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Why are Hotels so Cheap in Dubai? Check Out What We Found!

By: Swena Kalra

Edited By: Scott Sidders

Updated on November 6, 2023

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For those who have been to Dubai, one of this city's most notable features is its extreme wealth. Whether it's the luxury cars driving around or the opulent hotels and shopping malls, there's no denying that Dubai is a city of excess.

But despite all this wealth, Dubai is a very affordable place to stay. Hotels in Dubai are some of the cheapest in the world to the extent that you can find a 4-star property for less than $40, and there are plenty of ways to save money on accommodation. So why are hotels so cheap in Dubai?


There are a few reasons for this. Here are some of the most significant ones:

1. Dubai is a Tax-Free City

The Palm island panorama with Dubai marina in the background.

One thing that makes Dubai a popular tourist destination is that it is a tax-free city. This means that prices for goods and services are much lower than in other parts of the world. Hotel rooms are no exception. In Dubai, you can find luxury accommodations at a fraction of the price you would pay in other major cities. Of course, there are also many budget-friendly options available. Whether you're looking for a 5-star resort or a simple bed and breakfast, you're sure to find something to suit your needs and budget in Dubai.

2. Competition

Holiday resort by the pool on the Palm Island in Dubai with a view of Jumeirah.

Another important reason is the sheer amount of competition. In a city with hundreds of hotels vying for business, prices must be low to attract guests. This is good news for travelers on a budget, but it also means that fewer amenities and services are often available. However, with some research, it is still possible to find Dubai hotels that offer great value. By shopping around and comparing rates, it is possible to find affordable accommodations that don't skimp on quality or comfort.

3. Abundance of Hotel Rooms Available

Aerial skyline of downtown Dubai filled with modern skyscrapers.

The city is home to hundreds of hotels, ranging from ultra-luxurious resorts to more budget-friendly options. However, it's not just the sheer number of hotels that makes Dubai a great place to find a deal. The city is also located in a relatively undeveloped part of the world, so construction costs are lower, and hotel rooms are often cheaper. In addition, Dubai's robust tourism industry means that there is always a high demand for hotel rooms, giving guests plenty of bargaining power regarding rates. As a result, visitors to Dubai can often find amazing deals on hotel rooms if they know where to look.

4. Hotels Offer Discounts and Promotions

Resort swimming pool on The Palms island.

Hotels in Dubai offer a variety of discounts and promotions throughout the year. That is why hotels are generally cheaper in Dubai than in other cities. Many deals and promotions are for specific periods, such as during the summer or Eid. Other discounts and promotions are offered for extended periods, such as when you book a room for a week or more. Many deals and promotions are also for specific types of rooms, such as suites or deluxe rooms. In addition, some hotels offer special rates for groups or families. As a result, finding a hotel room in Dubai that is significantly cheaper than in other cities is often possible.

5. The Currency Exchange Rate is Favorable

United Arab Emirates Dirham

The currency exchange rate is an essential factor to consider when planning a trip. A favorable rate can make a destination more affordable, while a less favorable rate can make it more expensive. For example, the currency exchange rate between the United Arab Emirates Dirham and the United States Dollar is currently suitable for travelers from the US. As a result, hotels in Dubai are relatively inexpensive compared to other major cities. Travelers from the US can take advantage of this by staying in Dubai for less than they would elsewhere. However, it is essential to remember that the currency exchange rate constantly fluctuates, so it is wise to monitor the rate before making any final travel plans.

6. Lower Labor Costs

Laborers working on modern construction site works in Dubai.

A large part of why hotels are so cheap in Dubai is the low labor costs. In Dubai, foreign workers comprise a large proportion of the hotel workforce. These workers are often paid relatively low wages, which helps to keep costs down. In addition, many of these workers are on short-term contracts, meaning they are not entitled to the same benefits and protections as full-time employees.

These are just some reasons why hotels are so cheap in Dubai. Understanding these factors makes it possible to find great deals on accommodation in this fantastic city.

How to Save Even More Money on Dubai Hotels?

Tourist resort pool at night in Dubai.

There are a few ways to save even more money on hotels in Dubai. Some of them are:

1. Look for discounts and promotions: As mentioned above, hotels in Dubai offer a variety of deals and promotions throughout the year. That is why hotels are generally cheaper in Dubai than in other cities. You can find these deals and promotions on the hotel's website or online.

2. Compare prices: Dubai is a competitive market, so many hotels are often vying for your business. As a result, it is essential to compare prices before booking a room. You can use an online travel site like Expedia or to compare prices from different hotels.

3. Be flexible with your dates: If you are flexible with your travel dates, you can often find better deals. For example, rates are often cheaper during the week than on weekends. You can also save money by traveling during the shoulder season (between the high and low seasons).

4. Negotiate: It is always worth trying to negotiate a better rate, especially if you stay for an extended period. Many hotels will be willing to offer a discount if you book a room for a week or more.

5. Use loyalty points: If you are a hotel loyalty program member, such as Marriott Rewards or Hilton Honors, you can often use your points to get a discount on your room rate.

Following these tips can help you save even more money on hotels in Dubai. With a little effort, you can find great deals on accommodation in this fantastic city. If you're planning your next trip to Dubai, consider checking out our article dedicated to things to do in Dubai.

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