At UAE's super-luxury hotels, New Year rates have hit Dh6,000 a night - can they rise more?

Dubai: Having already crossed Dh6,000 plus levels for a night, how much higher can stays at some of the UAE’s fanciest beachfront properties get closer to the New Year?

Hotel room rates are going through its version of ‘surge pricing’, where tariffs are based on demand for that particular phase.

As the Christmas and New Year's Eve weekend approaches – with January 1 also being a Monday – travel and hotel booking aggregators report that demand for stays on the Palm Jumeirah, Downtown Dubai, and Dubai Marina is already well past the 80 per cent occupancy level.

According to hoteliers, demand is driven by overseas visitors and staycation enthusiasts alike. Some say that hotel rates in Dubai need not hit new peaks even with the current demand surge, as newly opened hotels provide some much needed room capacity. 

Rooms at the Palm Jumeirah, including top-notch resorts such as Atlantis The Royal, Anantara, the Palm Dubai, and Fairmont the Palm, are pretty much sold out. In particular, the luxury suites.

Similarly, hotel room rates at Downtown Dubai average Dh4,176 to Dh6,300 for a stay between December 30 and January 1, 2024. Hotel rooms are still available for the Christmas weekend, and rates are averaging from Dh1,143 to Dh2,645.

In Abu Dhabi, rooms on upscale Yas Island hotels average Dh1,049 to Dh2,800 for the Christmas weekend and Dh1,796 to Dh4,756 over the New Year. Hotels at Ras Al Khaimah’s Marjaan Island – currently experiencing a boom phase as more projects are launched - are seeing Dh3,237 to Dh4,500.

Highest room rates ever?

Are these the highest rates for hotel rooms during the holiday season? According to hoteliers, the answer is 'no'. Top-tier hotel room rates have averaged Dh6,100 to Dh8,000 for last-minute NYE and Christmas weekend bookings.

Sylvia Matei, Cluster Hotel Manager for Holiday Inn and Staybridge Al-Maktoum, said the significant rise in available hotel rooms in the past year could keep rates in check during busy holiday seasons. “The competition among hotels, coupled with the increased room inventory, could potentially mitigate the usual surge in rates seen during such high-demand periods,” said Sylvia.

“As of now, a 3-day and 4-night stay at Dubai hotels averages between Dh1,500 to Dh3,300 for a three-star room, while four-star hotel room rates are Dh4,800 and above.”

Blockbuster weekend

Hotels in the UAE expect nothing less than a bumper end to the year after enjoying record occupancy during the recent COP28, the Dubai Airshow, Big5 Global, and Gitex Global events.

“Hotel occupancy throughout Dubai is booming due to advance bookings from various delegations and media agencies for COP28,” said Raffi Torikian, General Manager of Crowne Plaza Dubai Marina. “Most city-based hotels reached high occupancy levels, maintaining a healthy Average Daily Rate (ADR) throughout the climate summit,”

These trends are expected to continue over the next two weeks as many visitors have opted to stay back in Dubai to enjoy the holiday festivities.

Business vs. leisure travel

Usually, the balance between leisure and business travellers is subject to the events hosted in the UAE and neighbouring countries. “For instance, last year, due to Qatar’s FIFA World Cup, hotels in Dubai experienced a surge in leisure tourism,” said Torikian.

“This year, with events such as COP 28, we experienced a notable upswing in business travel.”

Since many visitors have stayed back and flown in their families after COP28, business travellers have moved to more leisure, family-friendly hotel properties.

Geopolitics is not damping demand

According to Carlo Olejniczak, Vice-President and Managing Director for Booking.com EMEA, the UAE travel booking trend saw a slight drop in the volume of bookings sometime during the last week of October.

“The market recovered fairly quickly, and we were back to 2019 levels almost immediately,” said Olejniczak.

“We are optimistic about demand levels - there is a strong desire to travel well into 2024 as well.”