Luxury leads the way as Dubai’s hotel inventory reaches 158,700 rooms

Dubai, UAE: Dubai’s hotel inventory reached 158,700 keys across 770 establishments in 2025, with almost 70% in the high-end category, says leading real estate advisory and property consultancy, Cavendish Maxwell.

Dubai opened 3,400 rooms last year, representing an annual growth of 2.2%. Ten new hotels came to the market, an increase of 1.3% on 2024, the company said. Another 4,600 rooms are scheduled for completion in 2026.

Cavendish Maxwell’s Dubai Hospitality Sector 2025 Market Performance report reveals that high-end hotels – those in the Upscale, Upper Upscale and Luxury categories – accounted for nearly 7 in 10 properties at the end of 2025, with around 30% in the mid-range, more affordable segments. Almost 90% of hotels slated for delivery this year are in the higher-class segments.

Hotel occupancy in Dubai reached an average 81% last year – an annual average growth of 3.8%. Upscale hotels saw the biggest increase in occupancy (4.9%), with the Luxury category recording a 4.5% rise. The highest occupancy, at 84.4%, was in the Upper Midscale segment.

Average Daily Rates (ADR) climbed to an average $203 (AED746), an increase of 8.7% on 2024, with the Upper Midscale segment claiming the biggest rise, at 10.4%.

Vidhi Shah MRICS, Director, Head of Commercial Valuation at Cavendish Maxwell, said:

Dubai’s tourism and hospitality sectors continued to perform strongly in 2025. The city’s diverse offerings – an expanded events calendar, a growing portfolio of hotels and resorts, adventure experiences, globally-renowned shopping festivals and world-class dining scene – have driven a shift in travel behaviour, with tourists moving beyond traditional sightseeing towards high- impact, experiential travel.

Dubai welcomed 19.6 million tourists last year, with Western Europe retaining its position as the biggest source market (21%). Next was GCC (15.3%), followed by CIS and Eastern Europe (14.8%), South Asia (14.7%), MENA (11.1%), North and South-east Asia (9.5%), The Americas (7.1%), Africa (4.6%) and Australasia (2%).

The hospitality sector also performed strongly in other parts of the UAE, with robust occupancy levels and ADR growth. Abu Dhabi led the market, with 82.8% occupancy at city hotels and 78.6% at resorts. ADR was up by 21.3% at both city and resort properties.

In Ras Al Khaimah, occupancy rose 4.6% to reach 75%, with ADR climbing 6.6% to $168 (AED618). Meanwhile, Fujairah maintained a stable occupancy rate of almost 75%, with ADR increasing 12.8% to $118 (AED433).

While geopolitical tension introduces near-term uncertainty, Dubai’s core fundamentals remain robust. Combined with its proven crisis recovery capabilities, Dubai is expected to maintain its position as one of the world’s most resilient, competitive and diversified tourism destinations.

Download the full report here.