Hotel revenue optimisation firm Duetto is rolling out its services in Dubai as supply begins to outweigh demand in the Emirates.
The London-based business has recently added 7,500 rooms in 40 hotels to its European portfolio of over 500 hotels.
Michael McCartan, managing director for Duetto in the Middle East and Europe, said hotels in Dubai could use its services rather than cut prices as competition in the United Arab Emirates city continues to grow.
Research from Deloitte has found that occupancy rates in Dubai were at around 75% in the year up to February 2016 while the revenue per available room (RevPAR) at hotels has gone down by 15%, which McCartan said was a “double-whammy”.
He told Travolution: “Hotels in the Dubai market in particular have had it all their own way for a long time. They were literally sticking a price on the door and people would pay that.”
McCartan said sanctions on Russia, more competition within Dubai and the rise of other Middle Eastern destinations like Qatar have contributed to a situation where more hotels are operating significantly below capacity.
“The market is relatively immature when it comes to revenue management,” he added. “Because of the unsophistication in the market hotels are under cutting each other.
“It’s like a race to the bottom, which is a dangerous situation. But we think it’s a fantastic opportunity for Duetto – and revenue management in general.”
One of Duetto’s global partners, Warwick, will be their first Dubai-based client but the firm is also in talks with a group of large hotels in the emirate.
Worldwide, more than 1,200 hotels and casinos in more than 50 countries use Duetto’s revenue strategy solutions, which includes personalised loyalty pricing.
McCartan said the firm – which first started on the Las Vegas hotel scene in 2012 – already has a strong foothold in the UK, Spain and Portugal and is focussing on the German market since coming to Europe.