Palazzo Versace Dubai introduced a pioneering approach to booking luxury experiences. Launching a bidding platform, which ran its first auction-style system in late November, guests had the unique opportunity to bid on eight packages. Packages included a stay in a hotel room for two (opening bid AED100), a yearlong membership to the leisure facilities at the property (opening bid AED500), or two nights at Palazzo Versace Dubai followed by two nights in Mauritius, including lunch and a massage (opening bid AED600), among others.
The offerings were not ‘short-changed’ deals as might be expected from such a bold approach, but it is a move that incites questions about the evolution of the luxury hotel industry post-COVID-19. Following challenges related to travel and financial stability, the pandemic seemingly reinforced either a hunger for escape, or a desire to embrace ‘homebody’ lifestyles. Auctioning has its own connotations – stirring desire, competition, excitement, adrenaline, fantasy – but is also more associated with the market and sales. Hotels rely heavily on sales, but often forgo this as their primary public image or agenda.
The bidding format appeals to a broader range of potential guests who may have been out of reach of Dubai’s ultra-high-end and sometimes exclusive-bordering-on-exclusionary luxury offerings, but will it shift the perception of Palazzo Versace into a more accessible luxury realm? Monther Darwish, Managing Director of Palazzo Versace Dubai and founder of Palazzo Hospitality, speaks to Katrina Kufer about how the property is taking its customer-first approach a step further.
As winner of the Young Business Leader of the Year award in 2007, it is of no surprise that Emirati Monther Darwish, Managing Director of Palazzo Versace Dubai and founder of Palazzo Hospitality, has innovation in mind. With a philosophy emphasizing consistency, perseverance and authenticity, it came firmly into play during the extreme test the hospitality industry endured through the pandemic, when occupancy rates of Dubai’s 715 hotels plummeted below 10%. Darwish views challenges as opportunities, and his leadership oversaw the Palazzo Versace Dubai focus on retaining guests, showcasing their products while competitors took breathers, seek untapped channels in the market, and reassure partners’ trust by – figuratively speaking – “keeping calm and carrying on”.
However, 2021 proved a year of recovery for the industry. Business and travel resumed varying degrees of normalcy, and Expo 2020 encouraged cooperation between public and private sectors, and local and international exchange, elevating the hospitality sector across all levels. For Palazzo Versace Dubai specifically, the global resurfacing allowed the hotel to exceed expectations. Data on the number of visitors to the city – 5.51 million in 2020 and 3.85 million from January-September 2021 [Dubai Tourism] – reflected in the hotel’s occupancy levels, which registered figures higher than 2019 for the same period. The city’s occupancy rate for 2021 of comparable properties, meanwhile, averaged 54% [Dubai Tourism].
Palazzo Versace Dubai has a specific DNA – a fashion hotel unmistakably bearing the bold taste of its mother brand with a strong identity that imprints upon guests. Whether it’s more-is-more aesthetic manifesto with delightfully maniacal detail-orientedness is to the tastes of the wider public or a more niche palate, what is unmistakable is its broad-spectrum of luxury facilities, dynamic rotating packages, and thereby almost by default, inclusivity. While it fits seamlessly into the ultra-luxe hospitality environment that dominates the city – 45.7% of the market is 5-star hotels [Dubai Tourism] – it also is grounded by its ability – and choice – to cater to diverse nationalities, tastes and sectors. It is this corporate ethos which logically – if counterintuitively – resulted in the introduction of a bidding platform, yet another facet of the brand’s inclusivity: creating pricing equity in direct response to consumer demands.
You’ve been associated with Palazzo Versace since 2013. What changes did you identify needed to happen, and how have you seen them come into fruition?
I do believe that, when it comes to hospitality, the UAE market is somehow saturated. There are new hotel openings happening every month or so, with many big hotel chains expanding their portfolio here with different segmentations. Palazzo Versace Dubai is an independent property, and this is what makes it unique. From the beginning I have thought of an aggressive approach, where you leverage on your strongest points to differentiate your product from the many others. This is what we’ve been doing here – launching innovative initiatives across all the business’s pillars – rooms, F&B and spa, and expanding these with new offerings. We’ll be launching soon at Palazzo Versace Dubai the property’s first luxury flower and gift shop; we have already opened a beauty salon – anticipating of course our guests’ needs.
How did COVID-10, and now Expo 2020, affect the hotel’s business?
The pandemic was harsh, true, but looking back at 2020 now – it all seems to have happened so long ago. The hospitality industry suffered the hardest hit. If in February 2020 we were beyond optimistic as the numbers on the papers were looking too good, March was the real wakeup call to reality. It was not easy to keep a hotel open with 5% occupancy, but we used all that time to improve the sanitation protocols at all levels, front and back of house, we kept communicating with our guests through our social channels and showed them how we prepared to welcome them back. We worked all the time to retain their top mind recall. After the lockdown was over, the occupancy started to rise up, and we had good summer months only by capturing the local staycation segment.
In what way does Palazzo Versace set itself apart from other ultra-luxury properties in Dubai in terms of its facilities, packages, and offerings?
There’s one major quality that defines us as a hospitality brand – we’re unstoppable. The management team and I are a machine of new ideas that indeed set us apart. Focusing on the local market has been the wisest initiative and we worked on different campaigns, new F&B offerings, and wellness packages to increase occupancy. We also expanded our e-distribution footprint to bring onboard various marketplaces and affiliates.
Palazzo Versace Dubai was also the first hotel in the region to partner with a BNPL service to offer services in four interest-free installments. For the international markets, we introduced an exciting partnership with LUX* Hotels and Resort in Mauritius and Maldives, capitalizing that time on destinations which were opened.
What inspired the idea behind the innovative bidding platform for the hotel packages?
I often interact with our regular guests who come to Palazzo Versace Dubai for holidays and for business, and one of their questions was, “Why don’t you bring equity to the pricings?” We have a strong database, and we asked our loyal guests what would bring them back to Palazzo Versace Dubai – new offerings, new facilities, new restaurants? Most of them answered the pricing point, hence the idea of having a bidding platform where they purchase an experience at their own desired price.
Bidding platforms exist for other luxury areas: artwork, watches, even property. In what way do you think that hotels will or could benefit from this kind of system?
In this digitalized world, where you can buy anything and anytime with the ease of a click, a new addition to their purchasing experience is very welcome. We have our e-commerce side of the business that works exactly as a shopping website – then why not the bidding site and make the booking process more interactive and fun at the same time?
Do you foresee this as the future of booking and the kind of experiences that visitors, especially considering a more ‘choice oriented’ culture post-COVID, will expect?
It will be a trend as you can customize and tailor each package to suit different tastes and needs. This is not something you can purchase from an OTA or a travel agent. These unique offerings are there to bid on so that you do not worry at all when you come and stay – you have your Versace-designed room, your relaxation booked, your dining experiences elevated.
Palazzo Versace Dubai has positioned its business pillars – rooms, F&B, spa – as ultra-luxe, and the marketing carefully forges strategic alliances, from celebrity endorsements to events, to assert the property as a Dubai hot spot. But this does not overshadow the competitive environment it calls home. The UAE market, despite possibly bordering on oversaturation, still is a place with room for fresh ideas and exciting new concepts. Taking heed of Darwish’s insights, it is merely a question of a brand’s consistency and sustainable innovation, and it remains to be seen what Palazzo Versace Dubai pursues: normalization of a new booking methodology that will spread across brands, or a new response to customers’ ever-changing needs?
About The Editor
Katrina – arts, culture and lifestyle writer and editor (BFA Fine Arts, Parsons the New School for Design; MA Contemporary Art, Sotheby’s Institute of Art) – has lived in 16 countries and written for a multitude of prestigious publications in the MENA region. Based in Dubai, Kufer is interested in observing new environments and exploring cross and inter-cultural connections.