Dubai’s hospitality industry is set for significant expansion, with more than 11,300 new hotel rooms scheduled to open by 2027, including nearly 4,620 entering the market in 2025, according to a report by leading real estate advisory firm Cavendish Maxwell.

Steady Growth in Hotel Supply

Dubai’s hotel inventory witnessed a robust increase in 2024, with 4,255 new rooms added across 19 hotels, representing a 3% year-on-year growth. As of December, the city boasted 724 hospitality establishments with a combined 151,245 keys. Projections indicate that hotel supply will grow by 3.1% in 2025 and by 3.4% in 2026. By the end of 2027, Dubai is expected to surpass 162,600 rooms across 769 hotels, reinforcing its position as a global tourism and business hub.

Luxury Segment Leads the Market

High-end accommodation continues to dominate Dubai’s hospitality landscape. In 2024, approximately 70% of room supply belonged to the Luxury, Upper Upscale, and Upscale segments. This trend is expected to persist into 2025, with the Luxury and Upper Upscale categories accounting for nearly 70% of new hotel developments.

Record-Breaking Tourism Performance

Dubai’s tourism sector set new milestones in 2024, welcoming 18.72 million overnight visitors—an impressive 9.1% increase from 2023’s 17.15 million. The city also secured multiple accolades at the 31st Annual World Travel Awards, including recognition as the world’s leading shopping and exhibition destination. Additionally, Mina Rashid was named the world’s leading cruise port, and Dubai International Airport (DXB) was recognized as the world’s leading airport.

Expert Insights on Dubai’s Growth Trajectory

Gergely Balint, Associate Partner at Cavendish Maxwell, highlighted Dubai’s consistent performance in tourism and hospitality: “The city continues to surpass expectations with its exceptional tourism growth, new hotel openings, and international recognitions. Dubai’s hospitality sector aligns with Sheikh Mohammed Bin Rashid Al Maktoum’s Dubai Economic Agenda D33, aiming to position Dubai among the top three global tourism destinations.”

Economic Contribution of Tourism

Tourism remains a key pillar of Dubai’s economy, contributing AED 236 billion in 2024, up from AED 220 billion in 2023, accounting for 12% of the UAE’s GDP. This growth underlines the sector’s increasing importance in driving national economic expansion.

Hotel Performance Metrics

Occupancy Rates: Dubai’s hotels achieved an occupancy rate of 78% in 2024, marking a 1% increase from the previous year. The Luxury and Upper Midscale segments saw the highest gains at 3% and 2.4%, respectively.

Average Daily Rates (ADR): ADRs remained stable at AED 690, with marginal growth of 0.2% from 2023. The Upscale and Upper Midscale categories saw modest increases of 0.7% and 0.4%, while the Upper Upscale segment declined by 1.7%. The Luxury segment experienced a 1.9% drop despite a 3% occupancy increase, suggesting that higher demand came at the expense of pricing.

Revenue Per Available Room (RevPAR): RevPAR rose by 1.3% year-on-year, driven by stronger occupancy. The Upper Midscale category led the gains with a 1.9% increase.

Dubai’s Global Appeal

Dubai welcomed a record-breaking 18.7 million visitors in 2024, with Western Europe accounting for 20% (3.7 million) of arrivals. South Asia contributed 17%, followed by GCC visitors at 15% and Eastern Europeans at 14%. Northeast and Southeast Asia saw the highest growth, rising nearly 25% year-on-year, driven largely by China’s outbound tourism recovery.

Dubai International Airport (DXB) also set a new record, handling 92.3 million passengers in 2024—an increase of 6.2% from the previous year. December was the busiest month, with 8.2 million travelers passing through DXB.

Hotel Growth Beyond Dubai

The UAE’s hospitality sector experienced widespread expansion, with all Emirates witnessing an increase in ADR. Abu Dhabi led with a 14.5% rise in city hotels and 14.4% in resorts, while Ras Al Khaimah recorded a 14% year-on-year ADR increase, largely due to the reopening of the Waldorf Astoria after renovations. Fujairah also reported a 4% ADR increase.

Occupancy surged in Abu Dhabi city hotels, climbing 10.5%, fueled by corporate travel, the MICE (Meetings, Incentives, Conferences, and Exhibitions) sector, major events, and government-backed tourism initiatives. Ras Al Khaimah, however, experienced a slight dip in occupancy due to new hotel openings such as the Anantara Mina Al Arab Resort and Sofitel Al Hamra Beach Resort. Nonetheless, RAK attracted a record 1.28 million visitors in 2024, up nearly 5% year-on-year. The upcoming Wynn Al Marjan Island resort, set to open in 2027 as the Gulf’s first gaming resort, is expected to significantly boost RAK’s tourism industry.

Meanwhile, Fujairah is enhancing its tourism appeal through government initiatives promoting key archaeological sites such as Al Bidya Mosque, aiming to reach 500,000 visitors annually.

The Road Ahead for Dubai’s Hospitality Sector

With sustained hotel expansion, record-breaking visitor numbers, and strategic investments in tourism infrastructure, Dubai’s hospitality sector remains on an upward trajectory. The emirate’s strong performance underscores its position as a global leader in tourism, business, and leisure, setting the stage for continued success in the years to come.

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