Dubai’s tourism sector thrives with hospitality industry matching demand

Dubai’s tourism sector continued to thrive as it welcomed a record 9.3 million overnight guests in the first half of 2024, a 9% increase from the same period of the previous year with the luxury hospitality industry also showing sharp growth and set to strengthen further, according to Cavendish Maxwell.

The property consultancy assessed Dubai’s market performance in the first half in a report titled ‘Dubai’s Hospitality Sector’ published on Thursday.

DXB welcomed a record 44.9 million in the first half of 2024 – an 8% rise from the same period last year, and is expecting passenger forecast to reach 91 million by the end of the year. Dubai’s airport also topped the list of most-connected airports in the Middle East and Africa, according to a recent report.

DXB had seen nearly 87 million passengers in 2023.

Meanwhile, the report said the tourism sector contributed to the UAE’s economy, registering an 11.7% increase in Gross Domestic Product (GDP) in 2023, amounting to AED220 billion.

“Government officials stressed that the sector is anticipated to contribute 12% to the UAE’s GDP, equating to AED236 billion in 2024,” the report added.

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Western Europeans were the biggest tourist group in Dubai, accounting for 20% (1.9 million). South Asians, Eastern Europeans, and the GCC region followed closely behind at 17%, 15%, and 14%, respectively.

The hospitality industry has also been keeping up with tourism levels in Dubai, adjusting supply to meet demand.

Dubai experienced a 4.8% uptick in the number of hotels, rising from 602 to 631. A marked increase was noted in the number of luxury establishments with 5-star hotels noting a 111.4% increase.

The average daily rate for hotels is also expected to continue rising.

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Luxury openings in 2024 have included The Lana Dubai Dorchester Collection, SIRO One Za’abeel, One & Only One Za’abeel, FIVE Luxe JBR as well as Address Palace Dubai Creek Harbour.

These new completions added approximately 1,090 new rooms to the existing supply.

Projects within the luxury segment anticipated for completion by 2024 include Ciel Dubai Marina with 1,209 keys, Viceroy Dubai Business Bay with 433 keys, Port De La Mer Hotel with 400 keys, Heart of Europe Marbella Hotel with 196 keys, and Heart of Europe Berlin Hotel with 200 keys.

Additionally, luxury supply is projected to experience significant growth in 2025, with 8 new openings adding approximately 1,140 rooms.

Earlier this year, Sheikh Mohammed bin Rashid al-Maktoum announced plans for a new passenger terminal in Al Maktoum International airport worth 128 billion AED ($34.85 billion).

Set to accommodate up to 260 million passengers, it will be five times the size of Dubai International Airport.

The report assessed that the growth trajectory will continue due to Dubai’s “robust economy, increased infrastructure investment, and focus on experience-based tourism.”

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As Dubai continues to grow as a major tourist destination, it will have to prioritise innovation, unique experiences, and sustainability.