Two new hotels every month – that’s the rate at which Dubai’s hotel industry seems to be growing this year.
Twelve new hotels opened in Dubai during the first six months of 2024, adding an extra 2,700 rooms to the city’s existing sizeable portfolio. According to a new Cavendish Maxwell report on Dubai’s Hospitality Sector, that’s just the start of the UAE city’s hospitality expansion, with another 40 hotels expected to come on the market by the end of 2025.
As of June 2024, Dubai boasts a total of 716 hospitality establishments, equating to 149,746 room keys. That’s up from 704 hotels at the end of 2023 and 147,041 rooms.
Of the new properties, there was a dramatic increase of 111.4% in 5-star accommodation 1,681 high-end rooms added this year compared to 795 in 2023. Among the new luxury additions to Dubai’s 5-star portfolio include the AED1 billion Marbella Resort Hotel which opened in July, and the Baccarat Hotel in Downtown Dubai where opulence is promised with elegance and modernity.
The 4-star segment experienced a bigger growth in Dubai of 215.9%, with 436 new rooms added compared to 138 last year. In line with the city’s appeal as a luxury destination, the 3-star segment and serviced apartments saw a decline in new additions, with 3-star rooms decreasing by 48.5% and serviced apartments dropping by 43.1%.
“Dubai’s hospitality sector has flourished, demonstrating remarkable growth in recent years. The city’s robust economy, increased infrastructure investment, and focus on experience-based tourism have been key drivers of this success,” said Julian Roche, Cavendish Maxwell’s Chief Economist.
Over the next 18 months, visitors can expect to have access to another 10,100 rooms across the city including IHG’s Ciel, Vignette Collection which will be the world’s tallest all-hotel tower when it opens next year. Construction in Dubai isn’t expected to slow down anytime soon, and by the end of 2027, the city is expected to have around 776 hotels in its portfolio with 164,609 room keys.
The rate at which Dubai’s hospitality industry is growing is on par with the city’s overall tourism growth which reached a record-breaking 9.3 million arrivals in the first half of this year. That was a 9% increase from 8.55 million during the same six months in 2023.
Luxury and upper-midscale accommodation has proven to be the more popular choice amongst visitors to Dubai during the first half of this year, with a 2% and 1.6% increase in occupancy levels.
“As a global hub for business, events, and leisure, Dubai continues to attract visitors from around the world,” added Mr Roche. “However, the sector faces challenges such as rising costs and growing competition. To sustain its momentum, Dubai will prioritise innovation, unique experiences, and sustainability.”
“While the city’s hospitality sector has become a cornerstone of its economic diversification, there’s even more potential to unlock. By adapting to evolving trends, maintaining its reputation for unrivalled capacity for diversity and innovation, and leveraging emerging opportunities, Dubai can further advance its position as a world-leading hospitality destination.”
