Dubai’s hotel industry is gearing up for substantial growth, with an estimated 154,000 rooms projected to be operational by the end of 2023. This marks an impressive 6.4% surge from the previous year, according to a report by global property consultancy, Knight Frank.
Faisal Durrani, Partner and Head of Research at Knight Frank, Mena, highlighted that Dubai has not only secured its position as the world’s preferred destination for two consecutive years according to Trip Advisor but has also achieved the highest global occupancy rates in the first half of 2023, reaching 78%.
Industry leaders are spearheading this expansion, with Accor leading the way. The group currently offers 71,820 rooms, with an additional 49,510 in the pipeline slated for delivery by 2030. Following closely are Marriott International 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.
Dubai continues to dominate the UAE’s hospitality landscape, accounting for 70% of the country’s upcoming supply concentrated in the city. Turab Saleem, Partner and Head of Hospitality, Tourism, and Leisure Advisory at Knight Frank, emphasized that Dubai’s appeal remains unwavering, evident in the 20% surge of tourists in H1 2023 compared to the previous year. Internationally branded hotels make up 67% of Dubai’s existing supply, underlining the city’s global allure. Moreover, 70% of the under-construction and planned supply in Dubai caters to discerning travelers, falling within the luxury and upper upscale hotel segments.
Data from STR, cited by Knight Frank, indicates that the overall Dubai market experienced a 0.8% rise in Revenue per Available Room (RevPAR) in comparison to July 2022. This growth was propelled by a notable 6.8% surge in occupancy, although it was slightly hindered by a 5.6% decrease in Average Daily Rate (ADR). Hotstats data for July 2023 further revealed that most segments observed minor ADR declines, except for luxury city center hotels around Downtown, Business Bay, and SZR, which recorded a 2.0% increase. Luxury beach resorts showed a similar uptick in occupancy, but with a more substantial ADR decrease of 13%.
