UAE Leads Global Hospitality Growth with Increased Investment and Expanding Hotel Market, Get the Details Here

Published on December 18, 2025

The United Arab Emirates (UAE) is experiencing remarkable expansion in its hotel and tourism industry, with the overall hotel occupancy in the UAE rising to 79.3% in the first ten months of 2025. This reflects an improvement over the preceding year’s 78%, placing the UAE among the leading countries worldwide in terms of overall hotel occupancy. The reasons behind this remarkable expansion are attributed to this country’s strategic investment in tourism and aviation.

A Thriving Hospitality Market Driving Economic Growth

Tourism in the UAE has long been a major contributor to the country’s GDP, and 2025 has proven to be another year of robust performance. The sector accounted for 13% of the UAE’s GDP in 2024, totaling AED257.3 billion. With tourism continuing to grow, it is estimated that the sector will increase its contribution to 17% of the GDP over the next five years. This ambitious growth is fueled by substantial investments in both tourism infrastructure and the aviation sector, which are poised to support the increasing demand for travel to the UAE.

The UAE tourism sector also plays a significant role in job creation, with over 920,000 jobs directly tied to the industry. The country’s strategic focus on expanding its tourism infrastructure, coupled with the ongoing promotion of its attractions, has made it a key global player in both leisure and business tourism. These developments ensure that the UAE remains a top choice for international visitors, with the hospitality sector set to continue driving economic growth.

The Impact of the “World’s Coolest Winter” Campaign on Domestic Tourism

One of the key initiatives boosting domestic tourism in the UAE is the “World’s Coolest Winter” campaign, which is in its sixth edition this year. The theme for 2025—“Our Winter is Entrepreneurial”—aims to attract both domestic and international tourists while fostering entrepreneurship within the sector. Abdulla bin Touq Al Marri, UAE Minister of Economy and Tourism, emphasized that the campaign highlights the diverse winter offerings across the country, including luxury resorts, adventure tourism, and cultural experiences, making the UAE a year-round destination.

By focusing on promoting winter tourism, the campaign also seeks to diversify the visitor experience in the UAE, catering to those looking for a cooler getaway during the colder months. This initiative helps the UAE further solidify its position as a global tourism hub and promotes local businesses by encouraging entrepreneurial ventures in hospitality and tourism-related industries.

Strong Investment in UAE’s Hospitality Sector

The UAE is seeing consistent growth in tourism investments, which are crucial to supporting its hospitality sector. In 2024, the country invested AED32.2 billion in tourism-related projects, an increase from AED28.8 billion in 2023. Projections for 2025 suggest a continued upward trajectory, with investments expected to reach AED35.2 billion. This ongoing investment reflects a commitment to enhancing the country’s tourism infrastructure and services, ensuring that the UAE remains competitive on the global tourism stage.

The growing hotel market in the UAE is also attracting a diverse range of investors, both regional and international. The UAE’s strong growth fundamentals, supported by its economic vision, have made it a prime destination for institutional capital. This influx of investment is expected to continue, with the hospitality market growing and evolving to meet the increasing demands of both leisure and business travelers.

Expanding Hotel Infrastructure and Future Growth

Looking ahead, the UAE’s hospitality sector is on track for even further expansion. The country’s hotel room inventory is set to increase by 3% in 2025, with 217,853 hotel rooms expected by the end of the year. By 2030, the number of rooms is projected to reach 235,674 across 1,184 hotels. Much of this new supply will focus on the luxury and upscale segments, catering to the growing demand for high-end accommodations, which have become a hallmark of the UAE’s tourism appeal.

Dubai, with its world-renowned luxury hotels and resorts, is driving much of this growth. The city is expected to account for 55.9% of the UAE’s new hotel supply by 2025. As part of its D33 Economic Agenda and the 2040 Urban Masterplan, Dubai continues to attract global investments, ensuring it remains a top destination for high-end travelers. Abu Dhabi, Sharjah, and Ras Al Khaimah are also seeing significant hotel development, contributing to the overall growth of the UAE’s hospitality sector.

Performance Indicators: Record Revenue Growth Across the UAE

The UAE’s hotel industry has delivered another remarkable performance in 2025, marked by a steady increase in revenue per available room (RevPAR) and average daily rates (ADR). Nationwide, RevPAR and ADR grew by 11.9% year-on-year, reflecting a strong demand for hotel accommodations across the country.

Abu Dhabi led the way with a 24% increase in RevPAR and a 20.2% rise in ADR, while Dubai, the UAE’s largest hospitality market, saw RevPAR grow by 10.1%. Ras Al Khaimah also saw strong performance, with RevPAR increasing by 10%. These figures demonstrate the UAE’s strong position as a global luxury destination, with visitors eager to experience world-class service and hospitality.

The UAE’s Continued Leadership in Global Tourism

The UAE hotels industry is also recording remarkable growth, with high performance achieved in terms of hotels’ occupancy and revenue. The UAE is pouring a lot of funds into the development of its tourism infrastructure, attracting a considerable number of global investors. Through campaigns and efforts such as the “World’s Coolest Winter” and other huge investment initiatives undertaken in the hotels industry, the UAE is steadily positioning itself to be a more dominant force in the tourism industry.