
By Ibrahim Saba, Principal Sales Director – EMEA, IDeaS Revenue Solutions
The Middle East’s hospitality sector is booming, particularly in Saudi Arabia, Egypt, and the UAE. By the end of 2024, hotel construction increased with 610 new projects and nearly 150,000 rooms – up 4% in projects and 7% in rooms from the previous year, according to Lodging Econometrics. And the sector is not slowing down anytime soon. Analysts predict 107 new hotels will open in 2025, with 121 more in 2026.
For existing hotels in the region, this means an influx of new competitors. How do you stay ahead when new properties enter the market with aggressive sales tactics? Here’s how to maintain your edge.
Don’t engage in price wars
Instead of slashing prices to compete, focus on maximising your hotel’s average daily rate (ADR) and the value of its hard-earned reputation. Let new entrants fill their properties with cheaper business and avoid competing on price. Being undercut by competition isn’t necessarily a bad thing. When your hotel doesn’t need lower-rated business, let newcomers absorb that demand, limiting their ability to sell at higher rates while you secure premium guests. When lower-rated business is necessary, focus on value-driven promotions beyond price. Offer length-of-stay discounts on softer days or upgrade guests to premium rooms at discounted rates to boost revenue without displacing better business or hurting RevPAR.
Attract the right guests for your hotel
Target specific customer segments with whom you have a better chance of winning. Look into new segments of travellers with high revenue potential for your hotel, such as leisure travel, wellness travel, digital nomads etc. Digital nomads are remote workers able to work from anywhere in the world for extended periods. The Middle East, with its luxury amenities, modern infrastructure, and cultural diversity, is an increasingly popular destination for this segment. Hoteliers can cater to this demographic with long-term stay packages, co-working spaces, high-speed internet, and community-driven experiences to foster loyalty.
Established hotels have a big advantage over newcomers: your customer base. Tap into your existing customer base and loyalty programme by offering value-added offers and experiential promotions. This will differentiate your property beyond just pricing. You can create length-of-stay discounts over softer days or upgrade your lead-in room type to premium (typically lower-demand) room types with complimentary or discounted rates to ensure you capture incremental revenue that is not displacing better business or negatively affecting your RevPAR.
Data-driven personalisation
Today’s guests are the catalyst for the massive tech transformation currently taking place in the hospitality industry globally. Guest expectations are high and demanding. Guests today seek personalised, flexible, and unique experiences. They want to engage with the hotel through a multitude of digital channels from pre-arrival to post-departure and they want 24/7 access to seamless services which cater to their individual needs and preferences.
To stay competitive with future generations of guests, such as Millennials and Gen Z, it is imperative that hotels adopt technology which optimises profitability and enables personalised strategies that enhance guest satisfaction. First, incorporating technology, such as mobile apps for booking, digital room keys, self-service options and AI-driven concierge services, enhances the hotel’s appeal to these generations. Second, AI-powered tech solutions can consolidate guest data across multiple platforms such as preferences, past behaviours, and feedback, enabling hotels to offer hyper-personalised experiences to every single guest as well as at scale. This could be personalised promotions, room preferences, curated amenities and recommendations that lead to a better share of wallet for hotels, making guests feel valued and making them more likely to return to your hotel, boosting occupancy in the long run.
Cloud-based property management systems, channel managers, and revenue management solutions can also be scaled up or down according to specific needs. An agile tech stack not only enhances the guest experience but also streamlines internal operations, enabling hotel staff to focus on high-touch interactions and personalised service rather than administrative tasks.
Revenue management systems
Navigating unpredictable demand patterns is always a challenge, and even more so in a market flooded with new competing hotels. Advanced revenue management systems (RMS) can handle these complexities, allowing hoteliers to forecast demand with greater precision and to adapt accordingly. Today, these systems are powered by prescriptive analytics, AI and machine learning to enable an automatic assessment of the hotel’s performance and market demand, in turn deploying pricing decisions across the distribution ecosystem accordingly. Combined with visual user dashboards, an RMS enables team members across the organisation to quickly understand current and future market demand using data at both the market and hotel level, all of which are vital to delivering and growing hotel profitability.
Despite its proven advantages, some hoteliers remain hesitant to adopt an RMS, fearing a loss of control over pricing or assuming the technology is too sophisticated for their operations. That hesitance may compound the issue for these properties as competitors are already harnessing RMS tools to capture incremental revenue gains that add up significantly over time. These added profits can mean the difference between simply fending off competition and securing future funding for renovations or expansions. Moreover, advanced demand forecasting capabilities give hoteliers an automated, real-time view of what’s on the horizon, spurring faster, data-driven decisions on pricing and promotional strategies that benefit the bottom line.
Leverage your positive guest reviews
Most new hotels can’t yet compete with the trust and loyalty of your guests you’ve built up over the years. Capitalise on this advantage by prominently showcasing your guests’ reviews from platforms like TripAdvisor and Google. Positive guest reviews can significantly impact potential guests’ decision-making process, leading to increased booking conversion. Actively encourage your guests to post reviews and address negative feedback promptly to demonstrate your commitment to guest satisfaction.
Thriving in a competitive market requires a strategic approach while maintaining adaptability. By focusing on guest experience, leveraging technology, implementing smart revenue management, and capitalising on your established reputation, your hotel can stay ahead of the competition while securing long-term success.