Dubai’s mid-market hotels maintain higher occupancy than premium ones in H1

Dubai’s mid-market hotels maintained comparatively higher occupancy than those in the premium sector in H1 2026 as regional airspace disruption and heightened geopolitical uncertainty weighed on hotel demand, says leading real estate advisory and property consultancy, Cavendish Maxwell.

Hotels in the Upper Midscale category secured the highest occupancy rates at nearly 66%, while Midscale properties recorded rates of almost 64%. 

By contrast, Luxury and Upper Upscale hotels and resorts averaged 51% and 52% respectively, the company added.

Average occupancy across all hotel classifications was 56% from January to June, down 30% on the same time last year. However, the annual decline has narrowed since April, with targeted promotions and staycation campaigns boosting hotel demand among domestic travellers in recent months. Cavendish Maxwell expects occupancy to continue to recover during the rest of the year as international travel takes off again.

Dubai Airport Passenger Traffic

Passenger traffic at Dubai International Airport (DXB) softened during the first five months of 2026, declining by 31.7% year-on-year to approximately 26.6 million passengers. The decline was largely driven by regional airspace disruptions arising from heightened geopolitical tensions in the region, alongside seasonal travel patterns that affected international passenger flows. Several international airlines also temporarily suspended or reduced services to Dubai, with some routes expected to resume later in 2026.

Despite the disruption, Dubai’s home carriers, Emirates and flydubai, maintained regional and international connectivity, adjusting schedules where required. Emirates has also continued to expand its network, announcing a new year-round daily service to Helsinki from October 2026, alongside additional frequencies to Cape Town, Copenhagen and Phuket. More broadly, UAE carriers including Etihad and Air Arabia continued to operate, helping maintain connectivity across the wider UAE.

Dubai World Central (DWC) also recorded softer passenger traffic, with approximately 380,000 passengers during Q1 2026, representing a 21.4% year-on-year decline. Together, the performance of Dubai’s two airports highlights the impact of regional disruption on aviation demand during the period.

Looking ahead, passenger traffic at DXB is expected to improve during the remainder of 2026 as air connectivity is restored and travel conditions become more stable. Full-year passenger volumes are anticipated to range between 67.6 million and 79.3 million, assuming a gradual recovery in regional connectivity during H2 2026. The pace of recovery, however, will depend on the restoration of suspended routes, the return of international travel demand and the broader stability of regional aviation conditions. -TradeArabia News Service