UAE to have 9,200 more hotel rooms by end of this year, report finds

Total rooms in Dubai are expected to reach 154,000 by the end of 2023, up 6.4% from last year, Knight Frank says

A number of hotel operators are boosting room numbers as the UAE’s tourism sector continues to recover from the pandemic. Photo: Intercontinental

The UAE’s hotel room inventory is expected to continue to increase this year, with 9,200 new rooms to be added in Dubai alone amid a rebound in the country's tourism sector, a report has found.

The total number of rooms in emirate is expected to reach 154,000 by the end of 2023, up 6.4 per cent from last year, global consultancy Knight Frank said in its latest report. It did not, however, provide data for the other emirates.

“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 Tripadvisor, 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 and head of Mena research at Knight Frank.

The number of international visitors to Dubai exceeded pre-Covid levels in the first half of this year as the emirate's hospitality and tourism sector posted a record performance.

International visits to Dubai rose 20 per cent on an annual basis in the January to June period, the Dubai Media Office said last month, citing the latest data from Dubai’s Department of Economy and Tourism.

The emirate welcomed 8.55 million international visitors during the period, the best first-half performance yet, exceeding the pre-pandemic figure of 8.36 million tourists in the first half of 2019.

Growth in the UAE's hospitality and tourism industry comes on the back of the country's economic growth of 3.8 per cent on an annual basis in the first quarter of this year, boosted by its strong non-oil sector.

Abu Dhabi aims to attract more visitors and is “on track” to meet its target of attracting 24 million visitors this year, up from 18 million last year, Saood Al Hosani, undersecretary of the emirate's Department of Culture and Tourism, told The National in June.

The UAE capital plans to increase the tourism sector's contribution to its gross domestic product to 12 per cent by 2030, up from 5 per cent this year, he said at the time.

A number of hotel operators are boosting room numbers as the UAE’s tourism sector continues to recover from the pandemic.

Accor Group, which operates hotel brands including Sofitel, Novotel, Pullman, Mercure, and Fairmont, plans to add 49,510 more rooms by 2030 in the UAE adding to its 71,820 existing rooms, Knight Frank said.

Following closely are Marriott International, with 63,790 existing rooms and 52,790 planned by 2030, IHG Hotels and Resorts with 22,120 rooms in development and Hilton Worldwide 39,860 rooms in the pipeline over the next seven years.

Radisson Hotels is planning 11,651 additional rooms by 2030 and Rotana Hotels 10,807, according to the latest data.

"Dubai continues to dominate the UAE's hospitality landscape, with 70 per cent of the country's upcoming supply concentrated in the city,” said Turab Saleem, partner and head of hospitality, tourism and leisure advisory at Knight Frank.

“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, he added.

Meanwhile, average room rate for hotels in Dubai exceeded the regional average at $171, while occupancy reached 76 per cent, according to hospitality data analytics firm STR.

In Dubai, hotel revenue per available room (RevPar) growth is forecast at 1.6 per cent year-on-year for 2023, Kelsey Fenerty, analytics manager at STR, said at the Dubai Lodging Outlook event held in partnership with STR on Monday.

This growth has been largely driven by occupancy, which is expected to return to its long-run average this year even as the full-year average daily rate (ADR) has declined relative to 2022, she said.

For 2024, STR projects Dubai hotels' RevPar growth of 1.9 per cent year-over-year, with growth more balanced between occupancy and ADR, Ms Fenerty said.