Dubai hotel occupancy to rise to 81% in 2025 on influx of tourists, entrepreneurs and millionaires

Dubai's push to attract more tourists, businesses and ultra-wealthy people is set to fill up its hotels to above 80 per cent this year, new research shows.

The emirate's hotels are projected to record an 81 per cent increase in occupancy rates this year, up 4.6 per cent on 2024, according to data provided to The National by STR, a CoStar group company specialising in hospitality and commercial real estate data research. The average daily room rate at Dubai hotels is projected to rise 6.5 per cent to Dh730 ($198.8), STR data shows.

“The UAE is the best-managed country on the planet from a tourism point of view. There's a drive to make this a successful city in terms of leisure travel, business events and medical tourism,” Philip Wooller, STR's regional director for the Middle East and Africa, said in an interview.

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“There's huge interest from successful entrepreneurs in moving to the UAE and … there's a migration of the wealthy because this is a business-friendly country,” he added, pointing to the influx of millionaires from the UK as an example.

The emirate is doubling down on hosting large-scale global events such as Adipec, Idex, Gitex and the upcoming Dubai Airshow in November.

Capitalising on its pleasant winter weather, it has also curated a busy calendar of entertainment events including music concerts and art shows, and identified culinary concepts to replicate in its hotels to attract international tourists to stay in the city rather than just transit through its airport. Dubai's tourism chief Issam Kazim has highlighted the strategy of positioning Dubai as a leisure destination that aims to attract repeat visitors.

Dubai hosted 12.54 million international overnight visitors in the first eight months of 2025 − up 5 per cent year on year, according to the Department of Economy & Tourism. Around 21 per cent are from Western Europe, 15 per cent from South Asia, 14 per cent from the CIS and Eastern Europe and 11 per cent from the Mena region. The rest are from the Americas, Africa and Australasia.

During the January to August period, the emirate recorded 29.03 million occupied room nights at the city’s hotels, up 4 per cent year on year, with an occupancy rate of 78.5 per cent, a two per cent rise year on year. The average daily rate for the hotel rooms rose 4 per cent to Dh526, while revenue per available room increased 8 per cent to Dh413 on an annual basis.

Dubai Airport, the world's busiest hub by international passenger traffic, expects to handle 95.3 million travellers this year and to cross the 100 million mark within 18 months, it said in October.

A maturing market?

A panel of UAE hoteliers said the Dubai market continues to grow and has not yet reached its saturation point amid the surge in inbound tourists, they told the Future Hospitality Summit (FHS) in Dubai on Tuesday.

IHG Hotels and Resorts' regional boss said he has not seen any “shortfall” in demand compared to the existing supply of hotel rooms.

“Q4 is really amazing in terms of demand, so is Q1 next year, there's a ripple effect of continuation of demand for the region for tourism which is incredible,” Haitham Mattar, IHG's managing director in the Middle East, Africa and South-West Asia told the event.

“There's not really a point of saturation that we've seen in Dubai,” he said when asked how long growth can continue before it becomes a mature market.

Philip Barnes, chief executive of the Abu Dhabi hotel operator Rotana, said he has “tremendous confidence” in the UAE market, while there are other countries in the region that will “blossom” in the next decade as travellers seek new destinations and experiences.

“This region as a whole has a tremendous amount to offer, as indeed does Africa, which is very much on my radar screen,” he said.

The region's hospitality sector is a “buoyant” market and “the next decade is for the Middle East to lose”, Mr Mattar said, noting that India is showing amazing, phenomenal potential”, while Africa “has so much to offer”.

In terms of supply, there are 141,000 rooms in the pipeline (in terms of planning, final planning and under construction) in the Middle East as of October 2025, according to STR.

Saudi Arabia is leading the new pipeline in the GCC with a 59 per cent increase in supply, followed by the UAE with a 10.8 per cent increase in the number of hotel rooms, STR data showed.

Abu Dhabi market growth

Meanwhile, the UAE capital's hotels are also forecast to record high occupancy levels of 80.8 per cent this year, compared to 78.9 per cent in 2024, according to STR data. Abu Dhabi hotels' average daily room rate is projected to reach Dh697 in 2025, jumping 13.7 per cent last year.

This is largely driven by hosting major sporting events such as Formula One, music concerts such as Coldplay and major business events such as Idex, said Sarah Duignan, director of client relationships at STR, during a presentation at FHS on Tuesday.

Among all the F1 markets in the GCC, Abu Dhabi leads the way for the highest hotel average daily room rate of nearly $700 in 2024, STR data shows. That compares with $400 in Bahrain, nearly $200 in Doha and nearly $500 in Jeddah during the three-day F1 race period last year.

Meanwhile, the Coldplay concert in Abu Dhabi this year drove average daily hotel room rates in the capital city to just shy of Dh1,000, Ms Duignan said.

“The competition is definitely heating up between Dubai and Abu Dhabi,” she said, pointing to a Dh30 difference in average daily room rates between the two emirates in the year to date through to September. This compares with a price difference of Dh331 in 2015 and Dh119, indicating that the gap in pricing is closing.

“This does not mean that Dubai is declining in average rate. Quite the opposite. It just means that Abu Dhabi is catching up,” she said.