UAE hoteliers at odds over price ceiling mechanism for business

By Marc Castro

Nov 02, 2013 09:04 AM EDT

A hotelier in Dubai had called for the UAE tourism authority to introduce a ceiling on hotel rates to control the market. This recommendation though had not been welcomed by other rival hotels in the region.

According to Time Hotels CEO Mohamed Awadalla, in a conference organized by Hotelier Middle East, said, "During Eid, none of the hotels in Dubai had 100% occupancy because of overpricing... We have to work together, we don't have to threaten or fight each other... I even suggested to the DTCM (Department of Tourism and Commerce Marketing) that every hotel should have a ceiling rate."

He added, "If we have a rack rate, hotel apartments and individual hotel companies can sell like Hilton and Sheraton in Jumeirah and not increase prics during high season."

His suggestion though was rejected by many hotel executives at the event. Many said it wouid be a bad move for busines in the emirate. 

Amongst Awadalla's critics were Hilton Worldwide Middle East and Africa President Rudi Jagersbacher, "I think we don't want to go through the same system as we have in Kuwait where there are set rates for certain markets. I believe that we have to look at the overall investment in building our hotels and properties and I think we should take a commercial approach."

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