I often hear people ask, is Dubai building too many hotels?
It’s a sensible question for a city that just a few years ago had an oversupply problem so bad that the government created a commission to manage it and basically ordered builders to stop building.
But look at how Dubai’s hotel business is doing: many cities would like to have their hotel rooms as full. Dubai welcomed more than 11 million overnight visitors this year through August, with average occupancy at 75.5%, according to the Dubai tourism department.
Some of the latest figures from CoStar show that even as thousands of more hotel rooms are being built, the number of people who want to book them is growing faster. The number of hotel rooms in Dubai is up 27% compared with 2019, but the demand for those rooms is up 33%. In Riyadh, the numbers are even more stark: supply is up 20% and demand is up 32%.
All that supply, however, is part of the reason why room rates are falling—down 6% year over year in Dubai.
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