Over 10,000 new hotel rooms to come online in Dubai next year
DUBAI, September 26, 2024
More than 2,700 new hotels rooms were delivered in Dubai in the first half of 2024, with a further 10,100 set to come on to the market by the end of 2025, according to new research by leading real estate advisory group and property consultant, Cavendish Maxwell.
Dubai added 12 hotels to its inventory between 1 January and 30 June 2024, bringing the total number of hospitality establishments to 716.
Another 40 hotels are due for delivery between now and the end of next year, with 4,748 additional rooms expected in 2026 and 2027, according to Cavendish Maxwell’s H1 2024 hospitality market performance study.
Hotels in the 4-star category saw the biggest growth compared to 2023, with 436 new rooms delivered in H1 2024 – a 216% increase on the same period last year. There was also a surge in the number of new 5-star hotel rooms opening for businesses: 1,681 came online during H1 this year, up 111% on H1 2023.
Compiled from data by Cavendish Maxwell, AM:PM Hotels, STR, Dubai Tourism and the Department of Economy and released in the run up to the FHS World hospitality industry summit, the report shows that high end accommodation continues to dominate Dubai’s hospitality offering, with 67% of inventory falling in the luxury, upper upscale or upscale classification in June 2024.
Upper midscale and midscale hotels accounted for 27% of inventory between January and June this year, with 5% in the economy category.
More than 75% of new supply delivered between January and June fell in the luxury and upper upscale categories, accounting for 2,054 rooms opening in H1, said the report.
Luxury openings so far this year include The Lana Dubai Dorchester Collection, SIRO One Za’abeel, One & Only Za’abeel, FIVE Lux JBR and the Address Palace Dubai Creek Harbour. More hotels in the luxury segment – including the Ciel Dubai Marina, Viceroy Dubai Business Bay, Port De La Mer hotel and the Marbella and Berlin hotels at the Heart of Europe – are due to open this year.
Occupancy levels surpass pre-Covid levels
Occupancy in Dubai remained stable, reaching 78% in H1 – higher than the pre-Covid levels of 2019 – with the luxury and upper mid-scale segments seeing the highest gains on the same period last year: 2% and 1.6% respectively.
Elsewhere in the UAE, Abu Dhabi City hotels reached 83% occupancy, up from 76% in 2023, and surpassing pre-pandemic levels. Abu Dhabi resorts reached 72%, Fujairah hotels hit 76% and Ras Al Khaimah 72%.
Western Europe was the biggest source market in H1 2024, accounting for 20% of Dubai’s 9.31 million visitors, according to data from the Department of Economy and Cavendish Maxwell.
South Asia was in second place, at 17%, followed by Eastern Europe at 15%. GCC tourists made up 14% of visitors, and Mena 12%.
ADR highest in six years
Dubai’s Average Daily Rates (ADR) in H1 2024 stood at around AED720 – the highest in six years and an increase of 4.6% cent on H1 2023. Upper and upper mid-scale hotels saw the biggest jump in ADR, at 10% and 7% respectively.
ADR in Abu Dhabi was up 11% across the board: AED341 for the capital’s city hotels and AED764. RAK, where ADR hit AED591 also saw an increase of nearly 11%. In Fujairah, ADR was up almost 3% to AED368.
Gergely Balint, the Associate Partner, Commercial Valuation and hospitality real estate expert at Cavendish Maxwell, said: "Dubai’s world-leading, record-breaking hospitality sector continues to flourish, thanks to the emirate’s robust economy, growing investment in infrastructure and increased focus on experience-based tourism."
"A global hub for business, events, tourism and leisure, Dubai welcomed 9.31 million visitors in H1 this year, with Dubai International Airport handling a record 44.9 million passengers in the same period," stated Balint.
According to him, hospitality is firmly established a cornerstone of Dubai’s economic diversification, and, with around 15,000 new rooms set for delivery between now and the end of 2027, shows no sign of slowing down.
"However, with rising construction costs and growing competition, the industry will need to prioritise innovation, sustainability and unique experience to sustain the momentum," stated Balint.
"Adapting to evolving trends, sustaining its unrivalled capacity for diversity and innovation, and leveraging emerging opportunities will further enhance Dubai’s position as a world-leading hospitality destination, and help the city achieve its Dubai Economic Agenda D33 objective of becoming one of the top three global tourism destinations," he added.-TradeArabia News Service
