UAE Hospitality Industry Report 2024-2025 | Market Trends & Growth Insights

The UAE hospitality industry is experiencing significant growth, driven by a strong economy, ambitious tourism targets, and a post-pandemic travel resurgence. Major cities such as Dubai and Abu Dhabi lead in performance, while Ras Al Khaimah and Sharjah are emerging as niche tourism destinations.

Key Statistics and Market Performance

• Economic Growth: UAE's real GDP is expected to grow by 5.1% in 2025, up from 4% in 2024.
• Tourism Contribution: The travel and tourism sector is projected to contribute 12.5% to GDP in 2025 (AED 245 billion).
• Visitor Growth:
  • Dubai welcomed 10.62 million tourists in Jan–Jul 2024 (+8% YoY).
  • Abu Dhabi saw 2.87 million hotel guests in H1 2024 (+19.5% YoY).
• Hotel Performance:
  • RevPAR (Revenue per Available Room) grew to USD 169 in Dubai (+6% YoY) and USD 127 in Abu Dhabi (+24% YoY).
  • Hotel occupancy: Averaged 76% nationally; Dubai (81%), Abu Dhabi (80%).
  • Room Supply: Expected to increase from 211,580 (mid-2024) to 218,669 (end-2024), a 4.4% rise.

Market Trends

1. Luxury and Ultra-Luxury Demand:

   • 42% of upcoming hotels fall in the luxury or upper-upscale category.
   • High-end projects like Atlantis The Royal and upcoming ultra-luxury resorts cater to affluent travelers.

2. Rise of Midscale Tourism:

   • Mid-range and budget hotels are expanding to accommodate growing regional and long-stay tourists.
   • Brands like Rove, Premier Inn, and Hampton by Hilton are increasing their presence.

3. Government Initiatives & Mega Events:

   • Tourism Strategy 2031: Aims to attract AED 100 billion in investments and 40 million visitors annually by 2031.
   • Mega-events like Expo 2020, COP28, and expanded cruise tourism are driving demand.

4. Sustainability Focus:

   • The Dubai Sustainable Tourism (DST) initiative enforces 19 green regulations for hotels.
   • Eco-conscious resorts like Earth Mangroves in Abu Dhabi are gaining traction.

Upcoming Hospitality Projects (2025 & Beyond)

• Al Nawras Island, Abu Dhabi (LXR by Hilton) – High-end all-villa resort.
• Ciel Tower, Dubai Marina – Set to become the world’s tallest hotel.
• Jumeirah Marsa Al Arab, Dubai – Ultra-luxury resort next to Burj Al Arab.
• Cloud7 Camp Jebel Jais, Ras Al Khaimah – Luxury glamping in Jebel Jais mountains.

Competitive Landscape

• Major players: Accor (25% market share), Marriott (23%), Hilton (21%), IHG (14%), Rotana (12%).
• Focus on differentiation: International brands dominate, but niche and boutique hotels are emerging.

Challenges & Risks

• Oversupply risk: Dubai’s high hotel-to-population ratio could lead to market saturation.
• Geopolitical uncertainty: Regional conflicts could impact visitor sentiment.
• Labor & regulatory concerns: The UAE’s hospitality sector depends on expatriate labor, making workforce regulations crucial.

The UAE hospitality industry is on a strong growth trajectory, supported by government initiatives, mega-events, and increasing visitor numbers. While challenges such as potential oversupply and labor regulations exist, the market remains investor-friendly with sustained demand for both luxury and midscale offerings.

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