Dubai hotel rates plunge as Middle East conflict stalls bookings

Following the limited resumption of flights last week and travel concerns due to the escalating conflict in the Middle East, hotel rates in Dubai are crashing in the absence of new bookings.

"Hotel occupancy had dropped to around 20% last week. And this week's forecast to be in single digits. It will take a while to rebound, unfortunately," said a hotelier working at a luxury hotel in Dubai.

Another person familiar with the situation said average daily rates have dropped by 50% week-on-week. As per a new ‘stay and dine’ offer, luxury rooms are available from AED 349 per person at luxury resort FIVE Palm Jumeirah, with the entire room charge redeemable across dining, beverages and spa experiences throughout the resort. Industry insiders said luxury rooms are usually priced upwards of AED 1000 at the resort.


Chains such as Indian Hotels Company and Lemon Tree Hotels have properties in Dubai.

As per rates published on a popular travel portal, a room at Taj Jumeirah Lakes Towers is available for Rs 7219 plus Rs 2124 in taxes for a stay on March 11, while a room at Shangri-La Dubai is available for Rs 13,738 plus Rs 3591 in taxes. A room at Taj Dubai is available for Rs 12,489 plus Rs 3310 in taxes for the same date while a room at the Lemon Tree Hotel in Jumeirah was available for Rs 5926 plus Rs 1708 in taxes.

Lemon Tree Hotels founder Patanjali Govind Keswani said rates and occupancies ‘were somewhat down.’ A room at Hyatt Regency Dubai Creek Heights is available for Rs 5442, plus Rs 1724 in taxes for a stay on March 11, while a room at Grand Hyatt Dubai Resort & Waterpark goes for Rs 8992 plus Rs 2523 in taxes.

Read more: Kharg Island: The oil island in Gulf at the centre of Trump’s Iran war calculations

February is typically a strong month for hotel performance in Dubai, but revenue per available room declined by up to 25% on some days in the latter half compared to last year, resulting in overall revenue per available room being 3-4% lower for the month, said Manav Thadani, founder chairman of Hotelivate. “The full impact of the conflict remains uncertain and will require a wait-and-watch approach,” he added.

There are currently fewer than 1000 rooms under Indian brand management in the Dubai market, as per Nandivardhan Jain, MD and CEO, NOESIS Hotel Advisors. “In that context, any short-term fluctuation in Dubai’s hotel rates or occupancies is unlikely to have a meaningful bearing on the overall financial performance of Indian hotel companies,” he said. “Their financial exposure in overseas markets such as Dubai is largely limited to management and incentive fees,” he added.

In October last year, The Leela Palaces Hotels & Resorts announced that it received board approval to sign binding agreements to acquire a 25% stake in a luxury beachfront resort in Dubai's Palm Jumeirah. The chain said private funds, managed by Brookfield, will acquire the balance 75% stake.