Sat, Nov 16, 2024 | Jumada al-Awwal 14, 1446 | DXB ktweather icon0°C

Dubai delivered over 2,700 new hotel rooms in H1 2024

Hospitality sector market report shows occupancy and ADR highest in six years

Published: Thu 26 Sep 2024, 5:46 PM

Updated: Thu 26 Sep 2024, 6:57 PM

Top Stories

Tourists pose outside The Atlantis hotel in Dubai. Occupancy in Dubai remained stable, reaching 78 per cent in H1 – higher than the pre-Covid levels of 2019. — File photo

Tourists pose outside The Atlantis hotel in Dubai. Occupancy in Dubai remained stable, reaching 78 per cent in H1 – higher than the pre-Covid levels of 2019. — File photo

More than 2,700 new hotels rooms were delivered in Dubai in the first half of 2024, with a further 10,100 set to come on to the market by the end of 2025, according to new research by leading real estate advisory group and property consultant, Cavendish Maxwell.

Dubai added 12 hotels to its inventory between 1 January and 30 June 2024, bringing the total number of hospitality establishments to 716, with almost 149,750 rooms between them. Another 40 hotels are due for delivery between now and the end of next year, with 4,748 additional rooms expected in 2026 and 2027, according to Cavendish Maxwell’s H1 2024 hospitality market performance study.

Hotels in the four-star category saw the biggest growth compared to 2023, with 436 new rooms delivered in H1 2024 – a 216 per cent increase on the same period last year. There was also a surge in the number of new 5-star hotel rooms opening for businesses: 1,681 came online during H1 this year, up 111 per cent on H1 2023.

Compiled from data from Cavendish Maxwell, AM:PM Hotels, STR, Dubai Tourism and the Department of Economy, the report shows that high end accommodation continues to dominate Dubai’s hospitality offering, with 67 per cent of inventory falling in the luxury, upper upscale or upscale classification in June 2024. Upper midscale and midscale hotels accounted for 27 per cent of inventory between January and June this year, with 5 per cent in the economy category.

More than 75 per cent of new supply delivered between January and June fell in the luxury and upper upscale categories, accounting for 2,054 rooms opening in H1. Luxury openings so far this year include The Lana Dubai Dorchester Collection, SIRO One Za’abeel, One & Only Za’abeel, FIVE Lux JBR and the Address Palace Dubai Creek Harbour. More hotels in the luxury segment – including the Ciel Dubai Marina, Viceroy Dubai Business Bay, Port De La Mer hotel and the Marbella and Berlin hotels at the Heart of Europe – are due to open this year.

Occupancy levels surpass pre-Covid levels

Occupancy in Dubai remained stable, reaching 78 per cent in H1 – higher than the pre-Covid levels of 2019 – with the luxury and upper mid-scale segments seeing the highest gains on the same period last year: two per cent and 1.6 per cent respectively. Elsewhere in the UAE, Abu Dhabi City hotels reached 83 per cent occupancy, up from 76 per cent in 2023, and surpassing pre-pandemic levels. Abu Dhabi resorts reached 72 per cent, Fujairah hotels hit 76 per cent and Ras Al Khaimah 72 per cent.

Average Daily Rate (ADR) highest in six years

Dubai’s average daily rates (ADR) in H1 2024 stood at around Dh720 – the highest in six years and an increase of 4.6 per cent on H1 2023. Upper and upper mid-scale hotels saw the biggest jump in ADR, at 10 per cent and 7 per cent respectively. ADR in Abu Dhabi was up 11 per cent across the board: Dh341 for the capital’s city hotels and Dh764. RAK, where ADR hit Dh591 also saw an increase of nearly 11 per cent. In Fujairah, ADR was up almost 3 per cent to Dh368.

Dubai visitors: source markets

Western Europe was the biggest source market in H1 2024, accounting for 20 per cent of Dubai’s 9.31 million visitors. South Asia was in second place, at 17 per cent, followed by Eastern Europe at 15 per cent. GCC tourists made up 14 per cent of visitors, and Mena 12 per cent, according to data from the Department of Economy and Cavendish Maxwell.

Gergely Balint, associate partner, commercial valuation and hospitality real estate expert at Cavendish Maxwell, said: “Dubai’s world-leading, record-breaking hospitality sector continues to flourish, thanks to the emirate’s robust economy, growing investment in infrastructure and increased focus on experience-based tourism. A global hub for business, events, tourism and leisure, Dubai welcomed 9.31 million visitors in H1 this year, with Dubai International Airport handling a record 44.9 million passengers in the same period.

“Hospitality is firmly established a cornerstone of Dubai’s economic diversification, and, with around 15,000 new rooms set for delivery between now and the end of 2027, shows no sign of slowing down. However, with rising construction costs and growing competition, the industry will need to prioritise innovation, sustainability and unique experience to sustain the momentum. Adapting to evolving trends, sustaining its unrivalled capacity for diversity and innovation, and leveraging emerging opportunities will further enhance Dubai’s position as a world-leading hospitality destination, and help the city achieve its Dubai Economic Agenda D33 objective of becoming one of the top three global tourism destinations.”



Next Story