Dubai Hospitality Market Performance H1 2026
1
Hospitality Market Overview Following a record performance in 2025, Dubai's hospitality market experienced an externally driven slowdown during H1 2026, as heightened regional geopolitical tensions and associated airspace disruptions weighed on international travel demand. The impact was most visible in aviation and hotel occupancy, with passenger traffic at Dubai International Airport (DXB) declining 31.7% year-on-year during the first five months of the year to approximately 26.6 million, while citywide hotel occupancy fell 30.3% to an average of 56.4%. The slowdown was largely linked to a temporary reduction in international arrivals, with several international carriers suspending or reducing services to Dubai during the period. The impact varied across hotel segments. Luxury and Upper Upscale properties recorded the steepest occupancy declines, reflecting their greater reliance on international long-distance travellers, while Midscale and Upper Midscale hotels proved more resilient, supported by a broader demand base including domestic, regional and corporate travellers. Despite the sharp decline in occupancy, Average Daily Rate (ADR) remained comparatively contained, declining by 7% year-on-year to AED 701. Operators broadly maintained pricing discipline and avoided widespread discounting, helping preserve the overall rate base despite weaker demand. A similar pattern was evident across the wider UAE, with Abu Dhabi, Ras Al Khaimah and Fujairah recording varying occupancy performance, while ADR remained relatively resilient. Hotel supply remained broadly stable during the period, with Dubai's hospitality market comprising 727 hotels and approximately 152,139 rooms in H1 2026. This represented a 1% decline in hotel establishments and a marginal 0.3% reduction in room inventory compared with year-end 2025, as several hotel closures offset new openings. Government support also provided relief to the sector, with economic support packages totalling AED 2.5 billion combining fee relief for operators with targeted demand-stimulation measures. The market is expected to recover gradually during the second half of 2026, with momentum strengthening from Q4 as international air connectivity improves and the winter tourism season supports visitor demand. Full-year occupancy is forecast within a range of 60.4%–66.2%, with ADR expected at AED 600–675. Annual passenger traffic is forecast at 67.6–79.3 million, remaining below the record levels achieved in 2025.
Market Snapshot for H1 2026 DXB Airport Passenger Traffic (Jan - May 2026)
26.6 million (-31.7%) Y-on-Y
Average Daily Rate
Occupancy Rates
AED 701
56.4% -30.3% Y-on-Y
-7% Y-on-Y
2
Dubai Hospitality Market Performance H1 2026
Estimated Upcoming Hotel Supply (2026)
15
Hotels
3,150 Rooms
Dubai Airport Passenger Traffic Passenger traffic at Dubai International Airport (DXB) softened
Dubai World Central (DWC) also recorded softer passenger traffic,
during the first five months of 2026, declining by 31.7%
with approximately 380,000 passengers during Q1 2026,
year-on-year to approximately 26.6 million passengers. The
representing a 21.4% year-on-year decline. Together, the
decline was largely driven by regional airspace disruptions arising
performance of Dubai's two airports highlights the impact of
from heightened geopolitical tensions in the region, alongside
regional disruption on aviation demand during the period.
seasonal travel patterns that affected international passenger flows. Several international airlines also temporarily suspended or
Looking ahead, passenger traffic at DXB is expected to improve
reduced services to Dubai, with some routes expected to resume
during the remainder of 2026 as air connectivity is restored and
later in 2026.
travel conditions become more stable. Full-year passenger volumes are anticipated to range between 67.6 million and 79.3
Despite the disruption, Dubai's home carriers, Emirates and
million, assuming a gradual recovery in regional connectivity
flydubai, maintained regional and international connectivity,
during H2 2026. The pace of recovery, however, will depend on
adjusting schedules where required. Emirates has also continued
the restoration of suspended routes, the return of international
to expand its network, announcing a new year-round daily service
travel demand and the broader stability of regional aviation
to Helsinki from October 2026, alongside additional frequencies
conditions.
to Cape Town, Copenhagen and Phuket. More broadly, UAE carriers including Etihad and Air Arabia continued to operate, helping maintain connectivity across the wider UAE.
Passenger Traffic - Dubai International Airport (DXB) 150%
100 127.1% 127.1%
80
100%
70 60
12.4%
50 40
50%
31.5% 6.2%
-3.1%
3.1% 3.1%
0%
30 -50%
20 10
Change % (Y-on-Y)
Passenger Traffic (millions)
90
-70.0%
0
-100% 2019
2020
2021
Passenger Traffic
2022 Change %
2023
2024
Forecast (
Higher Case
2025
2026
Lower Case)
Source: Cavendish Maxwell, Data.Dubai
Disclaimer on Forecast The above forecast incorporates the observed impact of geopolitical tensions on passenger traffic from March 2026 onwards and projects a gradual recovery trajectory through the remainder of the year. Actual 2026 performance may differ materially from these projections depending on how regional conditions evolve. Forecasts may be revised as additional monthly data becomes available.
3
Dubai Hospitality Market Performance H1 2026
Current Supply As of June 2026, Dubai had approximately 727 hospitality establishments, offering around 152,139 rooms.
The supply side of the picture Dubai's hospitality sector has continued to expand over recent years, with new hotel developments broadly keeping pace with the emirate's growing tourism sector and long-term visitor demand. However, a small number of hotels closed during H1 2026, although these closures did not materially reduce the total number of hotel rooms available in Dubai. Our insights reveal that: Despite global disruptions, hotel supply recorded growth, with hotels reaching approximately 629 (+5% YoY) and room inventory increasing to around 126,376 (+6.8% YoY).
2020
2021
Expansion continued at a moderated pace, with hotels reaching approximately 690 (+3.8% YoY) and total rooms rising to around 141,474 (+5% YoY).
2022
2023
Supply growth accelerated, with the number of hotels rising to approximately 665 (+5.7% YoY) and rooms increasing to around 134,677 (+6.6% YoY), marking a strong recovery in the sector.
Hotel supply continued to expand steadily, with establishments increasing to approximately 724 (+3% YoY) and room inventory rising to around 149,121 (+3% YoY).
2024
Growth eased as the market matured, with hotel numbers increasing to approximately 703 (+1.9% YoY) and room supply reaching around 144,767 (+2.3% YoY).
2025
By mid-2026, Dubai's hospitality market comprised approximately 727 hotels and 152,139 rooms. Compared with year-end 2025, the number of hotels declined by 1%, while room inventory decreased marginally by 0.3%, indicating a modest reduction in overall hotel supply.
2026
Supply growth moderated, with hotels reaching approximately 734 (+1.4% YoY) and total room inventory expanding to around 152,535 rooms (+2.3% YoY), reflecting a more balanced pace of development.
Source: Cavendish Maxwell, STR, a CoStar Group Company Note: Hotel supply figures have been updated using the latest available data and include hotels that are temporarily offline due to renovation or refurbishment.
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Dubai Hospitality Market Performance H1 2026
Existing Hospitality Supply Dubai's hospitality inventory stood at 727 hotels comprising approximately 152,139 rooms in H1 2026, representing declines of 1% and 0.3%, respectively, compared with year-end 2025. During the period, three new hotels commenced operations, although these additions were offset by the closure of several existing properties, resulting in a marginal reduction in overall recorded hotel supply.
Dubai Hospitality Building Supply - 2019 to H1 2026 800
8% 7.2%
6%
5.7%
600 No. of Hotels
7%
5%
5%
500
4%
400
3.8%
3%
300
3% 1.9%
200
2%
Change % (Y-on-Y)
700
127.1%
1%
1.4%
100
0%
0
-1%
2019
2020
2021
2022 No. of Hotels
2023
2024
2025
-1%
H1 2026
Change %
Dubai Hospitality Room Supply - 2019 to H1 2026 160,000
16% 127.1%
14% 12%
120,000 100,000
10%
9.8%
8%
80,000
6.8%
6.6%
60,000
6%
5%
4%
40,000
2.3%
3%
2.3%
20,000
2% -0.3%
-1%
0 2019
2020
2021
2022
No. of Rooms
2023
2024
2025
Change %
Source: Cavendish Maxwell, STR, a CoStar Group Company Note: Hotel supply figures have been updated using the latest available data and include hotels that are temporarily offline due to renovation or refurbishment.
5
0%
Dubai Hospitality Market Performance H1 2026
H1 2026
Change % (Y-on-Y)
No. of Rooms
140,000
Dubai’s hospitality recovery will depend on the timely restoration of international air connectivity and traveller confidence. However, the current slowdown should be viewed as a short-term, externally driven disruption rather than a change in the emirate’s long-term hospitality growth story,
supported
by
resilient
market
fundamentals and a diversified tourism offering.
Ferras Hafez Associate Director, Commercial Valuation
Current Hospitality Room Inventory: By Classification Dubai's hospitality supply continues to be concentrated in the premium segments. As of H1 2026, Upscale hotels accounted for the largest share of room inventory at 24.3%, followed by Upper Upscale at 21.7% and Luxury at 21.5%. Collectively, these three segments represented 67.5% of the emirate's total hotel room inventory, highlighting the market's strong premium positioning. However, this concentration also leaves a larger proportion of the market exposed to fluctuations in international leisure demand and air connectivity. By comparison, Midscale and Upper Midscale properties accounted for 14.4% and 13.7% of inventory, respectively, while Economy hotels represented the remaining 4.5%.
Current Hospitality Room Inventory by Classification - As of H1 2026 24.3% Upscale
21.7% Upper Upscale
21.5% Luxury
14.4% Midscale
13.7% Upper Midscale
4.5% Economy
Source: Cavendish Maxwell, STR, a CoStar Group Company
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Dubai Hospitality Market Performance H1 2026
Future Supply Dubai's hotel supply is expected to continue expanding over the coming years, with approximately 39 hotels comprising around 9,520 rooms currently scheduled for delivery between 2026 and 2029. Around 3,150 rooms are expected to be completed by the end of 2026, increasing total room inventory to approximately 155,300 rooms, followed by a further 2,580 rooms in 2027 and 2,470 rooms in 2028. While new supply is expected to continue entering the market, the annual pace of growth is projected to moderate from 2.1% in 2026 to 0.8% by 2029, indicating a measured expansion of the overall hotel stock. However, delivery timelines have historically been subject to delays, and the current regional environment could result in further changes to the timing of some projects. This could result in some planned supply being deferred into later periods.
2026
2027
2028
2029
No. of Hotels
15
10
8
6
Cumulative
742
752
760
766
No. of Rooms
3,153
2,579
2,466
1,323
Cumulative
155,292
157,871
160,337
161,660
2.1%
1.7%
1.6%
0.8%
Growth (Y-o-Y) Source: Cavendish Maxwell, STR, a CoStar Group Company
The composition of future supply points to a shift in the type of accommodation being developed. While the remainder of the 2026 pipeline is relatively balanced across the Upscale, Upper Upscale and Luxury segments, planned deliveries in 2027 and 2028 are heavily concentrated in Luxury hotels, which account for more than 80% of new rooms. By 2029, the pipeline is expected to become more diversified, with additions across the Upscale, Upper Upscale, Luxury and Upper Midscale segments. This concentration of new supply in the Luxury segment is likely to increase competition across the premium segments, particularly as operators continue to navigate softer demand conditions in the near term. However, the relatively gradual pace of deliveries should allow the market time to absorb additional inventory. At the same time, investment in Dubai's wider hospitality offering, including a strong pipeline of international restaurants and homegrown F&B concepts expected to open through 2026, suggests that investors and operators continue to see longer-term potential in the emirate's tourism market. While the timing of the recovery in visitor demand remains uncertain, the continued expansion of Dubai's hospitality and F&B offering should support the market's longer-term growth prospects.
Hospitality Room Inventory by Classification - Upcoming Supply
H2 2026
2027
2028
26.1%
4.6%
30.3%
13.2%
6.8%
82.7%
25.4%
Upscale
22.4%
Upper Upscale
Source: Cavendish Maxwell, STR, a CoStar Group Company
Dubai Hospitality Market Performance H1 2026
4.6%
82.2%
11.8%
2029
7
32.3%
Luxury
5.6%
28.9%
Midscale
Upper Midscale
23.2%
Economy
Market Performance Occupancy Hotel occupancy across Dubai averaged 56.4% during H1 2026, representing a 30.3% year-on-year decline, driven by weaker international travel demand amid regional airspace disruptions and heightened geopolitical uncertainty. Luxury and Upper Upscale hotels recorded the largest decreases, with occupancy averaging 51.2% and 51.8%, respectively, while the Upper Midscale segment remained the strongest performer at 65.7%. Upscale and Midscale hotels recorded occupancy levels of 58.7% and 63.7%, respectively. The divergence in performance across segments reflects the differing demand profiles of each tier. The relative resilience of mid-market hotels reflects their broader demand base, including domestic, regional and corporate travellers, which provided a degree of insulation during the period. Premium hotels, by contrast, are typically more dependent on international leisure demand and higher-spending travellers, making them more sensitive to disruptions in air connectivity, travel confidence and discretionary spending. This exposure amplified the impact of regional disruption on their performance. Encouragingly, the year-on-year decline has narrowed progressively since April, pointing to a gradual improvement in occupancy performance in recent months, partly supported by targeted promotions and staycation campaigns that helped sustain domestic demand during the period. Occupancy is expected to continue recovering through the remainder of 2026 as air connectivity is restored and international travel demand gradually returns.
Occupancy by Classification - YTD June 2026
127.1%
70%
127.1%
Occupancy
-10%
50%
-15%
40% -22.5%
30% -30.3%
-20% -23.4%
10%
-35.1%
-35%
-33.9%
-40%
0% Dubai (Avg)
Dubai Luxury
Dubai Upper Upscale YTD Occupancy
Source: Cavendish Maxwell, STR, a CoStar Group Company
8
-25% -30%
-29.4%
Dubai Hospitality Market Performance H1 2026
Dubai Upscale Change %
Dubai Upper Midscale
Dubai Midscale
Change % (Y-on-Y)
-5%
60%
20%
0%
Average Daily Rate (ADR) Despite the sharp decline in occupancy during H1 2026, citywide ADR remained comparatively contained, declining by 7% year-on-year to AED 701. This relatively modest decline, compared with the sharper 30.3% fall in occupancy, suggests that operators across segments prioritised rate preservation over volume and broadly avoided aggressive discounting to stimulate demand. By segment, Luxury hotels continued to command the highest room rates despite a 6.2% decline, while the Upper Upscale segment proved the most resilient, with ADR easing by just 2%. The Upscale, Midscale and Upper Midscale segments also recorded moderate declines of 3.1%, 2.4% and 4.4%, respectively. This pricing discipline has helped protect the overall rate base and could support a more meaningful recovery in revenue performance once occupancy levels normalise.
Average Daily Rate by Classification - YTD June 2026 0%
1,800 1,600 -2%
AED
1,200
127.1%
127.1% -2.4%
-3.1%
1,000
-5%
600
-6%
400 200
-7%
-6.2%
-7%
-8%
0 Dubai (Avg)
Dubai Luxury
Dubai Upper Upscale YTD ADR
Source: Cavendish Maxwell, STR, a CoStar Group Company
9
-3% -4%
-4.4%
800
-2%
Dubai Hospitality Market Performance H1 2026
Dubai Upscale
Change %
Dubai Upper Midscale
Dubai Midscale
Change % (Y-on-Y)
-1%
1,400
Hospitality Market Forecast Dubai's hospitality market is expected to recover gradually over the remainder of 2026 as regional conditions stabilise, and international air connectivity improves. By year-end, hotel occupancy is forecast to range between 60.4% and 66.2%, while ADR is expected to range from AED 600 to AED 675. With market conditions expected to improve through the remainder of the year, the recovery is unlikely to fully offset the slowdown recorded during H1 2026, particularly given the phased resumption of international airline services. As a result, full-year occupancy and ADR are expected to remain below the record levels recorded in 2025. At the same time, approximately 3,150 rooms are scheduled for delivery by year-end, adding further inventory as demand recovers. The pace at which this new supply is absorbed will be one of the factors influencing overall hotel performance through the remainder of 2026.
100%
40%
90%
30%
80%
20%
Occupancy
70%
10%
60% 50%
0%
40%
-10%
30%
-20%
20%
Change % (Y-on-Y)
Occupancy - Historic and Forecast
-30%
10%
-40%
0% 2019
2020 Occupancy
2021
2022
Change %
2023
2024
2025
Forecast (
Higher Case
2026(F)
Lower Case)
Source: Cavendish Maxwell
800
40%
700
30%
600
20%
AED
500
10%
400
0%
300
-10%
200 100
-20%
0.0
-30% 2019
2020
2021
ADR
Change %
2022
2023
Forecast (
2024
Higher Case
2025
Change % (Y-on-Y)
Average Daily Rate (ADR) - Historic and Forecast
2026(F)
Lower Case)
Source: Cavendish Maxwell
Disclaimer The above forecast incorporates the observed impact of geopolitical tensions on occupancy rates and ADR from March 2026 onwards and projects a gradual recovery trajectory through the remainder of the year. Actual 2026 performance may differ materially from these projections depending on how regional conditions evolve. Forecasts may be revised as additional monthly data becomes available.
10
Dubai Hospitality Market Performance H1 2026
Hospitality Market Performance – Other Emirates Hospitality performance across the other Emirates varied during H1 2026, with each market navigating the broader regional environment while continuing to develop its tourism offering. Abu Dhabi recorded City Hotel occupancy of 68.3% and ADR of AED 619, while Resorts achieved occupancy of 63.4% and ADR of AED 800. The emirate continued to invest in its cultural and experiential offering, alongside Etihad Airways’ expanded summer schedule and the launch of new international routes, supporting inbound connectivity during the period. Ras Al Khaimah recorded occupancy of 49.3%, while ADR increased by 5.2% year-on-year to AED 706, indicating continued pricing resilience despite softer occupancy. The emirate welcomed a record 670,000 visitors during H1 2026, supported by domestic tourism demand. Hospitality investment also remained active, with construction of the Wynn Al Marjan Island integrated resort progressing alongside a pipeline of more than 6,000 hotel keys in development, adding to the emirate's longer-term hotel supply. Fujairah recorded occupancy of 54.8% and ADR of AED 499, up 19.4% year-on-year. The emirate continued to develop its leisure tourism offering, with investment in resort facilities and a broader calendar of tourism and cultural events supporting the diversification of its visitor base.
Occupancy by Classification - H1 2026 80%
0%
70%
127.1%
60%
-10% -15.1%
-15%
40% -20%
-20.9%
30%
-23.7%
-25%
20% 10%
-30%
-32.1%
-35%
0% Abu Dhabi City Hotels
Abu Dhabi Resorts Occupancy
Source: Cavendish Maxwell, STR, a CoStar Group Company
11
Dubai Hospitality Market Performance H1 2026
Ras Al Khaimah Change %
Fujairah
Change % (Y-on-Y)
Occupancy
50%
-5%
Average Daily Rate by Classification - H1 2026
25.0%
900
20%
700
19.4%
600
127.1%
10%
500 400
5%
5.2%
300 200
15%
0% -1.1%
-5%
100 -7.9%
-10%
0 Abu Dhabi City Hotels
Abu Dhabi Resorts ADR
Source: Cavendish Maxwell, STR, a CoStar Group Company
12
Dubai Hospitality Market Performance H1 2026
Ras Al-Khaimah % Change
Fujairah
Change % (Y-on-Y)
AED
800
2026 Hospitality Market Outlook Dubai's hospitality market is expected to recover gradually through the second half of 2026, with momentum strengthening from Q4 as international air connectivity is restored and the winter high season takes effect. By year-end, hotel occupancy is forecast to range between 60.4% and 66.2%, while ADR is expected to range from AED 600 to AED 675, below the record levels achieved in 2025. These annual averages are expected to remain below 2025 levels primarily due to the weaker performance recorded during H1 2026. The restoration of international air connectivity is expected to remain the principal driver of the recovery. Carriers that suspended or reduced services to Dubai during H1 2026 are scheduled to resume operations during the second half of the year, coinciding with the winter travel season and progressively restoring capacity from the long-distance international markets most affected. Emirates continues to operate at close to pre-disruption levels, having restored approximately 85% of pre-conflict capacity, and is adding further capacity, which should support occupancy recovery, particularly in the premium segments that are more reliant on international long-distance travellers. Measures introduced by the UAE's major airlines are also expected to support traveller confidence. Emirates introduced comprehensive travel cover in June, including conflict-related protection and disruption support, while Etihad Airways and Abu Dhabi's Department of Culture and Tourism had introduced complimentary medical travel insurance for eligible international visitors. Government policy is also expected to remain supportive, with measures spanning both operator relief and demand stimulation. Following an initial AED 1 billion package in April that deferred hotel fees and the Tourism Dirham, a larger AED 1.5 billion package was subsequently introduced, suspending the Tourism Dirham and municipal fees on hotel and restaurant bills, alongside waivers on selected event-related charges. The Department of Economy and Tourism has also intensified demand-side activity through global marketing initiatives and campaigns including Dubai Summer Surprises and Dubai Invite, aimed at stimulating domestic, regional and international visitor demand. Looking ahead, the measured pace of new supply additions is expected to be gradually absorbed as occupancy recovers through the winter season. The pace of improvement will depend largely on the continued stabilisation of regional conditions, the restoration of international air connectivity and the strength of visitor demand, with any further deterioration in regional conditions likely to delay the recovery.
13
Dubai Hospitality Market Performance H1 2026
Authors Julian Roche
Ali Siddiqui
Chief Economist Cavendish Maxwell julian.roche@cavendishmaxwell.com
Research Manager ali.siddiqui@cavendishmaxwell.com +971 50 877 0190
Key Contacts Vidhi Shah
Ferras Hafez
Associate Director, Commercial Valuation ferras.hafez@cavendishmaxwell.com +971 50 839 5494
Director, Head of Commercial Valuation vidhi.shah@cavendishmaxwell.com +971 56 690 3186
Dylan Dinte
Zacky Sajjad
Director, Business Development and Client Relations zacky.sajjad@cavendishmaxwell.com +971 50 644 5089
Associate Director, Commercial Valuation dylan.dinte@cavendishmaxwell.com +971 50 426 2164
Dubai +971 4 453 9525 dubai@cavendishmaxwell.com 2204 Marina Plaza, Dubai Marina, P.O. Box 118624, Dubai, UAE Dubai
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Ajman
Ras Al Khaimah
Muscat
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