“Dry hotels”, those that do not serve alcohol, are growing in popularity, even with guests that do drink. In fact, the dry hotel market is growing at between 4.5 percent and 5 percent per year, and will be worth $200 billion in the next three years.
For hoteliers, especially in predominantly Islamic regions such as in the Middle East, alcohol is just not a relevant part of profitability for their hotels, a statement said by the panelists at the recent Gulf & Indian Ocean Hotel Investors’ Summit. They know how to make a hotel successful, even without a bar.
Mohamed Awadalla, CEO of Time Hotels Management, which has four brands, said dry hotels simply make good money.
“They are profitable. The (food and beverage profits) might be lower than 25%, but other than that we have seen no discernible difference across our hotels, and we have between 82 percent to 88 percent occupancy,” he said.
What do dry hotels know that non-dry hotels don’t?
That today it is more important then ever to provide highly personalized experiences to guests. And since dry hotels are in competition with non-dry hotels and guest apartments such as Airbnb, they must not just provide these services, but at excel at them.
Awadalla added that in the current economy, an accurate profile of your guests is what counts. “You have to know your market [guest] in order to provide the relevant returns to owners,” he said.
Continually being able to please the traveler in ways that are highly personalized is key. A plan to implement and use guest recommendation solutions that support very niche needs and dive one layer deeper on the usual recommendations – such as local restaurants – is a very important.
Hoteliers should consider taking it one step further such as recommending the perfect yoga studio, church, marijuana dispensary, or even the best place to get a growler of kombucha. It could also mean a specialized recommendation for guests who are in town for a wedding – not just where to drink after the rehearsal dinner but, the one place to go bungee jumping at midnight.
Non-dry hotels should take note that guest retention goes well above and beyond alcohol and their bar area, but requires leveraging deeper guest persona data to understand their wants and needs. It’s clearly working for dry hotels.