MAYS IBRAHIM (ABU DHABI)
The UAE’s hospitality sector continues to show resilience despite near-term headwinds, supported by government relief measures, a diversified visitor base and sustained investment in tourism infrastructure, according to property consultancy, JLL.
Its latest Hotels Market Dynamics report shows that Abu Dhabi’s hospitality sector in particular continued to benefit from relatively steady demand.
The capital posted a 65.2% occupancy rate in June – comfortably ahead of every other emirate – with RevPAR declining only a moderate 12.1%, underpinned by steady domestic and government-linked demand.
JLL said traditional summer seasonality and sustained regional tensions had weighed on international arrivals, but government measures helped cushion the impact on the hospitality industry.
“Diversified demand bases across international, regional and domestic segments, alongside continued destination investment, position the sector for sustained recovery once traveller confidence gradually normalises,” the report said.
In Dubai, a Dh2.5 billion relief package introduced in two phases included exemptions on the Tourism Dirham, hotel fees and restaurant fees, helping to ease cost pressures and preserve liquidity across hospitality and related tourism businesses.
Hotel operators have also responded by targeting domestic and GCC demand through discounted room rates, staycation packages and family and leisure offers.
Some properties introduced additional incentives, including dining credits, spa access and extended-stay packages, to support occupancy and revenue.
Temporary hotel closures for renovations have remained another cost-management strategy, with some properties bringing forward refurbishment plans to take advantage of lower tourism levels and improve their offering ahead of a recovery in demand.
Abu Dhabi’s hotel supply stood at 33,650 rooms in the second quarter, with around 120 rooms expected to be delivered by the end of the year. Dubai had 159,300 rooms, with approximately 4,900 rooms expected to be completed.
JLL said operators and developers had adopted a more measured approach to new development, adjusting project timelines, upgrading existing properties and waiting for demand to recover before launching new hotels.
The approach reflects near-term caution over project execution rather than weakening investor confidence in the UAE’s long-term tourism fundamentals.
As market conditions stabilise, the sector is positioned for a steady return towards pre-disruption performance levels.
Looking ahead, JLL’s outlook is constructive: as regional tensions ease and air connectivity is restored, the combination of government fiscal support, a resilient development pipeline and pent-up international demand are expected to drive a steady return to pre-disruption performance across the UAE’s key hospitality markets.