Dubai hotel occupancy climbs to more than 81pc: research

Hotel occupancy levels across Dubai reached more than 81 per cent - up 4.5 per cent year-on-year- with the number of international visitors climbing 6.1 per cent to almost 10 million between January and June 2025, according to new research and insight from leading real estate advisory group, Cavendish Maxwell.

 

Cavendish Maxwell’s H1 2025 Dubai hospitality sector market performance analysis also reports that the average daily rate (ADR) across Dubai’s hotels and resorts topped AED745, up 5.5 per cent on the same period last year.

 

With Dubai’s peak tourism season fast approaching, the Emirate is gearing up to open 19 new establishments – with more than 5,000 rooms between them – by the end of 2025, bringing Dubai’s total inventory to 157,144 keys across 748 hotels. Almost 900 rooms, across 5 hotels were delivered in H1 this year.

 

Vidhi Shah, Director, Head of Commercial Valuation at Cavendish Maxwell, said: “The first half of this year has seen yet another outstanding performance from Dubai’s hospitality sector, which continues to lead the way in setting new benchmarks in safety, inclusivity and connectivity. Government initiatives, strategic international partnerships, a packed events calendar and new attractions, coupled with sustained ability to attract diverse visitor profiles while consistently elevating guests’ experiences, has led to growth in airport passenger traffic, tourist figures, hotel occupancy rates, ADR levels and overall hotel inventory. With 5,000 new rooms on the way this year – and another 6,000 in 2026 and 2027 – Dubai is set to remain and premium, global destination of choice for both leisure and business travellers.”

 

CAVENDISH MAXWELL’S HOSPITALITY SECTOR REPORT ALSO SHOWS:

 

Dubai’s hotel inventory has steadily risen from 670 establishments in 2021 to around 730 today – an increase of 9.3 per cent

 

In the same period, the number of keys has grown more nearly 11 per cent, from 137,600 to 152,000

 

Despite temporary airspace disruption in May and June, Dubai International airport handled 46 million passengers in H1 this year – a 2.3 per cent increase year-on-year. At Dubai World Central, passenger traffic rose more than 36 per cent

 

More than two thirds (67 per cent) of Dubai’s current hotel inventory falls in the Luxury, Upper Upscale or Upscale categories, with the remaining 33 per cent in the Upper Midscale, Midscale or Economy segments

 

84 per cent of upcoming hotels in 2025 are in the premium categories (Luxury, Upper Upscale and Upscale)

 

Occupancy rose across all segments in H1, with Upscale hotels seeing the biggest increase of 5.5 per cent

 

ADRs climbed across all categories, with the biggest jump of 8.5 per cent in Upper Midscale establishments

 

Of the 9.9 million international visitors in H1, Western Europe was the biggest source market, accounting for more than 1 in 5 tourists – a 12 per cent hike on last year

 

UPSCALE HAS THE UPPER HAND, LUXURY SET TO LEAD THE WAY

 

Of the 5,000 rooms set for delivery in the next six months, 30.4 per cent are in the Upscale segment, 29.8 per cent in the Upper Upscale and 24.25 per cent are classed as Luxury. Prominent projects include the 259-key Mandarin Oriental Downtown, Anantara Seven City at Jumeirah Lakes Towers (78 keys) Jumeirah Living Business Bay, with 82 keys.

 

In 2026, the pipeline shows a marked shift towards the Luxury sector, which is set to represent 61 per cent of new supply. Examples include Ciel Dubai Marina, Dorchester Collection Ela by Omniyat and InterContinental Portofino.

 

Midrange, affordable categories (Upper Midscale, Midscale and Economy), collectively account for 15 per cent of new rooms between July and December this year, and only 7.6 per cent in 2026.

 

OCCUPANCY RATES

 

While Dubai’s occupancy rates climbed across all segments in H1, rates of growth varied from category or category.

 

 Across the board, occupancy hit more than 81 per cent, 4.5 per cent up on last year. Upscale hotels saw the biggest rise of 5.5 per cent followed by Upper Upscale at 5.2 per cent and Luxury at 4.5 per cent.

 

Upper-Midscale properties, despite maintaining the highest occupancy, saw a more modest gain of 3.43 per cent.

 

The increases are the result of a surge in international visitors and strong domestic staycation demand, said Cavendish Maxwell. The full-year forecast for occupancy in 2025 is 78.5 per cent.

 

AVERAGE DAILY RATE (ADR)

 

ADRs climbed 5.5 per cent to reach AED745 in H1 Upper Midscale hotels seeing strongest increase, at 8.5 per cent growth. Luxury establishments saw a rise of 4.9 per cent, supported by high-spending leisure and business visitors. Upscale and Upper Upscale hotels posted more modest gains of 2.7 per cent and 2.5 per cent respectively.

 

WHERE ARE DUBAI’S VISITORS COMING FROM?

 

Western Europe remained the biggest source market for Dubai tourism in H1 this year, accounting for over 21 per cent of visitors – a 12 per cent increase on the same time last year. Visitors from the CIS and Eastern Europe accounted for 15.4 per cent (up nearly 11 per cent) and the GCC 15.3 per cent (up 19 per cent).

 

While accounting for less than 2 per cent of overall visitors, the number of tourists from Australasia saw a notable jump of more than 14 per cent. Similarly, at 7 per cent of total tourists, the number of visitors from The Americas climbed almost 12 per cent.

 

BEYOND DUBAI: WHAT’S HAPPENING ACROSS THE REST OF THE UAE?

 

Outside of Dubai, all emirates secured an increase in ADR in H1 2025. Abu Dhabi’s city hotels saw the biggest increase, of more 28 per cent, followed by Abu Dhabi resorts at over 21 per cent, supported by luxury experiences, beach tourism and wellness retreat that appeal to domestic and international visitors. In Ras Al Khaimah, ADR climbed 7.6 per cent, thanks to an increase in adventure tourism, the appeal of mountain resorts and nature-based experiences, while Fujairah posted a 6.1 per cent increase, fuelled by the attraction of coastal getaways and boutique resorts.

 

Occupancy rates at Abu Dhabi resorts grew strongly, with a 7.5 per cent rise, while Abu Dhabi city hotels saw 1.1 per cent growth. The improvements were supported by a 13 per cent rise in passenger traffic at Abu Dhabi International Airport, which welcomed 15.8 million people between January and June. Enhanced air connectivity, combined with steady demand from corporate travel, the MICE sector and government-backed initiatives, further supported Abu Dhabi’s hospitality sector growth.

 

Meanwhile at the other end of the country at Ras Al Khaimah, which received 653,000 visitors in H1 (up 5.7 per cent on H1 last year), occupancy rates rose 1.4 per cent. Occupancy rates remained stable at Fujairah, thanks to initiatives including a United Nations World Tourism Organisation (UNWTO)-backed event highlighting the area’s adventure tourism and natural landscapes, coupled with new daily direct flights from Mumbai. -TradeArabia News Service