Vidhi Shah, Director, Head of Commercial Valuation at Cavendish Maxwell
Hotel occupancy levels across Dubai reached more than 81% – up 4.5% year-on-year- with the number of international visitors climbing 6.1% to almost 10 million between January and June 2025, according to new research and insight from leading real estate advisory group, Cavendish Maxwell.
Cavendish Maxwell’s H1 2025 Dubai hospitality sector market performance analysis also reports that the average daily rate (ADR) across Dubai’s hotels and resorts topped AED745, up 5.5% on the same period last year.
With Dubai’s peak tourism season fast approaching, the Emirate is gearing up to open 19 new establishments – with more than 5,000 rooms between them – by the end of 2025, bringing Dubai’s total inventory to 157,144 keys across 748 hotels. Almost 900 rooms, across 5 hotels were delivered in H1 this year.
Vidhi Shah, Director, Head of Commercial Valuation at Cavendish Maxwell, said: “The first half of this year has seen yet another outstanding performance from Dubai’s hospitality sector, which continues to lead the way in setting new benchmarks in safety, inclusivity and connectivity. Government initiatives, strategic international partnerships, a packed events calendar and new attractions, coupled with sustained ability to attract diverse visitor profiles while consistently elevating guests’ experiences, has led to growth in airport passenger traffic, tourist figures, hotel occupancy rates, ADR levels and overall hotel inventory. With 5,000 new rooms on the way this year – and another 6,000 in 2026 and 2027 – Dubai is set to remain and premium, global destination of choice for both leisure and business travellers.”
Cavendish Maxwell’s hospitality sector report also shows:
• Dubai’s hotel inventory has steadily risen from 670 establishments in 2021 to around 730 today – an increase of 9.3%
• In the same period, the number of keys has grown more nearly 11%, from 137,600 to 152,000
• Despite temporary airspace disruption in May and June, Dubai International airport handled 46 million passengers in H1 this year – a 2.3% increase year-on-year. At Dubai World Central, passenger traffic rose more than 36%
• More than two thirds (67%) of Dubai’s current hotel inventory falls in the Luxury, Upper Upscale or Upscale categories, with the remaining 33% in the Upper Midscale, Midscale or Economy segments
• 84% of upcoming hotels in 2025 are in the premium categories (Luxury, Upper Upscale and Upscale)
• Occupancy rose across all segments in H1, with Upscale hotels seeing the biggest increase of 5.5%
• ADRs climbed across all categories, with the biggest jump of 8.5% in Upper Midscale establishments
• Of the 9.9 million international visitors in H1, Western Europe was the biggest source market, accounting for more than 1 in 5 tourists – a 12% hike on last year
Upscale has the upper hand, Luxury set to lead the way
Of the 5,000 rooms set for delivery in the next six months, 30.4% are in the Upscale segment, 29.8% in the Upper Upscale and 24.25% are classed as Luxury. Prominent projects include the 259-key Mandarin Oriental Downtown, Anantara Seven City at Jumeirah Lakes Towers (78 keys) Jumeirah Living Business Bay, with 82 keys. In 2026, the pipeline shows a marked shift towards the Luxury sector, which is set to represent 61% of new supply. Examples include Ciel Dubai Marina, Dorchester Collection Ela by Omniyat and InterContinental Portofino.
Midrange, affordable categories (Upper Midscale, Midscale and Economy), collectively account for 15% of new rooms between July and December this year, and only 7.6% in 2026.
Occupancy rates
While Dubai’s occupancy rates climbed across all segments in H1, rates of growth varied from category or category. Across the board, occupancy hit more than 81%, 4.5% up on last year. Upscale hotels saw the biggest rise of 5.5% followed by Upper Upscale at 5.2% and Luxury at 4.5%. Upper-Midscale properties, despite maintaining the highest occupancy, saw a more modest gain of 3.43%. The increases are the result of a surge in international visitors and strong domestic staycation demand, said Cavendish Maxwell. The full-year forecast for occupancy in 2025 is 78.5%.
Average Daily Rate (ADR)
ADRs climbed 5.5% to reach AED745 in H1 Upper Midscale hotels seeing strongest increase, at 8.5% growth. Luxury establishments saw a rise of 4.9%, supported by high-spending leisure and business visitors. Upscale and Upper Upscale hotels posted more modest gains of 2.7% and 2.5% respectively.
Where are Dubai’s visitors coming from?
Western Europe remained the biggest source market for Dubai tourism in H1 this year, accounting for over 21% of visitors – a 12% increase on the same time last year. Visitors from the CIS and Eastern Europe accounted for 15.4% (up nearly 11%) and the GCC 15.3% (up 19%).
While accounting for less than 2% of overall visitors, the number of tourists from Australasia saw a notable jump of more than 14%. Similarly, at 7% of total tourists, the number of visitors from The Americas climbed almost 12%.
Beyond Dubai: what’s happening across the rest of the UAE?
Outside of Dubai, all emirates secured an increase in ADR in H1 2025. Abu Dhabi’s city hotels saw the biggest increase, of more 28%, followed by Abu Dhabi resorts at over 21%, supported by luxury experiences, beach tourism and wellness retreat that appeal to domestic and international visitors. In Ras Al Khaimah, ADR climbed 7.6%, thanks to an increase in adventure tourism, the appeal of mountain resorts and nature-based experiences, while Fujairah posted a 6.1% increase, fuelled by the attraction of coastal getaways and boutique resorts.
Occupancy rates at Abu Dhabi resorts grew strongly, with a 7.5% rise, while Abu Dhabi city hotels saw 1.1% growth. The improvements were supported by a 13% rise in passenger traffic at Abu Dhabi International Airport, which welcomed 15.8 million people between January and June. Enhanced air connectivity, combined with steady demand from corporate travel, the MICE sector and government-backed initiatives, further supported Abu Dhabi’s hospitality sector growth.
Meanwhile at the other end of the country at Ras Al Khaimah, which received 653,000 visitors in H1 (up 5.7% on H1 last year), occupancy rates rose 1.4%. Occupancy rates remained stable at Fujairah, thanks to initiatives including a United Nations World Tourism Organisation (UNWTO)-backed event highlighting the area’s adventure tourism and natural landscapes, coupled with new daily direct flights from Mumbai.
Read the full report here https://cavendishmaxwell.com/insights/market-reports/hospitality/dubai-hospitality-market-performance-h1-2025
