then catered for. A complimentary bottle of wine, a free upgrade, a free airport transfer, dinner for two, or breakfast for free – it all adds up, especially if you pay with American Express. To that extent, brands like Amex have introduced their own travel services divisions to add more to their customers’ lifestyles. This will continue to evolve, from Swarovski branded washing machines to Porsche kitchens and designer hotels (Armani Hotel in Dubai marries haute couture to hospitality).

SOCIAL SEDUCTION. Driving desire at a social level is paramount to protecting luxury. As frequent independent travelers become more sophisticated and start researching their choices online (on Web sites such as Tripadvisor.com), plus voicing their need for knowledge on closed network platforms (such as Asmallworld.net), it is important for hotels to ensure they bring something tangible to the table. Luxury brands need to mean something more, whether its attracting the ethical traveler through their responsible posture towards the environment (Al Maha Desert Resort & Spa recognized a decade ago that a conservation-led philosophy can be very profitable), or ensuring the hotel offers something truly unique so that guests walk away feeling renewed by their stay (sanctuary resorts are growing in popularity across Asia, the Indian Ocean islands, Australia, and even the Middle East).
To remain within the consideration set of customer choices, hotels also need to ensure their visibility in key feeder markets; this means being prominently present in relevant media to that specific location. Ubiquity is easily confused with presence and its not always beneficial to simply have your brand visible on what is statistically proven to be a high-viewership Web site. It’s about connecting with individuals as part of their community – tell meaningful stories that people can relate to.
The good news is that hotels in Dubai are still enjoying high occupancy and organizations such as ABTA (the Association of British Travel Agents) rate the emirate as one of the top bargain destinations in 2010. A correction in the average room rates is actually a positive step towards Dubai’s maturity on the international landscape of holiday destinations, and brands need to embrace this phenomenon.
The gradual increase in pricing will occur when hotels focus on offering culturally relevant and unique experiences that elevate them from the rest. Luxury hotels don’t need USPs – they need to create unique and compelling competitive advantage by being culturally attuned to their location’s heritage. Jumeirah Bab Al Shams resort is little of different from other desert resorts, but its Al Hadheerah restaurant gives you a glimpse of Arabia – from culture and cuisine to entertainment and heritage – without removing you from the comfort of the 5-star experience.

Gaurav Sinha is managing director of Insignia branding agency

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