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Dubai hotel rooms to hit 154,000 in 2023

Knight Frank report shows UAE has 24,500 rooms in various stages of development

Dubai’s vibrant hospitality sector, which has recorded a remarkable surge in international tourist traffic in the first half, is getting a major fillip with the addition of more hotel rooms this year, a London-based global property consultancy said.

By the end of 2023, approximately 154,000 rooms will be operating in Dubai’s hospitality sector, marking a substantial 6.4 per cent increase from 2022, according to a report by Knight Frank.

The boom in the hospitality sector is visible across the UAE with the addition of 9,200 rooms this year. With an existing supply of 207,200 hotel rooms, the UAE has an additional 24,500 rooms in various stages of development, further solidifying its global leadership in the hospitality sector, the consultancy said in a report.

“The UAE’s hotel inventory continues to expand, helping to support cities such as Dubai, which has emerged not only as the world’s most popular destination for two years running according to Trip Advisor, but the emirate has also earned the accolade of having the world’s highest occupancy levels during the first half of 2023 at 78 per cent,” said Faisal Durrani, partner – head of research, Mena at Knight Frank.

Durrani said industry giants are driving this growth, with Accor securing the top spot. It offers 71,820 existing rooms and has 49,510 more in the pipeline that are expected to be delivered by 2030. Following closely are Marriott International, with 63,790 existing rooms and 52,790 planned; IHG Hotels & Resorts, with 35,140 current rooms and 22,120 in development; Hilton Worldwide, with 33,450 rooms and 39,860 upcoming; Radisson Hotels, offering 22,830 rooms and planning an additional 11,651; and Rotana Hotels, with 16,976 rooms and 10,807 in development.

Turab Saleem, partner, head of Hospitality, Tourism and Leisure Advisory at Knight Frank, said Dubai continues to dominate the UAE’s hospitality landscape with 70 per cent of the country’s upcoming supply concentrated in the city. “In H1 2023, Dubai welcomed 8.6 million tourists, marking a significant 20 per cent increase from 2022. This surge underscores Dubai’s enduring appeal as a global tourist hotspot. Internationally branded hotels constitute 67 per cent of Dubai’s existing supply, highlighting the city’s global appeal. A substantial 70 per cent of the under-construction and final planning supply in Dubai belongs to the luxury and upper upscale hotel segments, catering to discerning travellers.”

STR data cited by Knight Frank shows that the Dubai market as a whole recorded a 0.8 per cent increase in RevPAR compared to July 2022, driven by a 6.8 per cent increase in occupancy but held back from further growth by a 5.6 per cent decrease in ADR. Data from Hotstats for July 2023 showed most segments recorded minor ADR declines apart from luxury city centre hotels around Downtown, Business Bay, and SZR which recorded a 2.0 per cent increase. Luxury beach resorts recorded a similar increase in occupancy as other segments but with a larger ADR decrease of 13 per cent.