Dubai’s hospitality sector is experiencing unprecedented growth, reinforcing its status as a global tourism and investment hub. By the end of 2027, the emirate will boast over 162.600 hotel rooms with more than 11,300 new keys set to be added to the market.
This expansion underscores Dubai’s commitment to strengthening its world-class hospitality infrastructure and maintaining its appeal to international travelers and investors alike.
A Growing Hotel Inventory
Dubai’s hospitality sector experienced notable growth in 2024 with the addition of 4,255 rooms across 19 hotels marking a 3% year-on-year increase. As a result the city’s total hospitality inventory has expanded to 151, 245 keys across 724 establishments.
This upward trend is set to continue in 2025, with an estimated 4,620 new rooms expected to enter the market, driving a 3.1% increase in hotel supply. By 2026 projections indicate a further rise of 3.4%, reinforcing Dubai’s position as a leading global destination for tourism and business.
The Dominance of Luxury Accommodation
Dubai’s hospitality landscape remains firmly positioned at the high end, with nearly 70% of current room supply classified under Luxury, Upper Upscale, and Upscale categories. This trend is set to continue in 2025, with most of the upcoming supply concentrated in the Luxury and Upper Upscale segments.
The city’s unwavering focus on premium accommodation aligns with its strategy to attract high-net-worth individuals, business travelers and leisure tourists seeking world-class experiences.
Record-Breaking Tourism Growth
Dubai’s tourism sector has reached new heights, welcoming 18.72 million overnight visitors in 2024, a 9.1% increase from 2023. The emirate’s international recognition at the 31st Annual World Travel Awards further solidified its global appeal, securing accolades such as the world’s leading shopping and exhibition destination and home to the world’s leading cruise port at Mina Rashid.
Additionally, Dubai International Airport recorded its highest-ever passenger traffic in 2024, with 92.3 million travelers passing through an impressive 6.2% increase from the previous year.
Western Europe emerged as Dubai’s largest source market, accounting for 20% (3.7 million) of total visitors, followed by South Asia at 17%, GCC tourists at 15%, and Eastern Europe at 14%. Notably, Northeast and Southeast Asia witnessed the highest year-on-year growth, driven primarily by China’s resurgence as a major outbound travel market.
Economic Contribution and Hospitality Performance
Tourism played a significant role in Dubai’s economic expansion, contributing AED 236 billion ($64.3 billion) to the UAE’s economy in 2024, up from AED 220 billion ($60 billion) in 2023. This sector now accounts for 12% of the nation’s GDP, highlighting its importance in the broader economic landscape.
Dubai’s hotel occupancy levels remained robust, rising to 78% in 2024 a 1% increase from the previous year. The Luxury and Upper Midscale segments saw the most significant occupancy gains at 3% and 2.4%, respectively. Despite stable pricing, average daily rates saw marginal shifts, with an overall increase of 0.2% to AED 690 ($188).
The Upper Midscale and Upscale segments experienced slight ADR growth of 0.7% and 0.4%, while the Luxury segment witnessed a 1.9% decline, suggesting increased demand at the expense of pricing. Revenue per available room grew by 1.3%, largely driven by higher occupancy rates.
Future Outlook
Dubai’s hospitality and tourism industries are set for continued growth, with strong investor confidence and strategic government initiatives fueling expansion. The city’s commitment to maintaining its position as a world-leading hub for business and leisure is evident in its ambitious development pipeline, record-breaking visitor numbers, and consistent economic contributions.
One Investments is dedicated to supporting initiatives that contribute to Dubai’s growth as a premier global destination. With a strategic emphasis on high-yield investments and long-term capital appreciation, the firm applies its expertise to identify and secure the most promising opportunities in the market.
To explore investment opportunities in Dubai’s dynamic real estate landscape, contact us today.
