Al Bustan and Al Murooj Rotana Dubai cluster general manager Hussein Hachem said advanced planning could overcome the threat of competition. Al Bustan and Al Murooj Rotana Dubai cluster general manager Hussein Hachem said advanced planning could overcome the threat of competition.

Increased competition was identified as the biggest threat to hotel business voted for by 78.9% of participants in the Hotelier Middle East GM Survey 2011, and the issue is expected to worsen in 2012.


"We believe that competition is the main challenge, as for Abu Dhabi there are more than 7500 rooms coming, which is around 37 hotels with 200 rooms each," said Ayman Fathy, general manager, Al Diar Capital Hotel in Abu Dhabi.


Similarly, when asked if competition was a big threat to business in 2012, Bruno Guilloux, general manager, Bonnington Tower Hotel, Dubai said: "Absolutely. We should not expect similar growth as in 2011.


"Even if the number of visitors to Dubai increases in 2012, hoteliers will not realise any growth due to additional hotels to the current inventory.The number of new hotels coming online does not match the current number of visitors and we are certainly reaching and feeling an oversupply of hotel rooms in Dubai," added Guilloux.


Both general managers said they had been forced to decrease rates to gain a "fair share" of the market, which had impacted their bottom lines.


Furthermore, existing hotels are struggling to keep up with the services and facilities offered by their new rivals.


"We have to be up to date with the new hotels in terms of product (refurbishments), service (training) and work closely with the Abu Dhabi Tourism Authority," said Fathy.


Guilloux said the increased competition had also led to soaring guest expectations and reduced loyalty.


"The main challenge remains to keep to keep the guest's loyalty to the brand or the property.


"Guests in general are now expecting the best for less while hotel running costs are increasing. There are ongoing challenges to maintain profitability while keeping a high service standard and guest satisfaction.


"Competition should be regarded as a business stimulant where the consumer is always the winner. For a hotel operator or owner, it means restructure of costs to maintain profitablity," he asserted.


But Al Bustan and Al Murooj Rotana Dubai cluster general manager Hussein Hachem painted a more positive outlook.


"With the influx of new hotels opening, competition is definitely a threat to business in 2012. However, I believe it is not as big an issue as everybody thinks. It boils down to advance and smart planning, knowing your market and effective strategies.


"Competition is one of the factors that motivates you to think out of the box. We must stay focused, plan ahead and understand the market," added Hachem.