Skip to content Skip to Search
Skip navigation

UAE’s hotel pipeline hits $32bn as tourism recovery continues
Sofitel Dubai The Palm, one of Accor's properties in the city. Accor is the largest hotel operator in the UAE
  • Operators plan to add 48,000 rooms by 2030, says Knight Frank
  • Guest numbers rose 42% to 12 million in first half of 2022
  • Some industry figures asking whether luxury market is oversupplied
  • Three-quarters of the new hotel rooms will be built in Dubai

The UAE’s hotel development pipeline has risen to $32 billion, analysts said on Tuesday, as visitor numbers continue to grow.

Property consultancy Knight Frank said another 48,000 rooms were planned for the Emirates by 2030 and their delivery would cost more than $30 billion.

UAE tourism revenues reached $5.2 billion in the first half of 2022, the government announced earlier this month. The number of hotel guests rose 42 percent year-on-year to 12 million in the six months.

“A strong tourism recovery” is expected in the upcoming winter season, said Sheikh Mohammed bin Rashid Al Maktoum, the UAE’s vice president and ruler of Dubai.

Knight Frank’s research comes as Simon Leigh, managing director of Premier Inn MENA, told AGBI that Dubai was probably already oversupplied with luxury hotels but there was scope for growth in the mid-market. 

“I’d say there’s enough supply. Is it oversupplied? Possibly. But not oversupplied within our segment. If you look at the general position in terms of room stock in the market, you’ve predominantly got five and four stars, which are about 75 percent of the total inventory,” Leigh said.

“We need to be very thoughtful, if we’re going to put more hotels in, whether we build and operate or take more under a management agreement. Would I choose to build, which is a slower and more expensive process? Probably not. I’d probably build in other countries.”

According to Alpen Capital, the UAE remained the most sought-after destination in the Middle East in 2021, with travel and tourism spending revenues of $27.4 billion. Saudi Arabia was second with $22.2 billion.

Together, the UAE and Saudi Arabia accounted for more than 64 percent of the total travel and tourism spend in the region last year.

International hotel firms keep on building

Knight Frank’s research found that the proportion of international hotel operators to local ones is set to rise to 60 percent by 2030, from 56 percent today.

Hilton is forecast to add the most rooms overall, with close to 5,000 new keys expected by the end of the decade – a 43 percent increase on its current stock. 

This mirrors the group’s plans in Saudi Arabia, where Hilton will emerge as the second biggest operator by 2030 with 19,000 rooms under management.

Hilton Abu Dhabi Yas Island. The group plans to add 5,000 rooms in the UAE

Knight Frank estimates that by 2030 the Accor Group will cement its place as UAE’s largest hotel room operator, with close to 25,000 rooms under management. It is also the biggest operator in Saudi Arabia.  

Faisal Durrani, partner and head of Middle East research at Knight Frank, said: “The UAE’s world-leading hospitality market is set to expand by 25 percent by 2030, with a further 48,000 rooms adding to the nation’s extensive 200,000 key portfolio.

“Perhaps unsurprisingly, Dubai is set to account for the lion’s share of this total, with 76 percent of all new rooms coming to the emirate, which already boasts over 130,000 rooms. This stockpile of hotel rooms is already higher than cities like London or New York.”

Turab Saleem, partner and head of tourism and hospitality at Knight Frank, said: “The UAE’s vibrant hospitality market continues to expand, with a clear focus on the luxury end of the price spectrum. Our analysis shows that 70 percent of all the rooms planned will fall in the four and five-star category.

“This comes at a time when Saudi Arabia is pushing ahead with what is set to be one of the world’s most ambitious hospitality development programmes that will see more than 275,000 hotel rooms built across the kingdom over the course of the 2020s at a total cost of $110 billion.”

According to Knight Frank, the UAE’s three biggest cities – Dubai, Abu Dhabi and Sharjah – continue to lead the region in terms of hotel performance, but Saudi Arabia’s cities are poised to experience a huge rise in demand as Vision 2030 unfolds and business as well as leisure travel begins to overwhelm the existing supply. This will lead to higher room rates, the consultancy added.

Ghazi D Mousharafieh, chief financial officer of Rotana Hotel Management Corporation, said the UAE-based company planned to add nearly 11,000 keys across the region.

“There is no doubt the pandemic highly impacted our industry but as world economies continue to recover, the industry is recovering simultaneously and adapting to changing consumer behaviour,” he added.

Latest articles

An artist's impression of part of the Diriyah Square development

Diriyah Square planned for historic Riyadh district

A public space featuring 400 retail outlets and 100 restaurants and cafes is planned for the historic Riyadh district of Diriyah. Diriyah Square will be announced next week at the World Retail Congress in Paris and aims to attract a combination of international retail brands and local artisans.  Diriyah Gate Development Authority group CEO Jerry […]

Nature, Undersea cables account for as much as 90 percent of Europe-Asia telecommunications, Water

Iraq and Kuwait team up for European telecom corridor

Iraq’s Informatics and Telecommunication Public Company, a division of the Ministry of Communications, has signed an agreement with Kuwait’s Zajil Telecom to create a telecommunications corridor from the Gulf region to Europe, transiting through Iraq and Turkey. The new route will pass through Iraqi sea and land ports. Iraq’s minister of communications Hayam Al-Yasiri said […]

Passengers at Beijing Capital International Airport. Air China will fly from the airport to Riyadh three times a week.

Third Chinese airline to launch flights to Saudi Arabia

Air China is set to begin flights to Riyadh in May, becoming the third Chinese airline to establish a route to Saudi Arabia. It joins China Southern and Eastern Airlines in connecting China with the kingdom.  Air China’s Airbus A330-300 will serve the Beijing-Riyadh route three times a week. The expansion in capacity between the […]

Highway traffic in California. Opec said the upcoming 'driving season' in the US will provide the usual additional demand for fuel

Opec stands by predictions for oil demand growth

Opec predicts robust fuel use this summer and has stuck to last month’s forecast of relatively strong growth in oil demand in 2024 and 2025. The oil producers’ organisation predicted in its monthly report that global demand will rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025. […]