Dubai's hotel surge: What causes the average daily rate for rooms to reach Dh745?
Dubai's hospitality sector is experiencing a surge in growth, with significant increases in key indicators such as hotel occupancy, average daily rates (ADR), and the number of international visitors.
According to recent data, the average daily rate across Dubai's hotels and resorts has increased by 5.5% compared to the same period last year, reaching Dh745. This growth is reflected in various segments of the market, with approximately 84% of the new hotel supply concentrated in the premium segments: Luxury, Upper Upscale, and Upscale.
The trend towards high-end hotel developments in Dubai is expected to continue into 2026, with 5,000 rooms across 19 new hotels scheduled to open in the second half of the year. This expansion will bring Dubai's total hotel inventory to 157,144 keys across 748 hotels.
The increase in hotel supply is closely linked to the rise in tourist figures. In the first six months of the year, Dubai welcomed nearly 10 million international visitors, marking a 6.1% increase year-on-year. Western Europe remains the most significant source market for Dubai's international visitors, accounting for over 21% of all visitors.
Dubai International Airport handled 46 million passengers in H1 this year, marking a 2.3% increase year-on-year. At Dubai World Central, passenger traffic rose more than 36% in the first half of the year. Government initiatives, events, and new attractions have contributed to this growth in airport passenger traffic, tourist figures, hotel occupancy rates, ADR levels, and overall hotel inventory in Dubai.
Other Emirates have also seen growth in their hospitality sectors. Fujairah posted a 6.1% increase in ADR in H1 2025, fueled by the attraction of coastal getaways and boutique resorts. In Ras Al Khaimah, ADR climbed 7.6% in H1 2025, thanks to an increase in adventure tourism and the appeal of mountain resorts and nature-based experiences.
Abu Dhabi's city hotels saw the most considerable increase in ADR in H1 2025, of more than 28%. Abu Dhabi resorts also experienced an increase in ADR of over 21%.
Notable upcoming projects in Dubai include the Mandarin Oriental Downtown and Jumeirah Living Business Bay. With the addition of 5,000 rooms this year, followed by 6,000 in 2026 and 2027, Dubai is expected to remain a premium destination for both leisure and business travelers.
However, it's worth noting that temporary airspace disruptions occurred in May and June, but specific details about their impact were not provided in the article.
As the hospitality sector continues to grow, Dubai is poised to become an even more attractive destination for tourists and travellers alike. The expansion of hotel inventory, the increase in international visitors, and the rise in ADR levels all point to a robust and vibrant hospitality sector in Dubai.
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