Dubai's hospitality sector: room rates drop below Dh100

Only severe cuts to fees and commissions on hotel bookings can ensure the longer term survival of three- and four-star properties in Dubai, according to industry sources.

The room rates have already dropped below unsustainable levels at some of the city’s three- and four-star hotels. Industry sources confirm that entry and mid-tier hotels are excessively hit by the pandemic fallout. And even dropping room rates have failed to bring the guests back, because in most cases air travel to the key sourcing countries are yet to take off.

Some three- and four-star hotels are stuck with occupancy rates of below 20 per cent for the better part of this year.

Praveen Shetty, Chairman of Fortune Group, which owns or operates four-star hotels said, “Many single hotel owners with unbranded properties - especially in the Deira area - have dropped rates below Dh50 per room per night on OTA (online travel agent) platforms.”

“The guests who typically book at four- or three star stays are unlikely to return in sizeable enough numbers for the next six months at least. These properties are overly dependent on travelers from the Subcontinent and the Far East – and they will not be rushing back unless a COVID-19 vaccine is found and proved to be effective", he added.