The ability to choose the right business model can be listed among the key prerequisites to success in all business fields. Its importance in business activities cannot be overstated since the model outlines the key principles of collaboration and drawing revenues. This paper discusses and compares the business models of three popular hotels in the United Arab Emirates as Grand Hyatt Dubai, Hilton Dubai Creek, and Ritz Carlton Dubai.
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A business model belongs to the key components of development strategies used in business activities, and this notion is quite broad. Thus, using this term, researchers usually mean the representation of such aspects of the business as the methods of trading, organizational hierarchies, policies, or target markets (Bocken et al. 2014). Grand Hyatt Dubai is among the largest hotels in Dubai, it is owned by the Hyatt Hotels Corporation founded sixty years ago (Hyatt n.d.).
In its business operations, the corporation and all its hotels in different parts of the United Arab Emirates rely on the provision of high-quality services. Grand Hyatt Dubai belongs to the corporation’s luxurious full-service facilities, which is reflected in the number of revenues. According to the statements of its CEO, the corporation is planning to replace its “asset-recycling strategy” with “a fee-driven business model” (Ting 2017, para. 3). Along with other hotels owned by the corporation, Grand Hyatt Dubai is supposed to focus on technological development rather than real estate acquisition (Ting 2017).
Hilton Dubai Creek belongs to the most popular Hilton hotels in the United Arab Emirates. The hotel is owned by Hilton Hotels & Resorts (n.d.), a multinational network of full-service facilities and the key brand of the Hilton Corporation. Just like other hotels in the Hilton chain, the mentioned facility is a part of the global service differentiation model utilized by the corporation (Wang & Chung 2015).
The pillars of the hotel’s business strategy include customer retention and satisfaction since the company has introduced bonus systems and special offers for foreign guests (Hilton Hotels & Resorts n.d.). Belonging to the full-service segment, the hotel also invests in technological advancement to provide space for business events.
Ritz-Carlton Dubai is a famous high-class hotel in the United Arab Emirates. The facility belongs to the Ritz-Carlton (n.d.), a subsidiary of Marriott International headquartered in the United States. The mentioned hotel offers a wide range of accommodation services and a lot of event space for business and personal meetings (Ritz-Carlton n.d.). Similar to the previously mentioned hotels, the Ritz-Carlton Dubai is a part of a large chain.
However, the facts that make its business model special include a limited number of target customers and the lack of service differentiation activities (Bandyopadhyay 2014). Therefore, its model of operation is less flexible in terms of prices if compared to other chains presented in the United Arab Emirates.
In the end, taking into account the wider environment, it is possible to say that the three hotels share a range of similarities related to their business models. They include the focus on customer-centeredness, the provision of premium class accommodation services, and benefits for their long-standing customers. If the analysis is focused on Dubai, the three business models do not demonstrate significant differences due to quite similar pricing strategies.
However, there are obvious differences at the level of hotel chains that are manifested in the degrees of service diversification and the choice of target customers. In the context of the three hotel chains, the business model of Ritz-Carlton uses the most standardized approach to price determination. As a result, it causes a lack of accommodation options for clients from the middle class.
Bandyopadhyay, D 2014, ‘Ritz-Carlton Hotel Company’, Medium. Web.
Bocken, NM, Short, SW, Rana, P & Evans, S 2014, ‘A literature and practice review to develop sustainable business model archetypes’, Journal of Cleaner Production, vol. 65, pp. 42-56.
Hilton Hotels & Resorts n.d., Hilton Dubai Creek. Web.
Hyatt n.d., About Hyatt. Web.
Ritz-Carlton n.d., The Ritz-Carlton Dubai,. Web.
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Ting, D 2017, ‘Hyatt shifts strategy in plan to sell $1.5 billion in hotel real estate over next 3 years’, Skift. Web.
Wang, YC & Chung, Y 2015, ‘Hotel brand portfolio strategy, International Journal of Contemporary Hospitality Management, vol. 27, no. 4, pp. 561-584.