Will Dubai survive ‘new disruptive trends’ in the luxury hospitality brands sector in 2013?

Nov. 26, 2012 - PRLog -- It is always paradise for the little guy when a specific business model or industry experiences a new approach or strategy from a new play in the market which sends their competitions leaders scrambling in panic to restructure prices and margins to keep up with the latest trends.

Take the mobile phone industry as one example. Market leaders five years ago are now playing major catch up to compete with new players offering more bells and whistles for consumers. This moved many luxury electronics makers into new territories, having to defend their higher price and brand investment, while other players rode the wave of think different and racked in market share.

Who could imagine that in another industry, film and camera makers Kodak, could be another victim of the ‘new disruption’, once one of the most highly respected companies on the planet, would have its business model collapse.

Disruption is the new buzzword for out of the box thinking, a new approach to traditional business models that are typically followed by the majority of players in a given space.

So what are the leaders in the luxury hospitality sector threatened by in this fast paced world where change cannot happen virtually overnight? Why are they organizing what seemed like an emergency summit to some in the UAE?

The answers could be far too obvious. In Dubai, after years of over building, supply and demand were far from married. This led many real estate developers to convert an asset that was initially intended to be sold as real estate to end users to be re-packed and converted in a hotel or serviced apartment.

In the last 18 months, reports of occupancies as high as 70% and above have been murmured, which spells happy days for the stakeholders of high end accommodation. However, the one thing that business strategists have learned is that change not only can happen, it should be expected.

The new serviced hotels and apartments are leaning toward offering a seamless luxury service while offering more value to the customer. This in turn causes a ripple effect in the profit centers of the traditional luxury brands who stubbornly defend their price points while losing the flexibility of market agility.

It’s not so much that consumers stop loving their old brands, however they have begun to love their experience and cash more.

A new trend in branding real estate also has now entered the arena of players to the same consumer base. How could these contenders tip the market?

The juxtaposition of that of course is branded hotels in the UAE and around the world have been able to repackage some of their asset offerings as a real estate product, adding tens of millions to their annual turnover through fractional or shared ownership offerings. "Consumers are not sleeping, they now realize that they are the decision maker while loyalty to brands fade, and experiences and value take the lead. They simply want and demand a better and more fair deal and a newer enriching experience. The nice fluffy towels and the branded soap samples to take home basically are not cutting it anymore." says Michael J. Tolan, Ceo of World Class Group and veteran of the hospitality industry for 25 years. " Consumers could be the driver for new products from established brands such as Hyatt,Jumeirah,Hilton,Rotana,Marriot and other market leaders in the UAE.

Leaders within the luxury hospitality space are joining a think tank summit in Dubai, on the 4th and 5th  of December to review new research that profiles the latest in behaviors which could lead to disrupting their current business models.

Expert hospitality think tank and trend watchers from the UK namely Boutique Hotel Media and Fractional Life have taken the initiative to organize the Luxury Hospitality Summit for leaders within the hospitality sector before the end of 2012, in order to share best practices and profitable solutions from leading experts.

It will be taking place at the Jebel Ali Golf Resort & Spa, Dubai, on December 4th and 5th. Companies like Armani, IFA Resorts and Wyndham Hospitality have already claimed their seat at the leaders table, as have noteworthy serviced apartments and local hotel groups.

Whatever the outcome, the future seems to be in the hands of the brand that brings more value, experience and continues to disrupt the status quo.