The average daily rate (ADR) across Dubai’s hotels and resorts topped AED745, representing a 5.5 per cent increase on the same period last year, the H1 2025 Dubai hospitality sector market performance analysis revealed.
Dubai prepares to open 19 new establishments with more than 5,000 rooms between them by the end of 2025, bringing the emirate’s total inventory to 157,144 keys across 748 hotels. Almost 900 rooms across 5 hotels were delivered in H1 this year.
5,000 new hotel rooms to open in Dubai H2 2025 as tourism numbers surge
“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,” Vidhi Shah, Director, Head of Commercial Valuation at Cavendish Maxwell said.
Dubai’s hotel inventory has risen from 670 establishments in 2021 to around 730 today, representing a 9.3 per cent increase. During the same period, the number of keys has grown 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. Of upcoming hotels in 2025, 84 per cent are in the premium categories.
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 increase on last year.
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.
Projects include the 259-key Mandarin Oriental Downtown, Anantara Seven City at Jumeirah Lakes Towers (78 keys) and Jumeirah Living Business Bay, with 82 keys.
In 2026, the pipeline shows a 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.
Categories including 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 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 gain of 3.43 per cent.
The increases result from a surge in international visitors and domestic staycation demand, according to Cavendish Maxwell. The full-year forecast for occupancy in 2025 is 78.5 per cent.
ADRs climbed 5.5 per cent to reach AED745 in H1, with Upper Midscale hotels seeing the 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 gains of 2.7 per cent and 2.5 per cent respectively.
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).
Whilst accounting for less than 2 per cent of visitors, the number of tourists from Australasia saw a jump of more than 14 per cent. At 7 per cent of total tourists, the number of visitors from The Americas climbed almost 12 per cent.
Outside of Dubai, all emirates secured an increase in ADR in H1 2025. Abu Dhabi’s city hotels saw the biggest increase of more than 28 per cent, followed by Abu Dhabi resorts at over 21 per cent, supported by luxury experiences, beach tourism and wellness retreats 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, whilst 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 with a 7.5 per cent rise, whilst 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. Air connectivity, combined with demand from corporate travel, the MICE sector and government-backed initiatives, further supported Abu Dhabi’s hospitality sector growth.
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 flights from Mumbai.
