Thursday, Aug 20, 2009
By Stefania Bianchi
Of ZAWYA DOW JONES
DUBAI (Zawya Dow Jones)--Corporate iftar receptions when firms host lavish banquets for Muslims breaking fast during Ramadan are the latest Dubai institution to fall victim of the financial crisis.
Dubai-based firms are scaling back the cost of hosting the events, which aren't only social gatherings, but also important public relations opportunities to woo new and existing business partners against the backdrop of some of the city's most luxurious hotels.
Demand for Ramadan tents - the typical setting for iftars - has fallen, while hotels are recording lower corporate bookings as companies make cash-savings moves amid a property and economic slump in the emirate.
Shakhil Ahmed, who runs the Sharjah-based Al Mumtaz Tents Co., which manufactures and leases out Ramadan tents, says business this year has fallen by almost quarter for the annual event.
"Those companies that are still reserving tents are looking for some of the cheapest options," he told Zawya Dow Jones in an interview.
Many hotels are also moving their iftar events indoors to save on extra tent rental and air-conditioning costs, he says. The cost for a company to hire an entire Ramadan tent for an evening at one of Dubai's top hotels is AED50,000 ($13,612) for up to 200 people, including food, drinks and service, according to one event organizer.
Jumeirah Group, Dubai's largest luxury hotel operator and manager of the emirate's iconic seven-star Burj Al Arab, says its corporate bookings for Iftar have slowed.
"The booking pace has been slightly slower than last year," said Frank van der Post, chief operating officer of the Jumeirah Group. "This seems to be in keeping with trends we have observed across the board in travel and event sales, as people are making their decisions and booking later than they have been in previous years."
BUSINESS OPPORTUNITY
Ramadan, which is expected to start this weekend in Dubai, is an important Muslim religious and social event in the emirates. During the holy month in Dubai, Muslims fast during day light hours and can only eat after the traditional firing of a cannon to signal sun set and evening prayers.
As well as bringing Muslims together, iftar events are also considered one of the most effective ways for businesses in the emirate to connect with their customers on a social platform.
"Iftars are key business opportunities for relationship-building at all levels," said Eileen Wallis, managing partner of Dubai-based public relations firm The Portsmouth Group. "Often, you can gain access to senior executives in a relaxed environment."
Wallis says amid the downturn her clients are hosting "more selective and targeted events".
As large corporations scale down their Ramadan events, small-to-medium firms are feeling the knock-on effect.
Ihab Ahmad, Dubai-based operations manager for Al Baba Sweets, a family-owned Lebanese Arabic pastry and sweet maker, says Ramadan is key for his firm, but expects business to slow this year.
"Ramadan is essential. It's equivalent to 11 months of business," Ahmad said. "Hotel demand is down a bit because of decreased occupancy, but retail business is quite the same."
By Stefania Bianchi, Dow Jones Newswires; +971 4 3644967; stefania.bianchi@dowjones.com
(Nour Malas in Dubai contributed to this story.)
Copyright (c) 2009 Dow Jones & Co.
(END) Dow Jones Newswires
20-08-09 0901GMT
