Dubai Visitors Drop 44% as UAE Hotels Target Short-Haul Markets

By Elena Vasquez

Dubai received 6.97 million international visitors in the first eight months of the year, down 44%, according to the Dubai Department of Economy and Tourism. Hotel occupancy across the United Arab Emirates (UAE) stood at 67.6% in September, down 12.3 percentage points year over year, CoStar data showed.

What do the occupancy figures show?

Cavendish Maxwell said luxury and upper-upscale hotels (higher-priced tiers most exposed to long-haul guests) recorded the steepest occupancy declines. Budget and midscale hotels fared better as their arrival mix broadened; for midscale properties, regional, domestic and corporate demand provided support.

That divergence shifts relative occupancy strength toward budget and midscale inventory, although the figures do not establish market share. It also threatens revenue mix: long-haul, high-spending guests had supplied premium chains’ core demand, and their absence removes the segment best placed to support premium rates.

Sellers tied to luxury UAE inventory face weaker distant-origin demand, while regional, domestic and corporate channels have supported midscale hotels.

Which markets can replace long-haul guests?

Hotel operators are rebuilding demand by targeting India, China, Russia and Gulf markets after the U.S.-Iran war and a March flight disruption. Higher airfares continue to suppress long-haul arrivals, while Middle East unrest has hit luxury hotels that depend on international guests.

IHCL Vice President Saurabh Tiwari, who covers the Middle East, Maldives and Sri Lanka, said: “We’re targeting short-haul markets like India, China, and Russia, that are a five- to six-hour flight away.” IHCL operates the Taj brand.

Tiwari also said: “Since jet fuel prices are more expensive than before, it is hard to expect people to come from long-haul markets like the Americas or Australia. Attracting visitors from long-haul [markets] is going to be wishful thinking.”

He said India had remained IHCL’s most reliable source market (traveler origin country) through the crisis, citing accessibility and flight prices below those for long-haul destinations.

For travel sellers, the practical shift is toward source markets reachable within a short flight. Airfare-sensitive products aimed at the Americas and Australia face higher barriers, while India, China, Russia and nearby Gulf states become the nearer-term demand pool. Tiwari described company strategy, not a measured regional booking split.

How are operators repricing demand?

Majestic Hotels said long stays now make up 25% to 30% of its business and expects fourth-quarter rates to run 15% to 20% below last year. IHCL cut rates by up to 40% at the crisis peak, while lower room prices also made Dubai more affordable.

Those moves trade price for volume. Longer stays can support occupied nights and occupancy, but Majestic’s rate forecast points to pressure on average daily rate (ADR), a room-revenue measure per occupied night. The mix favors sellers able to fill inventory with longer stays and regional demand instead of premium long-haul guests.

When will business return to 2025 levels?

• Ishraq Hospitality expects a return to 2025 levels this quarter.
• IHCL does not expect business to reach 2025 levels until the fourth quarter of 2027.

The estimates are operator forecasts, not measured recoveries, and the broader occupancy and visitor data do not validate either date as a market-wide timetable. Future occupancy, booking and rate disclosures will test the company guidance; until then, sellers should treat the dates as planning scenarios rather than dependable demand forecasts.

What do short-term rental bookings signal?

Short-term rental operators (nonhotel stays booked by night) report a more balanced guest mix and point to European winter schedules and December events as nearer-term supports.

• November booked nights fell 36%.
• December booked nights fell 8%.
• January booked nights fell 6%.

AirDNA supplied the booking data. These are forward bookings (uncompleted stays), not realized occupancy or room revenue. The narrowing monthly declines suggest better seasonal demand, but all three periods remain below their comparison baselines.

For sellers, near-term inventory and marketing should favor India, China, Russia and Gulf-linked demand. The next test is whether winter schedules and December events convert AirDNA bookings into completed stays, and whether rate cuts stabilize occupancy before the longer recovery targets arrive.