UAE set to add 56,701 new hotel rooms by 2020

The UAE's hospitality market is expected to reach $7.6bln by 2022

Burj Al Arab at dusk, Dubai, UAE Dubaï, United Arab Emirates. Image used for illustrative purpose.

Burj Al Arab at dusk, Dubai, UAE Dubaï, United Arab Emirates. Image used for illustrative purpose.

Getty Images/ Gargolas

The UAE's hospitality sector is all geared up for the World Expo 2020 with a significant capacity boost by adding 56,701 rooms that represent 33.6 per cent of the country's existing supply over the next one year.

The latest available industry data shows that the UAE drives the Middle East hotel industry boom with an exponential surge in the number of new hotel projects and rooms, followed by Saudi Arabia with an additional supply of 42,571 room, accounting for 42.9 per cent of the kingdom's existing inventory.

By 2022, the UAE's hospitality market is expected to reach $7.6 billion, growing at a five-year CAGR of 8.5 per cent between 2017 and 2022, latest data shows.

Other countries in the region showing dynamic growth include Qatar with 13,086 rooms in the pipeline, accounting for 47.8 per cent of the current hotel room supply. Oman is next in line by adding 4,129 rooms by 2020.

A recent hospitality industry report said hotel supply in Dubai, the fourth most visited city in the world, is expected to reach 132,000 in 2019, with the emirate aiming to complete 160,000 hotel rooms by October 2020 - in time to welcome 25 million visitors for Expo 2020.

With 20 million annual visitors expected to visit Dubai next year, plus an additional five million between October 2020 and April 2021 - 70 per cent of which will come from outside the UAE - the overall hospitality supply in the emirate is expected to increase exponentially.

In Abu Dhabi, the number of guestrooms across three, four and five-star properties is forecast to grow 13 per cent from 21,782 in 2017 to 24,565 in 2021.

Dubai welcomed 15.92 million overnight visitors in 2018, according to the latest statistics published by Dubai Tourism, up from 15.79 million a year prior.

There were 716 hotels operating in Dubai last year, up from 681 in 2017, while occupied room nights reached 30.13 million, compared to 29.21 million in 2017.

STR's April 2019 pipeline data shows 424 hotel projects accounting for 125,052 rooms in construction in the Middle East and 141 projects and 25,056 rooms in construction in Africa.

The Middle East total represented a 9.3 per cent year-over-year increase in the number of rooms in the final phase of the development pipeline. The Middle East reported an additional 30,203 rooms in the final planning stage and 45,991 rooms in planning. The Africa total room construction total was down 7.1 per cent year over year. Africa also showed 13,854 rooms in final planning and 26,534 rooms in planning.

According to Ventures, the value of the GCC hotel projects market is expected to increase from $11.15 billion in 2018 to $11.61 billion in 2019. Much of the growth can be attributed to mega events such as the Dubai Expo 2020, the World Athletics Championship 2019, and the 2022 Fifa World Cup. The UAE itself witnessed an opening of approximately 1,200 branded hotel keys in the first quarter of 2018, and another 6,800 keys are expected to open by the end of the year.


Issac John

Associate Business Editor of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.


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