Analysis Tourism Demand for luxury keeps Dubai hotel openings upscale By Sunil Singh March 27, 2025, 2:08 PM Dubai Tourism There is no shortage of luxury accommodation in Dubai, including the Underwater Suite at the Atlantis hotel Five-star openings double in 2024 17% growth in four-star rooms Three-star segment declines Dubai’s traditional love of luxury hotels shows no signs of slowing. Five-star hotel openings dominated the sector in 2024, although industry experts insist mid-range and budget segments remain vital to the emirate’s long-term hospitality growth. Last year, nearly two-thirds of new hotel rooms added in 2024 were in the luxury and upper upscale segments, according to real estate consultancy Cavendish Maxwell. The five-star category nearly doubled its growth year on year, adding 1,933 rooms across seven new hotels, the consultancy said in a report. Meanwhile, the four-star category grew only moderately, with a 17 percent increase in new room supply – adding nine hotels in 2024, up from seven the previous year. “The dominance of luxury establishments is an ongoing pattern and remains the focus, and we do not foresee substantial mid-market growth in the short term,” said Gergely Balint, partner for valuation at Cavendish Maxwell. Dubai welcomed nearly 19 million tourists, a record, in 2024, 9 percent up from the previous year. In contrast, the three-star segment and serviced apartments declined, with new room additions falling 48 percent and 17 percent respectively versus 2023, the report said. Overall, nearly 70 percent of Dubai’s hotel room inventory consists of luxury, upper upscale and upscale properties as of 2024, with mid-range options comprising about one-third of total supply. Dubai’s high-end hospitality dominance will continue through 2025, with nearly 70 percent of new supply concentrated in luxury and upper upscale segments, according to the research. Foreign tourists to Dubai up by 9% in 2024 Immersive storytelling, posh cuisine and branded flats How many more hotel rooms can the Gulf take? Analysts believe that while luxury properties lead Dubai’s hotel market, a balanced supply mix is critical for the sector’s sustainable growth. “Prime sites are limited in nature and as they continue to be developed out, opportunities for further development will stagnate. This will result in an organic shift to the development of more affordable supply,” Ali Manzoor, hospitality and tourism head at CBRE Mena, told AGBI. Siddhartha Sattanathan, general manager of Radisson Hotel, Damac Hills, Dubai, said that, despite the persistent appeal of high-end venues, a variety of offerings is needed to maintain the emirate’s attractiveness. “A balanced hotel ecosystem, offering everything from ultra-luxury, boutique, to three- and four-star options, ensures Dubai remains inclusive, accessible and relevant on the world tourism map,” Sattanathan said. Register now: It’s easy and free AGBI registered members can access even more of our unique analysis and perspective on business and economics in the Middle East. Why sign uP Exclusive weekly email from our editor-in-chief Personalised weekly emails for your preferred industry sectors Read and download our insight packed white papers Access to our mobile app Prioritised access to live events Register for free Already registered? Sign in I’ll register later