The luxury hospitality sector in the UAE has witnessed a significant boost in profitability over the past 12 months, thanks to sustained high demand and strategic pricing, according to data from HotStats, a global firm specializing in hotel performance analytics.

Covering the period from March 2024 to February 2025, the report reveals that the UAE’s luxury hotels maintained a solid performance, reinforcing the country’s position as a leading global hub for upscale hospitality. The occupancy rate for luxury properties held steady at an impressive 85.5%, signaling a mature and stable market environment. This strong demand persists despite the entry of new high-end hotels into the market, reflecting the country’s continued appeal among both leisure and corporate travelers.

Room Revenue Up 4.3% Despite Competitive Market

The average daily room rate saw a year-over-year increase of around 9%, which directly contributed to a 4.3% rise in revenue per available room. These figures point to the effectiveness of pricing strategies and a steady appetite for premium experiences, particularly among affluent travelers.

HotStats emphasized that the improved profitability also reflects operational discipline, as gains in both total revenues and operating profits were achieved within a balanced performance framework. The firm noted that this balance—where strong demand is met with tight cost control—builds further confidence among hotel owners and operators focused on maximizing returns.

UAE Remains a Top Investment Destination for Luxury Hospitality

The report also highlights that these trends reaffirm the UAE’s enduring attractiveness for investors eyeing the luxury hotel segment. For stakeholders aiming to expand their brand footprints, reposition assets, or drive operational innovation, the fundamentals remain solid.

Moreover, the leisure tourism segment in the UAE is not just holding its ground but is steadily advancing. The broader hotel sector also recorded strong metrics, with the average gross operating profit per available room (GOPPAR) ranging between $147 and $153 during the same period, across various hotel categories.

GOPPAR remains a critical profitability metric in the hospitality sector, offering hotels a clear view of the relationship between revenue streams and operating costs. It also provides insights into how well hotels can convert revenues into profits under different strategies, whether focused on occupancy or average daily rates.

Record Year for UAE Tourism and Hospitality Sector

According to the UAE Ministry of Economy, 2024 was a landmark year for the country’s hospitality sector. Hotel guest numbers reached approximately 30.8 million, reflecting a robust 9.5% growth compared to 2023. This puts the country well ahead of its target, achieving 77% of the guest number goals set under the UAE National Tourism Strategy 2031—seven years ahead of schedule.

Hotel revenues climbed to AED 45 billion ($12.25 billion) in 2024, marking a 3% increase year over year. National hotel occupancy rates reached 78%, among the highest globally, driven by the opening of 16 new hotels across the seven emirates. By the end of 2024, the UAE was home to 1,251 hotels, offering a combined 216,966 rooms—up 3% from the previous year.