Dubai's hotel sector hits capacity milestone with 150,000+ rooms

07 November 2023 3 min. read

Dubai’s hotel market is set to break a major capacity milestone by the end of this year according to Knight Frank, with the number of hotel rooms to surpass the 150,000 mark.

Total hotel room capacity in Dubai is expect to reach 154,000 by late December, a 6.4% increase from 2022. Notably, 2023 hotel room capacity will be over 30,000 higher to the pre-pandemic level, following a surge in Dubai’s popularity as a holiday and business destination.

In the first half of 2023, Dubai welcomed 8.6 million tourists, marking a significant 20% increase from 2022. “This surge underscores Dubai's enduring appeal as a global tourist hotspot,” said Turab Saleem, a partner at Knight Frank, a global real estate consulting firm.

Dubai's hotel sector hits capacity milestone with 150,000+ rooms

Tourism in Dubai – like tourism in much of the rest of the world – is well on the way back to normalcy from a significant decrease during the Covid-19 pandemic.

“Dubai has not only emerged not only as the world’s most popular destination for two years running according to Tripadvisor, but the emirate has also earned the accolade of having the world’s highest occupancy levels during the first half of 2023 at 78%,” said Faisal Durrani, partner at Knight Frank.

Durrani’s statement echoes recent research from Deloitte, which placed the Dubai hotel market among the best performing markets in the world, with luxury tourism options being a major draw for international tourists from around the world.

Dubai's hotel sector hits capacity milestone with 150,000+ rooms

Internationally branded hotels constitute two thirds of Dubai's existing supply, with Accor the largest player with 71,820 existing rooms and a further 49,510 more in the pipeline expected for completion by 2030.

Following closely are Marriott, with 63,790 existing rooms and 52,790 planned; IHG Hotels & Resorts, with 35,140 current rooms and 22,120 in development; Hilton Worldwide, with 33,450 rooms and 39,860 upcoming; Radisson Hotels, offering 22,830 rooms and planning an additional 11,651; and Rotana Hotels, with 16,976 rooms and 10,807 in development.

Notably, most of the new rooms will be five star luxury or upper upscale rooms. Saleem: “A substantial 70% of the under-construction and final planning supply in Dubai belongs to the luxury and upper upscale hotel segments, catering to discerning travellers.”

Dubai's hotel sector hits capacity milestone with 150,000+ rooms

Dubai continues to dominate the broader UAE hotel landscape, with over 7 in 10 of the total number of hotel rooms (207,200) based in Dubai. Continuing that trend, a similar share of the upcoming supply will be concentrated around Dubai.

National Tourism Strategy 2031

In its ‘We The UAE 2031’ national strategy, the government set the goal to attract 25 million tourists in 2025, and 40 million by 2031. During this period, the tourism sector’s contribution to the GDP is planned to increase annually by AED 27 billion to hit AED 450 billion by 2031.

The National Tourism Strategy 2031 includes 25 initiatives and policies to support the development of the UAE’s tourism sector, with the delivery led by the Ministry of Economy in cooperation with various local and federal entities and institutions, the UAE’s airlines, and the World Tourism Organization, among others.