CASE STUDY: DRY HOTELS
cuisine) where alcohol is not a must and with this business approach, we definitely have better control on the cost. We are strategically focusing more on the room occupancy, revenue and profitability rather than F&B because this is where all hotels make the maximum profit margins. Hotels generally does 75 to 85% profit from the room sell against 30 to 35% profit from the F&B sell. So far our top and bottom line performance is positive including the F&B where we are showing that this department can be profitable without alcohol if it is managed and the target is set properly.” Voivenel adds, “It all depends on the facilities at the hotel. A dry hotel can yield the same GOP as the one with alcohol, provided the facilities are defined right. After food and beverage, the largest moneymaker in a hotel is banqueting. So whenever HMH is involved in planning and development of hotel, we advise owners to allocate maximum space to meeting and banquet facilities instead of too many food and beverage outlets as that could generate superb revenue.” Touching upon the GCC travel market and preferred outlets, Arora explains “we see this more as an opportunity especially with our GCC clients. We are their first preferred hotel in Downtown area. During the peak season, our hotel fills first in the area. We do often get a challenge with some corporate companies but overall it gets compensated with many options in Downtown. All of them are within walking distance. Our location and product compensate for the absence of alcohol. We have not received a single written complaint about this aspect, so we see this as an advantage.” The pros “Contrary to popular belief, a dry hotel can be as lively and vibrant as any hotel. One of the greatest plus of a dry hotel is a safe and healthy environment that is perfect for families as well as single women travellers. These hotels tend to focus on clean fun and entertainment. Creativity and passion ensure guests an exceptional experience,” explains Voivenel in full praise of the dry segment. With the general consensus molding around the fact that dry hotels provide an accelerated safe and friendly environment El Behi adds, “these kinds of hotels are more familyfriendly which means safer environment and more privacy for family holidays, short vacations or weekend breaks. In addition, these types of hotels generate better profit margin if they are managed properly and set realistic budgets, dry hotels are increasing their presence in the market place gradually but surely. They are trying to diversify their products and focus on locations. Our upcoming property in 2016 will be a 4-star deluxe family and lifestyle resort on Palm Jumeirah, which will also not serve alcohol, call it brave if you like.” MAY 2015 HOTEL NEWS ME
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