Dubai has expanded its hotel inventory significantly in the first half of 2024, delivering more than 2,700 new rooms, with 75 pc in the high-end luxury and upper upscale categories.

According to a report by real estate consultancy Cavendish Maxwell, a total of 12 new hotels were opened during this period, raising Dubai’s hospitality capacity to 716 establishments, offering nearly 149,750 rooms. 

It says that an additional 40 hotels are expected to be launched by the end of 2025, adding 10,100 rooms to the market, with further expansion planned through 2027.

Hotels in the 4-star category saw the sharpest rise

The statement adds that in the first six months of this year, hotels in the 4-star category saw the sharpest rise, with a 216 pc increase in new rooms compared to H1 2023. 

The luxury segment also experienced strong growth, with 1,681 5-star rooms opening, a 111 pc rise from the same period last year. High-end accommodations continue to dominate Dubai’s hospitality landscape, accounting for 67 pc of the market.

The report says that occupancy rates in Dubai reached 78 pc in H1 2024, surpassing pre-pandemic levels from 2019. Abu Dhabi hotels also saw gains, with city hotels achieving 83 pc occupancy. 

Average Daily Rates (ADR) in Dubai reached a six-year high at AED 720, a 4.6 pc increase from H1 2023. Other UAE regions, including Abu Dhabi, Ras Al Khaimah, and Fujairah, also recorded increases in ADR.

The statement adds that Western Europe remained Dubai’s top source market, contributing 20 pc of the 9.31 million visitors in H1 2024, followed by South Asia and Eastern Europe.

Gergely Balint

Gergely Balint, Associate Partner at Cavendish Maxwell, emphasised Dubai’s continued leadership in hospitality, noting that the sector is a key pillar of the emirate’s economic diversification strategy. 

With approximately 15,000 new rooms slated for delivery by 2027, Balint stressed the need for innovation and sustainability to maintain Dubai’s competitive edge in the global hospitality market.

“Dubai’s world-leading, record-breaking hospitality sector continues to flourish, thanks to the emirate’s robust economy, growing investment in infrastructure and increased focus on experience-based tourism. A global hub for business, events, tourism and leisure, Dubai welcomed 9.31 million visitors in H1 this year, with Dubai International Airport handling a record 44.9 million passengers in the same period,” says Balint.

“Hospitality is firmly established a cornerstone of Dubai’s economic diversification, and, with around 15,000 new rooms set for delivery between now and the end of 2027, shows no sign of slowing down. However, with rising construction costs and growing competition, the industry will need to prioritise innovation, sustainability and unique experience to sustain the momentum. Adapting to evolving trends, sustaining its unrivalled capacity for diversity and innovation, and leveraging emerging opportunities will further enhance Dubai’s position as a world-leading hospitality destination, and help the city achieve its Dubai Economic Agenda D33 objective of becoming one of the top three global tourism destinations,” he adds.