Dubai hotel rates remain stable amid shocks

New Delhi | Dubai: Average hotel rates for new bookings remained ‘broadly stable’ in Dubai all through April, as per data shared by RateGain and industry insiders.

People familiar with the matter said this was thanks to the staycation offers that Dubai hotels rolled out for residents and their families in the absence of overseas travellers.

Anurag Jain, executive VP for revenue (APMEA) at RateGain, said according to the company’s analysis of Dubai hotel booking data for April, average hotel rates for new bookings remained broadly stable through April.

"Rates moved from AED 137.28 in the first two weeks of April to AED 135.54 in the third and fourth weeks, reflecting only a marginal 1.3% decline,” said Jain. “This suggests that Dubai’s active booking rates remained resilient, with hotels maintaining pricing discipline despite a value-conscious demand environment.”

ALSO READ | Dubai eases visa rule for single property buyers

At the top line, when cancellations are included, average rates declined more sharply from AED 270.51 to AED 214.79, a 20.6% drop. Jain said this appears to reflect the impact of higher-value cancellations weighing on the overall rate picture, rather than a broad-based weakening in current booking rates.

Saurabh Tiwari, area director for the Middle East region of Indian Hotels Company (IHCL), said according to industry tracker STR’s data analysis of IHCL hotels in Dubai, average hotel rates for new bookings remained stable through the month.

He said consolidated average daily rates of IHCL’s three hotels in Dubai moved from AED 484 in the first two weeks of April to AED 485.36 in the third and fourth weeks, reflecting a marginal 0.3% growth mainly driven by improved performance over the weekend. “Week-on-week too pricing stayed range-bound, with weekdays moving between AED 444 and AED 472 and weekends moving between AED 492 and AED 536 across April,” he added.

Deepak Jain, founder of Mayfair Consultants, expects May to outperform the previous month, as global air connectivity is returning and the number of flights to Dubai have risen. “Some tourists are also contemplating this period for travel due to appealing hotel promotions,” he said.

However, Akshay Jayaprakasan, associate partner at Redseer Middle East, a strategy consulting firm, said he estimates a 60-80% peak drop in tourists during March- April and 37% reduction in tourists for the year. “While residents are serving as a temporary buffer (partly because travelling outside from UAE is also restricted), the outlook for the full year won’t be as easy,” said Jayaprakasan. “Also, average daily rates can be kept temporarily high but the RevPAR (revenue per available room) which factors in occupancy is key. Occupancy is going down and that will impact revenues for hotels," he added.

Tiwari said at the top line level, the consolidated RevPAR of the three IHCL hotels moved from AED 93.5 in the first two weeks of April to AED 157.34 in the third and fourth weeks, a significant 68% growth achieved through 56% increase in the weekday occupancy and 76% increase in the weekend occupancy combined with a 9% growth in ADR.

“Overall, STR data points to a market that was stable in active booking rates, while seeing some growth in occupancies largely due to the staycations and the long stay segment,” he added.