Hotel rates in Dubai are dropping drastically due to the current tensions in the Middle East that still impact the travel demand. Although partial flights were carried out last week, the uncertainty in the regional conflict has continued to keep away most tourists and hotels have been forced to deal with vacant rooms.
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According to industry experts, occupancy rates plummeted to approximately 20 percent last week and estimates of the occupancy rates in the forthcoming week indicate that it might start falling into the single digit figures. A hotelier based in one of the luxury hotels in Dubai stated that the market is experiencing an unprecedented slowdown and recovery could take a long time before travelers are ready to visit the region.
The fall in demand has compelled the hotels to reduce their room prices by a large margin. It is reported by industry sources that the average daily rates have reduced by almost half week-on-week. Other resorts have come up with promos of the aggressive kind to entice tourists. As an example, the luxury rooms in FIVE Palm Jumeirah are being sold at AED 349 per person in a stay and dine package in which the total room price can be redeemed on food, drinks and spa. The rooms in the property are usually more than AED 1,000 per night. There are also steep discounts being reflected in the travel portals on some of the hotels. Taj Jumeirah Lakes Towers will have its rooms available at approximately ₹7,219 without taxes and Shangri La Dubai will have its rooms at approximately 13738 without taxes. The same level of price decreases could be observed in Taj Dubai, Lemon Tree Hotel Jumeirah, and Hyatt Regency Dubai Creek Heights, which means that the market is generally soft.
Dubai Hotel Prices
According to industry experts, the month of February is usually a very good month in terms of the hospitality industry in the city of Dubai, but this year has been different. Revenue per available room, according to Manav Thadani, the founder chairman of Hotelivate, was down by up to 25% on some days in the second half of February compared with previous years and this amounts to an overall decline of approximately 3 to 4 percent in the month. Analysts point out that the same affects Indian hotel chains less even in the face of the downturn since their representation in Dubai is disproportionately low. Nandivardhan Jain, MD and CEO of NOESIS Hotel Advisors said that there are less than 1,000 rooms in Dubai under Indian brands and that most of the companies are exposed to management fees and incentive fees but not ownership.
