Given the increasingly challenging environment facing the UAE’s hospitality sector in recent years, attributable to both supply and demand side factors, hotel operators and owners have been looking at how to drive incremental value from their existing portfolio.

While the most straightforward way of doing this is simply to cut costs – often starting with payroll – many recognise that simply eliminating headcount is not sustainable in the long term.

In order to try to bridge the gap between actual and budgeted returns, concerned stakeholders are turning to new ways of increasing the bottom line both by streamlining costs and creating new revenue streams.

This paper examines a number of such practices that the team at Knight Frank has encountered over the past 24 months, their inherent risks, and ultimately what the potential impact can be on hotel value.

Rooms

Initiative 1: Managing OTA
relationships – 6.5% increase in rooms revenue

Hotel operators and Online Travel Agencies (OTAs) have historically had an uneasy relationship. While operators have not been able to deny the effectiveness of such booking platforms, the fee structure which often can go to 25 percent of the booking value – has always been a bitter pill to swallow.

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