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The Growing Hospitality Market in the UAE

Hospitality in the UAE is a thriving sector, with an estimated market size of USD 7.37 billion in 2024 and expected to grow to USD 9.46 billion by 2029, at a steady compound annual growth rate, CAGR, of 5.12%. The UAE’s booming tourism industry, a key source of non-oil revenue, is a major driver of this growth, underscoring the strong link between hotel demand and the influx of international travelers. The country has earned its status as a premier global destination for both leisure and business visitors, greatly benefiting its hospitality market.
 

Contributing to this success are several factors, including the UAE’s geopolitical stability, cutting-edge infrastructure, and commitment to hosting high-profile international events, all of which have elevated its appeal on the world stage. Domestically, tourism remains robust, with staycations gaining popularity among residents. This trend is fueled by the convenience, safety, and the allure of discovering what the UAE has to offer. 

hospitality market in the uae

Tourism Fuels Hospitality Market

Dubai welcomed 1.62 million international overnight visitors from January to June 2024, slightly surpassing the 1.60 million arrivals during the same period in 2023. In total, Dubai received over 9.31 million international overnight visitors in the first half of 2024, reflecting a 9% year-on-year growth.

By the end of 2024, Dubai will see the launch of 31 new hotels, with an additional 16 set to open in 2025, bringing the total to 851 hotels by the end of 2024 and 867 by the end of 2025, according to a new report from Cavendish Maxwell. The year began with the openings of notable establishments like ‘One & Only One Za’abeel,’ ‘Mercure Dubai Deira,’ and ‘The Lana Dubai Dorchester Collection.’ 

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Dubai’s recent tourism performance and future ambitions have earned global acclaim, with the city being ranked the No. 1 global destination in the TripAdvisor Travellers’ Choice Awards 2024 for the third consecutive year and securing the top regional spot and sixth globally in the World’s Best Cities Report 2024. These accolades highlight Dubai’s commitment to tourism excellence and its standing as a premier global destination. 

hospitality market in the uae

Similarly, Abu Dhabi’s tourism sector is seeing remarkable growth, with recent data from the Statistics Centre Abu Dhabi showcasing strong visitor numbers and hotel revenues in the first five months of 2024. This surge highlights the emirate’s rising appeal as a global tourist destination and its economic resilience in the post-pandemic era. From January to May 2024, over 2.4 million visitors stayed in Abu Dhabi hotels, generating Dh3.18 billion in hotel revenues. As of May 2024, the emirate had 169 hotel establishments with a total of 34,079 rooms.

Aldar Properties, the Abu Dhabi government-owned real estate company, is investing AED 1.5 billion to transform its hotels into luxury resort-style properties, introducing the Waldorf Astoria and IHG Vignette Collection brands to Abu Dhabi for the first time.

The Eastern Mangroves hotel will be rebranded as a Waldorf Astoria resort, featuring luxury residences, a revamped promenade, marina enhancements, and a new retail offering. Yas Plaza Hotels will become the world’s largest Vignette Collection resort, while the former Tilal Liwa in the Al Dhafra region will be transformed into a luxury desert destination under the Vignette Collection.

Additionally, the luxury resort on Nurai Island is undergoing a significant refurbishment and expansion to further enhance its status as Abu Dhabi’s premier ultra-luxury destination. With nearly 24 million visitors in 2023, including a 27% rise in hotel guests and a 54% increase in international visitors, Aldar is poised to leverage this growth and contribute to the Department of Culture and Tourism – Abu Dhabi’s goal of attracting 39.3 million visitors by 2030.

hospitality market in the uae
 

General Outlook

The UAE’s key performance indicators in the hospitality sector continue to show strong resilience, driven by high visitation levels. This trend is expected to accelerate throughout the year, with several upcoming events poised to boost occupancy and rates to record highs. The UAE hospitality market also offers ample opportunities for new entrants, as evidenced by the strong presence of global giants like Marriott, which operates over 55 hotels and 16,000 rooms across the country. Additionally, local hospitality groups such as Jumeirah Group, DAMAC Group, and Emaar Hospitality have established a significant presence across major emirates including Dubai, Abu Dhabi, and Ras Al Khaimah.

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