Dubai's Hotel Sector to Expand by Over 11,300 Rooms by 2027

Dubai's hospitality industry is set for significant growth, with plans to add more than 11,300 hotel rooms by 2027. This expansion includes approximately 4,620 rooms scheduled to open this year, as reported by real estate advisory firm Cavendish Maxwell. By the end of 2027, Dubai aims to have over 162,600 rooms across 769 hotels, reflecting the city's commitment to strengthening its position as a global tourism hub.

In 2024, Dubai added 4,255 rooms across 19 hotels, marking a year-on-year growth of nearly 3%. As of December 2024, the city boasted 724 hospitality establishments with a total of 151,245 keys. The projected growth indicates a 3.1% increase in hotel inventory this year, with a further 3.4% growth anticipated for 2026.

High-end accommodations continue to dominate Dubai's hotel offerings. In 2024, almost 70% of room supply fell into the high-end categories, including Luxury, Upper Upscale, and Upscale segments. This trend is expected to persist, with nearly 70% of the upcoming supply for 2025 categorized under Luxury and Upper Upscale segments. This focus underscores Dubai's dedication to providing premium experiences for its visitors.

The tourism sector's robust performance has been a driving force behind this expansion. In 2024, Dubai welcomed 18.72 million overnight visitors, a 9.1% increase from the previous year. This surge contributed AED 236 billion to the UAE's economy, accounting for 12% of the nation's GDP. Such figures highlight the sector's significant impact and its vital role in the country's economic growth.

Hotel occupancy levels have remained steady, rising to 78% in 2024, up 1% from 2023. The Luxury and Upper Mid-scale segments saw the most substantial gains, with increases of 3% and 2.4%, respectively. Average Daily Rates reached AED 690, indicating pricing stability in Dubai's hospitality market. While the Upscale and Upper Mid-scale categories experienced ADR growth of 0.7% and 0.4%, respectively, the Upper Upscale and Luxury segments saw slight declines of 1.7% and 1.9%, respectively. This suggests that increased demand in the Luxury segment came at the expense of pricing.

The expansion of Dubai's hotel sector is also expected to generate significant employment opportunities. The addition of over 11,300 new rooms by 2027 is projected to create approximately 15,000 direct jobs in the hospitality industry. This surge in employment underscores the profound impact of tourism on Dubai's economy, offering numerous opportunities for residents and newcomers alike.

Dubai's international recognition further bolsters investor confidence. At the 31st Annual World Travel Awards in late 2024, Dubai was named the world's leading shopping and exhibition destination. Additionally, Mina Rashid secured the title of the world's leading cruise port, and Dubai International Airport was recognized as the world's leading airport. Such accolades reinforce Dubai's status as a premier hub for tourism, hospitality, business, and leisure.