UAE hotels increase outsourcing of entire departments

UAE hotels are increasingly outsourcing entire departments to specialist providers to improve cost efficiencies, according to facilities management company Farnek. This shift moves away from the traditional model of using outsourcing only for supplementary staffing during peak periods.

Industry experts suggest this structural change is driven by regional uncertainty, disruptions to air connectivity, and declining revenues. Data from Cavendish Maxwell indicates that Dubai hotel occupancy levels fell by 30.3% year-on-year in the first half of 2026, while average daily rates decreased by 7%.

Rising labor costs are also a significant factor. According to HotelData, labor costs per occupied room rose by 12.8% in 2025. By transferring departments such as housekeeping, maintenance, and food and beverage service to external partners, hotel operators aim to reduce fixed payroll expenses and focus on core revenue-generating activities.