The implementation of these recommended strategies, combined with careful and detailed observation of the levels of demand, will allow Abu Dhabi hoteliers to achieve the correct balance between price and demand, and be best prepared for the upcoming Formula 1 Grand Prix.
• Minimum length of stay – Over the course of the Grand Prix week, hoteliers are encouraged to enforce length of stay restrictions of three to four days and covering the Thursday to Sunday period, in order to encourage longer booking periods to generate a positive impact on occupancy levels throughout the entire Grand Prix event.
• Overbooking – Appropriate overbooking levels should be set to counteract the expected rise in cancellations. IDeaS predicts this will be at its highest on the Thursday and Friday before the race, based on the data collected.
• Optimal pricing strategies – Due to the weekend in Abu Dhabi falling on a Friday rather than on the event day itself – Sunday, it will be important to monitor the booking pace not only on Sunday but also on the surrounding corporate weekdays. In addition, Monday and Tuesday after the event could also see increased demand if regular corporate transient and group business shifts away from Sunday. IDeaS recommends a careful and direct marketing strategy be put into place as well as a close monitoring of the booking pace of base corporate business on both the event day and surrounding days.
• Find the appropriate balance – Careful attention should be paid to an appropriate balancing between base business and the expected short lead time (<80 and <30 days) in the individual segments.
• Pre-payment plans – To minimize the impact of costly last-minute cancellations, IDeaS recommends booking fences for both group and individual business. By clearly stating the terms and conditions of pre-payment and cancellations, hotels will be able to dramatically minimize any potential negative impact on revenue.
The Grand Prix is to be held on November 1, 2009 and it is expected to give the local economy a major boost. Although no concrete figures are available on the economic impact, the Bahrain International Circuit claims that its 2006 Grand Prix generated $394m in direct income to businesses and traders in the Kingdom, worth almost 3% of GDP. For more details on IDeaS strategic recommendations for South African hotels, please view the complete Abu Dhabi Grand Prix Report here http://go.ideas.com/WP8/.
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