Dubai, super discounts in hotels, but empty rooms

A loss, per day, of over half a billion dollars. Prices discounted, per room, from 30 to 80 per cent. So much so that the authorities have urged Dubai's hotels to keep room rates unchanged, focusing on domestic tourism. The watchwords: steady nerves to show resilience and certainly not defeat in the face of the 'temporary events' that are battering one of the busiest tourist hubs, as well as a transit hub for travellers to Australia and the Far East.

According to estimates by theWorld Travel & Tourism Council, the regional conflict between the United States, Israel and Iran is costing the Middle East tourism sector the equivalent of USD 600 million per day. Estimates put the cost of international visitors to the region at EUR 178 billion in 2025 alone, with 526,000 passengers a day at the regional airport hubs of Abu Dhabi, Dubai, Doha and Bahrain.

In January, Dubai's 827 hotels recorded an average occupancy rate of 86 per cent, according to data from the emirate's Department of Tourism. Pending updated figures, occupancy is reportedly down to 20%, but for many hotels it is in single digits. And with the drop in international arrivals, hotels have reorganised, turning both to the domestic market - with promotional packages - and ancillary revenue sources such as restaurants, spa and wellness packages with kids' club activities, to soften the blow.

Prices per room have plummeted, from 30 to 80 per cent, but, to Realty Today, Mohamed Alabbar, founder of Emaar Properties, explained that these discounts do not mean that the Dubai real estate market is collapsing. Investors and buyers continue to see Dubai as a safe place to invest. Temporary changes in hotel prices should not be interpreted as a sign of a wider problem. The fundamentals are sound and there is no long-term weakness in the real estate market. By mid-2025, the UAE had a total of 100 active hotel projects with a total of 25,470 rooms.

According to the Dubai Hospitality Sector 2025 Market Performance by real estate advisory Cavendish Maxwell, Dubai's hotel supply in 2025 reached 158,700 rooms in 770 properties, almost 70 per cent of which were in the luxury category. Last year the city added 3,400 rooms, for an annual growth of 2.2 per cent, while ten new hotels entered the market. And looking to the future, a further 4,600 rooms are expected to be delivered this 2026, mostly in the luxury and high-end segments.