Dubai hotel recovery: Visitors to return before room rates do, says Accor
Hotel prices are expected to hold up as AI reshapes jobs and long stays gain popularity
The company’s regional leadership said that like other regional markets, Dubai had been affected by the recent disruption to travel demand but expects international visitor volumes to gradually return as airline connectivity improves and major events resume.
Moreover, the French hospitality giant confirmed it is staying the course on its Middle East expansion plans, saying short-term uncertainty will not change its long-term plans for the region.
Accor is one of the largest hospitality companies in the world, owning brands including Fairmont, Movenpick, Raffles, Pullman, Novotel, Grand Mercure, and more. “We have 380 hotels here, so we [are a] big player here… the largest player in the Middle East,” said Duncan O'Rourke, CEO, Middle East Africa and Asia Pacific.
The company operates 380+ properties (101,000+ keys) in the Middle East, Africa and Türkiye, with over 180 in the pipeline. The aim remains to grow to 42,000+ keys by 2030.
“You will have the volume, you won’t see the rates,” said O'Rourke said about room rates, adding that room prices would take longer to return to the levels seen in January and February this year. O’Rourke expects Accor to hit pre-war performance levels by the first to second quarter of 2027.
His comments also come as Dubai continues to push ahead with its long-term tourism strategy despite uncertainty caused by the US-Israel-Iran conflict earlier this year.
Issam Kazim, CEO of the Dubai Corporation for Tourism and Commerce Marketing, said at DET’s first stakeholder meeting earlier this month that the emirate’s tourism and economic plans remained unchanged.
“We remain focused on our D33 goals. That’s unchanged,” Kazim said. “The path remains the same, which is ambitious.”
UAE hotel revenue per available room fell 53 percent year-on-year in March, according to a Barclays report, as recent events in the Strait of Hormuz disrupted travel patterns across the Gulf. In response, UAE hotels have rolled out multiple attractive packages to boost domestic spending.
Hotel prices will not fall permanently
Accor also rejected concerns that temporary hotel discounts could create a long-term drop in room rates. The group said similar concerns emerged after the travel boom which came about immediately after the COVID-19 pandemic, when analysts questioned whether higher hotel prices could be sustained.
“Everybody said all those prices that we never hold (he said referring to prices during the revenge travel era). Guess what? Nothing changed, and the prices now three, four years after, are still the same,” said Jean-Jacques Morin, Group Deputy CEO of Accor.
The company said the bigger challenge after COVID was not pricing, but occupancy levels. “The one thing that we never recovered from COVID that nobody talks about is the occupation, not the pricing,” he said.
Accor said hotels are seeing changes in how customers spend, with travellers continuing to prioritise holidays while adjusting other spending choices. “They don’t buy a car, they won’t go and invest in it, but they don’t want to sacrifice vacation,” insists Morin.
No scaling back
Dubai has continued to focus on expanding its events calendar, tourism campaigns, infrastructure upgrades and aviation capacity as it looks beyond the temporary impact on travel demand. Accor shares a similar optimism.
Morin said it had not scaled back its regional strategy, arguing that the Middle East’s long-term growth outlook remained unchanged despite short-term disruption. He said the region’s success was built on long-term planning, with governments and businesses continuing to invest based on a 10-year vision rather than short-term cycles.
“This region is successful because you do a 10-year plan,” said Morin, adding that long-term investments and confidence in the region’s future growth were key drivers.
To combat the slow period, however, several hotels in Dubai, including the Burj Al Arab, Armani Hotel Dubai, Park Hyatt Dubai and Anantara World Islands Dubai Resort, are undergoing refurbishment during the slowdown period.
Accor itself has four of its properties underdoing refurbishments at the moment, according to O’Rourke.
Hotel workers stayed
Accor said it focused on retaining employees during periods of uncertainty rather than immediately cutting jobs. The company said lessons from COVID showed that reducing staff can create challenges later when businesses need to rebuild teams.
“When they lay people off, the cost afterwards to bring people back, retrain, and bring it back, that was a massive learning curve this time,” said O’Rourke.
The group said it moved employees between hotels and markets where possible, including supporting refurbishment projects and transferring staff to properties in other countries.
Long-stay hotel demand rises
Long-stay hotel demand has also increased as some travellers and residents looked for temporary accommodation solutions during periods of uncertainty. Accor said the extended stay segment performed strongly because some people needed flexible housing options.
“Some people had no homes and they needed to find one, and guess what, the hotel was a very nice way to find a solution,” said Morin.
The company said serviced accommodation has become an increasingly important part of the hospitality market as customers look for flexibility between traditional hotels and residential options.
