Farnek urges UAE hotels to get sustainable
IFM service provider says UAE hotels facing up to $1.1m (AED3.8m) in lost revenue and need to get sustainable and cut operating costs
UAE’s hotel operators are preparing for a challenging period with the onset of Ramadan and the subsequent summer season according to Markus Oberlin, CEO Farnek.
Oberlin was speaking on the sidelines of Arabian Travel Market 2018, which opened on 22 April.
Chris Hewett is the director TRI Consulting, a renowned hotel performance benchmarking firm, estimated that RevPAR (revenue per available room) in 2018 could drop by as much as 7%, as compared with last year.
The Q1 2018 industry figures released by STR (another global hotel performance data aggregator) support TRI’s forecast with RevPAR down 2.6% and 4% in Dubai and Abu Dhabi respectively.
“Converting that into hard cash, a hotel with 250 rooms, running at 80% occupancy, with an average rate of $205 (AED750), could lose as much as $1.1m (AED3.8m) in revenue over the course of a year and that’s not taking into account their F&B operation, nor does it take VAT or inflation into the equation. So, hotels will need to make savings, to protect their bottom lines, without compromising guest service levels,” said Oberlin, “the question is how and where?”
Oberlin suggested one area could be waste management.
On average UAE hotels send 1,200 tonnes of waste to landfill, half of which is food waste.
“That’s the equivalent of filling an average hotel room, every five days and works out to 8.5 kgs per guest, per night, compared with 1.2 kilos in Europe. And with Dubai Municipality introducing new tipping fees next month - of $22 (AED80) per tonne for general waste - it could become an expensive proposition.
“During Ramadan the waste per guest, per night can increase by as much as 50%, much of it uneaten food and that’s against a backdrop remember, of lower occupancies and softening rates. A sound recycling procedure can reduce waste by 25%,” Oberlin said.
Oberlin suggests that by using internet-based benchmarking software, such as Hotel Optimizer, the management teams can reduce their energy and water usage.
“Currently, the average annual utility bill for a five-star city hotel in Dubai is around $2.05m (AED7.5m). It is not unusual for hotels to save 15-20% or put another way, $400,000 (AED1.47m),” said Oberlin.
“Even simple devices such as A/C modules, LED lights and water aerators can dramatically reduce utility bills,” he added.