Today's Edition
KHALED AL KHAWALDEH (ABU DHABI)
Abu Dhabi and Dubai are set to witness a major expansion in their hospitality sectors, with thousands of new hotel rooms expected to be added in 2025. Both emirates are investing heavily in tourism as part of broader economic diversification strategies.
The UAE capital's hotel market is poised to grow beyond 50,000 rooms by 2030, according to a previous announcement of Saud Al Housani, Undersecretary of the Abu Dhabi Department of Culture and Tourism.
The emirate is projected to see more than 2,300 new hotel rooms by the end of the year, bringing the total past the 36,000 mark, Al Housani said earlier.
In Dubai, more than 11,300 hotel rooms will be added by 2027, with nearly 4,620 slated to open in 2025 alone, according to real estate advisory firm Cavendish Maxwell.
Highest Growth in the UAE
Abu Dhabi is the fastest-growing hospitality market in the country in terms of occupancy and average daily rates (ADR), based on the Cavendish Maxwell report.
ADRs in Abu Dhabi city hotels and resorts topped UAE growth rates at 14.5% and 14.4%, respectively. Occupancy rates were up 10.5%, marking the highest growth seen across the country.
"In 2024, tourism contributed Dh236 billion - up from Dh220 billion in 2023 - to the UAE's economy, representing 12% of the nation's GDP. This growth highlights the sector's significant impact, reinforcing its vital role in the country's economic expansion," said Gergely Balint, Associate Partner and Commercial Valuation and Hospitality expert at Cavendish Maxwell.
Luxury Dominates the Sector
These growth forecasts come on the heels of a record-breaking 2024 for both Abu Dhabi and Dubai.
Abu Dhabi hotels welcomed nearly 4.3 million guests in the first nine months of 2024 while Dubai saw 18.72 million overnight visitors and 78% hotel occupancy rates.
Cavendish Maxwell found that luxury accommodations continue to dominate the sector, especially in Dubai's hotel market, with 70% of its existing inventory classified under the "luxury, upper upscale, and upscale" categories. This trend is expected to continue in 2025, with nearly 70% of new rooms falling within the "luxury and upper upscale" segments, the firm added.
Elsewhere in the UAE, Ras Al Khaimah recorded a 14% ADR increase, benefitting from renovations and upcoming projects like the Wynn Al Marjan Island resort, according to Cavendish Maxwell. Fujairah, aiming to attract 500,000 annual visitors, is investing in its cultural heritage to boost tourism.
