Sheer luxury at a discount

The Life: Burj Al Arab has teamed up with Groupon to offer special promotions at bargain rates for high net worth individuals during the quiet summer months.

Burj Al Arab teamed up with Groupon Middle East's black label newsletter to raise awareness about the hotel's exclusive offerings. Pawan Singh / The National

When Dubai's best-known luxury hotel tied up with one the UAE's many group buying websites, eyebrows were raised. After all, it seemed odd to have a seven-star property muscling for business alongside spa treatments, brunches and laser hair removal.

Surely an establishment of that calibre would struggle to remain exclusive if it made itself more accessible to the masses?

However, the deals were sent only to those signed up to Groupon Middle East's black label newsletter - an exclusive bulletin targeted towards 250,000 high net-worth spenders.

And they came at a price too.

The four promotions offered last month included a wellness package with high tea from Dh555, Friday brunch from Dh919, a seven-course afternoon tea starting from Dh599 and a Moroccan night starting from Dh699. While many advertise on group-buying websites as a way to boost business and raise their company's profile, the management at Burj Al Arab saw the collaboration differently.

"We recognised that many in the local community felt that Burj Al Arab was inaccessible," the hotel's marketing team reveals. "The offer was not discount-led; our main goal was to raise the awareness about our exclusive offerings at Burj Al Arab. This is a one-off trial and once we have evaluated the results, we will decide on next steps."

While it was an experiment for the hotel, for Groupon Middle East the partnership was an example of the challenges high-end hotels face during the UAE's summer season.

"If you are a hotel you are going to be dependent on the corporate marketing you do," explains Alexander Kappes, the chief executive of the website. "The hotel business uses traditional marketing such as adverts in print and on international television such as CNN or BBC. The Burj Al Arab feels the traditional ways of marketing aren't reaching the people it wants and isn't conveying the message it wanted to convey."

Dubai's summer temperatures do not encourage overseas visitors, but doesn't Mr Kappes feel there is a conflict of interest here - one of the world's most exclusive hotels using a discount voucher website?

"Groupon is one of the few web services that do not take cash on delivery, you have to have a credit card or a bank-enabled debit card to use our site. That means that all our customers are in a salary set or have access to funds that already puts them above others," adds Mr Kappes.

"There is also a natural selection because a high noon tea for Dh599 is something a lot of people can't afford and a lot of people won't afford. But it's all about the experience, it's not about the price point, which is why the offer only goes to a specific amount of targeted clients. It is not open to our entire data base, it is for people looking for an exceptional experience."

The tie-up also illustrates Groupon's bid to align itself with more high-end premium sector clients. It was Groupon which approached the Burj Al Arab first.

It's certainly a shift for the voucher market that has mushroomed since the credit crunch with multiple players all battling for a share.

Michael Nederlof, the chief executive of Aegis Media, feels the venture between Groupon and the Burj involves both partners changing their strategies.

"The coupon companies are changing their business model, so there are now two pillars of revenue rather than just the one. They sit on a lot of data which they can probably get similar revenues from as the revenue share model through discount coupons," he says.

"With the Burj Al Arab offer it is a limited exclusive offer, maybe at premium prices that have a discount. So you have access to this specific product or service but it's only limited to 200 people [for example] so you have to pay a premium and you have to decide in 24 hours and if you do you get a 20 per cent discount."

The targeted campaign certainly puts the Burj experience in easier reach for many - but Groupon will not say how many. It does admit, however, that when the newsletter was emailed out, the company received its highest-ever open rate and the offers were picked up quickly.