Demand grows for all-inclusive hotel deals in the UAE

Demand for all-inclusive hotel deals is growing in the UAE, particularly from European tourists with less to spend because of a weaker euro.

UAE properties have seen an increase in demand for all-inclusive holidays from source markets such as the UK, Russia and Germany, said Mrad El Khoury, the general manager of Fujairah Rotana Resort and Spa, which recently started offering all-inclusive packages.

Now an increasing number of hotels, tour operators and travel agents are creating packages that include flights, transfers, accommodation, meals, unlimited drinks and even sightseeing.

“The requests we have been lately receiving from both holidaymakers and tour operators are mostly based on this concept,” Mr El Khoury said.

The fallout from the Greek debt crisis and the impact of economic sanctions on Russia have softened demand in some of the key tourism source markets. The euro has declined 6.3 per cent this year against the US dollar while the Russian rouble is almost 8 per cent lower against the dollar for the year to date, Bloomberg data show.

While several hotels in the country offer all-inclusive deals, only the Turkish chain Rixos operates an all-inclusive resort, in Ras Al Khaimah.

Rixos tweaked its strategy on the back of such demand from its main feeder markets of Russia and CIS, Germany, the UK and East Europe, and also the local market, said Haytham Omar, the general manager of the property.

“Already from this year some hotel operators have started to convert their operational hotels to all-inclusive [ones] in the UAE, but with a minimum length of stay of five nights,” he said. “That is due to the demand for such concepts from international tour operators.”

But there are signs that the trend is catching on.

The Spanish chain Riu Hotels and Resorts recently signed a deal with Nakheel to build Dubai’s first all-inclusive beach resort. The 750-room, four-star property will be built at its Deira Islands development.

Properties in Dubai and Abu Dhabi also offer all-inclusive packages through travel agents or through their websites.

These include Movenpick Hotel Jumeirah Beach, Atlantis the Palm and Movenpick Hotel Ibn Battuta Gate Hotel in Dubai, and Al Raha Beach Hotel, Beach Rotana Abu Dhabi, Millennium Corniche Hotel Abu Dhabi and Shangri-La Hotel, Qaryat Al Beri in Abu Dhabi.

However, analysts say that the concept of all-inclusive deals in Abu Dhabi and Dubai is unlikely to become popular despite a decrease in the average room rates on account of the rising inventory of hotel rooms coming on to the market.

With Dubai and Abu Dhabi reporting strong demand levels, hotels will not need to reduce their revenue potential through these packages, according to Chris Hewett, a senior consultant at TRI Consulting.

“Although rates are under pressure, strong demand remains and therefore hotels will not opt for all-inclusive deals on a mass level,” he said.

“All-inclusive hotels and deals are usually used when there is limited demand and hotels have to incentivise visitors to visit their properties.”

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