Dubai and Qatar expand luxury hotel portfolios

Dubai Tourism

• Dubai to add 9,200 rooms by year end
• 78% of Qatar rooms to be luxury
• 8.6m tourists visited Dubai in H1

Thousands of luxury hotel rooms are set to open in Dubai and Qatar over the next few years as the hospitality sector bounces back from the pandemic.

In Dubai, about 9,200 hotel rooms will be completed by the end of 2023, according to real estate consultancy Knight Frank. More than two-thirds of the supply will cater to the luxury segment.

In Qatar, top-tier accommodation is forecast to grow from 74 percent of the total today to 78 percent by 2028.

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Dubai will have around 154,000 rooms operating by the end of 2023, a 6.4 percent increase on the previous year. Internationally branded hotels make up 67 percent of Dubai’s existing supply.

Turab Saleem, partner at Knight Frank, said 70 percent of the rooms under construction and in final planning in Dubai are luxury or upper upscale, “catering to discerning travellers”.

Tens of thousands of additional keys are also planned across the UAE.

In Qatar, room supply is forecast to reach 53,400 by 2028, including under-construction and planned developments. A further 14,400 keys will be added to its inventory in the next five years.

Tourism in the GCC continues to rebound after the pandemic. Dubai recorded 8.6 million tourists in the first half, a 20 percent increase from 2022. Qatar had a 167 percent increase in visitors from January to July, with arrivals hitting 2.5 million.

According to data from analyst STR, cited by Knight Frank, the Dubai market as a whole recorded a 0.8 percent increase in revenue per average room in July compared with July 2022. This was driven by a 6.8 percent increase in occupancy, but held back from further growth by a 5.6 percent decrease in average daily rate.

Data from Hotstats showed that most hotel types recorded small declines in average daily rate for July 2023. However, luxury city centre hotels around Downtown, Business Bay and Sheikh Zayed Road reported a 2 percent increase. 

Luxury beach resorts recorded a similar increase in occupancy as other segments, but with a larger average daily rate decrease of 13 percent.