Dubai hotel occupancy tops 81% in H1 as tourism surges, says Cavendish Maxwell

Hotel occupancy in Dubai reached more than 81 per cent in the first half of 2025, marking a 4.5 per cent year-on-year rise, according to new research from real estate advisory firm Cavendish Maxwell. The emirate also welcomed nearly 10 million international visitors during the period, up 6.1 per cent compared to the same time last year.

Cavendish Maxwell’s H1 2025 hospitality sector performance report shows the average daily rate (ADR) across Dubai hotels and resorts climbed 5.5 per cent year-on-year to AED745. With the peak tourism season approaching, 19 new hotels with over 5,000 rooms are set to open by the end of 2025, bringing Dubai’s total hotel inventory to 157,144 keys across 748 properties. Almost 900 rooms across five hotels were delivered in the first half of the year.

Vidhi Shah, director, head of commercial valuation at Cavendish Maxwell, said: “The first half of this year has seen yet another outstanding performance from Dubai’s hospitality sector, which continues to lead the way in setting new benchmarks in safety, inclusivity and connectivity. Government initiatives, strategic international partnerships, a packed events calendar and new attractions, coupled with sustained ability to attract diverse visitor profiles while consistently elevating guests’ experiences, has led to growth in airport passenger traffic, tourist figures, hotel occupancy rates, ADR levels and overall hotel inventory. With 5,000 new rooms on the way this year – and another 6,000 in 2026 and 2027 – Dubai is set to remain and premium, global destination of choice for both leisure and business travellers.”

Key findings from Cavendish Maxwell’s report

• Dubai’s hotel inventory has grown from 670 establishments in 2021 to about 730 in 2025 – an increase of 9.3 per cent.
• The number of hotel keys has risen nearly 11 per cent over the same period, from 137,600 to 152,000.
• Dubai International Airport handled 46 million passengers in H1 2025, a 2.3 per cent increase year-on-year, despite temporary airspace disruption in May and June. Passenger traffic at Dubai World Central rose more than 36 per cent.
• Around 67 per cent of Dubai’s hotel inventory is in the luxury, upper upscale, or upscale categories, with 33 per cent in Upper Midscale, Midscale, or Economy segments.
• In 2025, 84 per cent of new hotels are in premium categories.
• Occupancy rose across all segments, with upscale hotels recording the highest increase at 5.5 per cent.
• ADRs grew across all segments, with Upper Midscale properties leading at 8.5 per cent.
• Of the 9.9 million visitors in H1, Western Europe was the largest source market, accounting for over 21 per cent of arrivals – a 12 per cent increase year-on-year.

Market outlook: Upscale growth and Luxury dominance ahead

Of the 5,000 rooms scheduled for delivery by year-end, 30.4 per cent are in the Upscale category, 29.8 per cent in Upper Upscale, and 24.25 per cent in Luxury. Key projects include the 259-key Mandarin Oriental Downtown, Anantara Seven City at Jumeirah Lakes Towers (78 keys), and Jumeirah Living Business Bay (82 keys). Looking ahead, Luxury will dominate the 2026 pipeline, accounting for 61 per cent of new supply, with major developments such as Ciel Dubai Marina, Dorchester Collection Ela by Omniyat, and InterContinental Portofino.

Midrange categories (Upper Midscale, Midscale, and Economy) will collectively make up 15 per cent of new supply in 2025 and just 7.6 per cent in 2026.

Beyond Dubai: Hospitality growth across the UAE

Hospitality performance was strong across other emirates in H1 2025. Abu Dhabi’s city hotels saw ADRs rise more than 28 per cent, while resorts increased over 21 per cent, supported by demand for luxury, beach, and wellness tourism. Ras Al Khaimah recorded a 7.6 per cent ADR rise and welcomed 653,000 visitors, up 5.7 per cent year-on-year. Fujairah ADRs climbed 6.1 per cent, underpinned by coastal and boutique resort demand.

Occupancy at Abu Dhabi resorts rose 7.5 per cent, while city hotels grew 1.1 per cent, supported by a 13 per cent rise in passenger traffic at Abu Dhabi International Airport, which handled 15.8 million passengers in H1. RAK occupancy increased 1.4 per cent, while Fujairah maintained stable rates, supported by new direct flights and UNWTO-backed adventure tourism initiatives.