Dubai to add over 11,300 new hotel rooms by 2027

More than 11,300 new hotel rooms are set to open across Dubai by 2027, with almost 4,620 coming to the market this year, according to Cavendish Maxwell.

Dubai added 4,255 rooms across 19 hotels to its inventory in 2024, representing year-on-year growth of almost 3 per cent.

As of December, the city boasted 724 hospitality establishments, with 151,245 keys between them, according to Cavendish Maxwell’s Dubai hospitality sector 2024 market performance report.

Dubai hotel openings

Hotel inventory will grow by 3.1 per cent this year, with 3.4 per cent growth predicted for 2026.

By the end of 2027, Dubai is set to have more than 162,600 rooms across 769 hotels.

High end accommodation continues to dominate Dubai’s hotel offering. In 2024, almost 70 per cent of room supply fell in the high end (Luxury, Upper Upscale and Upscale) category.

Of the upcoming supply for 2025, nearly 70 per cent will be in the Luxury and Upper Upscale segment, the research shows.

Gergely Balint, Associate Partner, Commercial Valuation and Hospitality expert at Cavendish Maxwell, said: “Dubai’s world-leading hospitality and tourism sectors set more records and reached new milestones in 2024, with 18.72m overnight visitors, adding a string of prestigious new tourism-industry awards to its name and 4,255 new hotel rooms coming to the market.

“We can look forward to continued strong performance in 2025, with another 20 hotels and resorts due to open, further highlighting Dubai’s position as a world-leading hub for tourism, hospitality, business and leisure.”

The number of overnight visitors to Dubai grew 9.1 per cent last year, up from 17.15m in 2023. The emirate’s hospitality and tourism momentum was further underpinned by its outstanding performance at the 31st Annual World Travel Awards in late 2024, where Dubai was named the world’s leading shopping and exhibition destination, Mina Rashid took the title of world’s leading cruise port and Dubai International Airport was recognised as the world’s leading airport.

Gergely Balint said: “This continued international recognition strengthens investor confidence and further cements Dubai’s status as a premier hub for hospitality and real estate development. The emirate continued to experience robust growth in the tourism sector, surpassing pre-pandemic levels and positively contributing to economic growth.

“In 2024, tourism contributed AED236bn ($64.3bn), up from AED220bn ($60bn) in 2023, to the UAE’s economy, representing 12 per cent of the nation’s GDP. This growth highlights the sector’s significant impact, reinforcing its vital role in the country’s economic expansion.”

Dubai’s hotel occupancy levels remained steady, rising to 78 per cent in 2024, an increase of 1 per cent on 2023, with the Luxury and Upper Mid-scale segments seeing the biggest gains of 3 per cent and 2.4 per cent respectively.

Average daily rates (ADR) in Dubai reached AED690 ($188), a slight increase of 0.2 per cent on 2023, indicating pricing stability in Dubai’s hospitality market.

Upscale and Upper Mid-scale categories saw ADR growth of 0.7 per cent and 0.4 per cent respectively, while there was a decline of 1.7 per cent among Upper Upscale hotels.

Those in the Luxury segment witnessed a drop of 1.9 per cent in ADR year-on-year, despite a 3 per cent increase in occupancy, suggesting that increased demand came at the expense of pricing.

Average Revenue Per Available Room (RevPAR) rose by 1.3 per cent in 2024 compared to 2023, primarily driven by higher occupancy levels. While all segments saw growth, the Upper Midscale category led at around 1.9 per cent.

Dubai welcomed a record-breaking 18.7m visitors in 2024, with Western Europe the biggest source market, at 20 per cent (3.7 million). 

South Asians accounted for 17 per cent; GCC tourists 15 per cent and Eastern Europeans 14 per cent.

Northeast and Southeast Asia saw the biggest year on-year growth, up almost a quarter on the previous year, driven largely by the resurgence of outbound tourism from China.

Dubai International Airport (DXB) set a new benchmark in global aviation, welcoming 92.3m passengers in 2024 – its highest annual traffic on record and a 6.2 per cent jump on 2023.

December was the busiest month, with 8.2 million people passing through DXB.

Outside of Dubai, there was a surge in rate-driven hotel performance across the UAE. All Emirates secured an increase in ADR, with Abu Dhabi city hotels and resorts leading the growth at 14.5 per cent and 14.4 per cent, respectively.

Ras Al Khaimah recorded a 14 per cent year-on-year ADR increase, potentially driven by the completion of renovation of the Waldorf Astoria, which impacted market performance the previous year.

ADR was up 4 per cent in Fujairah.

The strongest occupancy growth was at Abu Dhabi city hotels (up 10.5 per cent), due to increased demand from corporate travel, the Meetings, Incentives, Conferences and Events (MICE) sector, major events and government-backed tourism initiatives.

There was a slight drop in occupancy in Ras Al Khaimah, where new openings such as the Anantara Mina Al Arab Resort and the Sofitel Al Hamra Beach Resort brought more rooms to the overall offering.

RAK achieved a record 1.28m visitors last year, up nearly 5 per cent year-on-year. The upcoming Wynn Al Marjan Island resort, set to open in 2027 with the Gulf’s first gaming resort, has spurred significant hotel development in the area and is expected to boost RAK tourism in the long term.

In Fujairah, where occupancy remained stable, the Government has introduced several initiatives to boost tourism, including the promotion of key archaeological sites such as Al Bidya Mosque, to help attract its target 500,000 visitors per year.

This article is originally published in Arabian Business.