Published on and written by Cyril Jarnias
Hotel Acquisition in Dubai: A Golden Opportunity
Acquiring a hotel in Dubai, a true international hub, represents a golden opportunity for investors seeking to establish themselves in a premier destination. However, this seemingly attractive process requires meticulous planning and a deep understanding of local dynamics.
This guide aims to provide you with a comprehensive checklist, covering every essential aspect from regulations and selecting the optimal location to analyzing the rapidly expanding hotel market. Armed with this crucial information, you can confidently navigate Dubai’s competitive hospitality world and secure a profitable and sustainable investment in one of the world’s most dynamic markets.
Dubai Hotel Market Overview
Dubai’s hotel sector is experiencing remarkable growth, driven by the city’s ambition to become the world’s most visited tourist destination by 2025. This strategic vision is supported by ambitious goals to attract between 23 and 25 million annual visitors by this deadline.
Economic recovery and the launch of major projects in Dubai paved the way for strong tourism growth starting in 2022, placing the emirate on track for its long-term objectives. This momentum was confirmed when Dubai was named the world’s most visited destination, topping the Tripadvisor Travelers’ Choice Best of the Best Destination 2023 rankings.
Tourism holds a central place in Dubai’s economic development strategy, particularly within the D33 Economic Plan. Its contribution to GDP reached 10.14% in the first half of 2023, demonstrating its crucial importance to the local economy.
The United Arab Emirates’ hotel market as a whole is projected to experience significant expansion, growing from $7,371.2 million in 2023 to $9,459.8 million by 2028. This growth is supported by the Emirates’ ongoing commitment to innovation and tourism development.
| Year | Dubai Visitor Target |
| 2022 | 21-23 million |
| 2025 | 23-25 million |
The “Tourism Strategy for Dubai,” approved by the Executive Council, relies on a large-scale marketing strategy aimed at consolidating the tourism sector’s contribution to the emirate’s economy. This ambition follows the previous goal of welcoming 20 million annual tourists by 2020, the year of the World Expo.
A recent STR study, conducted for the Arabian Travel Market (ATM), confirms the strong growth of the regional hotel sector, placing Dubai at the center of this positive dynamic.
For investors interested in Dubai’s hotel market, the prospects are promising, driven by the goal of attracting 25 million visitors by 2025, which will position the city as one of the world’s most visited destinations and one of the top international tourism markets.
Dubai’s hotel sector continues to develop and diversify to meet growing demand, offering investment opportunities across different market segments, from luxury to economy, while adapting to new trends and the expectations of international travelers.
Good to Know:
Dubai’s hotel market is an expanding sector, fueled by continuous tourism growth that has seen a significant increase in international arrivals in recent years. In 2022, hotel occupancy rates reached approximately 75%, reflecting strong demand despite a growing supply. The year 2023 saw the opening of many new establishments, particularly in the luxury and mid-range segments, supported by major players like Jumeirah Group and Emaar Hospitality Group. However, economy hotels are also gaining popularity to meet the diverse needs of travelers. While the market presents excellent opportunities due to its dynamism and influx of tourists, investors must be aware of challenges such as increased competition and the need to comply with strict local regulations. To succeed, it is crucial to focus on strategic locations and offer innovative services that stand out in this competitive market.
Essential Steps for Acquiring a Hotel in Dubai
Legal and Administrative Requirements
To acquire a hotel in Dubai, it is imperative to comply with several legal and administrative requirements:
- Obtain a commercial license issued by the Department of Economy and Tourism (DET).
- Secure the specific hotel license, essential for legally operating any accommodation establishment.
- Receive additional approvals from local authorities: Dubai Municipality, Civil Defense (for fire safety), and the Department of Tourism and Commerce Marketing (DTCM).
- Understand foreign ownership legislation: in certain free zones or designated areas, foreigners can acquire full ownership; elsewhere, only a long-term lease can be offered.
- It is highly recommended to collaborate with a specialized consultant to ensure regulatory compliance and speed in obtaining authorizations.
Comprehensive Evaluation of the Targeted Hotel
Before any acquisition or takeover, an in-depth analysis is necessary:
List of key points to check:
- Detailed financial statements for several fiscal years
- Overall physical condition: infrastructure, technical equipment, compliance with local standards
- Reputation in the local market: online customer reviews, ranking with tourism agencies
- Potential for improvement or risks related to the sector
Summary table:
| Element Evaluated | Criteria |
|---|---|
| Finances | Net Profitability / Debt / Cash Flow |
| Building | Safety Standards / Modernity / Maintenance |
| Market | Occupancy Rate / Positioning |
| Reputation | TripAdvisor & Booking.com Ratings |
Negotiating the Agreement Terms
Negotiation should be conducted with the joint support of:
- A lawyer specialized in Dubai real estate/hotel law
- An accountant familiar with the sector
Essential points during this stage:
- Final price considering the audits conducted
- Specific terms related to the transfer of existing staff
- Contingent conditions linked to final regulatory approvals
Operational Transition Planning
Proper preparation ensures a smooth continuity:
List of recommended actions:
- Anticipate the transfer/recruitment/training of key staff
- Quickly implement a quality audit on customer standards
- Define and then launch a targeted marketing plan (digital/local) to strengthen visibility and occupancy rates immediately after takeover
Priority initiatives after acquisition:
- Immediate update of the website/digital presence
- Targeted promotional campaigns according to local seasonality
- Strengthening or relaunching partnerships with OTAs/travel agencies
Available Financing and Partnership/Investment Options
The Dubai hotel market often requires high initial capital. Several solutions are possible:
Comparative table – Financial Solutions:
| Solution | Required Contribution | Advantages |
|---|---|---|
| Bank loan/mortgage | 20–50% minimum | Staggered repayment |
| Private investors | Variable | Flexibility & risk sharing |
| Commercial partnership | According to agreement | Access to network & expertise |
Local specifics:
- Banks typically require an initial contribution of 20% (non-residents) to 50%.
- Competitive mortgage rates are accessible to international investors.
- Profitability heavily depends on geographic and qualitative positioning.
Professional support from the beginning not only ensures rapid compliance but also optimal valuation when entering this dynamic market.
Good to Know:
To acquire a hotel in Dubai, start by familiarizing yourself with the legal requirements, such as obtaining hotel licenses and understanding foreign ownership laws that may affect your acquisition. Thoroughly evaluate the establishment by examining its financial statements, physical condition, and reputation in the sector before any commitment. Engaging a specialized lawyer and financial advisor is crucial to effectively negotiate the purchase terms and ensure a fully compliant transaction. Plan a smooth transition by developing strategies to manage existing staff, improve the customer experience, and implement compelling marketing campaigns to increase the hotel’s renown. Finally, explore available financing and consider partnerships or investments specific to Dubai’s dynamic hotel market, which might include government support or associations with local investors.
Tips for Conducting Successful Due Diligence in Dubai’s Hospitality Sector
Understanding the local hotel market in Dubai is essential before any acquisition or investment project. Dubai, a true regional capital of hotel innovation, stands out with strong trends: rise of luxury, increasing integration of smart technologies in establishments, development of wellness tourism, and widespread adoption of eco-friendly practices. Professional trade shows such as The Hotel Show Dubai reveal the latest developments each year and help anticipate the changing expectations of travelers.
It is crucial to identify Dubai’s peak tourist seasons to adjust revenue forecasts and pricing policy. The city traditionally experiences a peak between November and March thanks to its pleasant climate and numerous international events attracting a demanding international clientele.
Legal and tax assessment occupies a central place in the process: it is essential to meticulously study local regulations related to the hotel sector (permits, specific licenses for tourism activities), as well as the applicable tax regime (VAT on accommodation, municipal taxes on overnight stays). Local regulations can evolve rapidly under the impetus of government initiatives aimed at strengthening the sector’s competitiveness.
Essential Points to Check During the Preliminary Study
- General condition of facilities: obsolescence or compliance with current standards.
- Online reputation: in-depth analysis of recent customer reviews.
- Customer loyalty: repeat rate of business/leisure clientele.
- Competitive positioning relative to the targeted segment (luxury/mid-range).
- Compliance with legal obligations specific to the local hotel sector.
A rigorous analysis of historical financial statements (balance sheet, income statement) as well as projected revenue allows for assessing potential profitability. This includes examining:
| Indicator | Importance |
|---|---|
| RevPAR | Key measure to compare performance/profitability |
| Occupancy Rate | Indicates seasonal attractiveness |
| EBITDA | Provides a clear view of operational result |
| Net Cash Flow | Guarantees ability to meet commitments |
Recommendations for Securing Your Investment
- Consult a lawyer specialized in Emirati real estate/commercial law.
- Engage a financial advisor familiar with the local hotel market.
- Hire an independent technical expert to meticulously inspect the physical condition.
Mastering the local economic context, the specific regulatory framework, and a fine qualitative and quantitative analysis are indispensable to guarantee economic viability in any hotel purchase in Dubai.
Good to Know:
To successfully conduct due diligence in Dubai’s hospitality sector, it is crucial to understand the local market well, particularly tourist trends and peak seasons that influence occupancy and rates. Ensure you analyze the legal and tax aspects specific to the sector, as local regulations can have a major impact on the establishment’s operations. Check the condition of the facilities, the hotel’s reputation, and customer loyalty, as these are determining factors for ensuring investment profitability. Detailed analysis of financial statements and revenue forecasts is essential for assessing the economic viability of the purchase. It is also advisable to consult local experts such as lawyers and financial advisors specialized in Dubai’s hospitality sector to obtain personalized advice and minimize potential risks.
Analysis of Tourism Statistics and Their Impact on Hotel Investment
In 2024, Dubai welcomed a record 18.72 million international visitors, showing 9% growth compared to the previous year. This dynamic continues in 2025 with an additional +7% increase in arrivals during the first four months of the year. Business and leisure tourism thus benefit from increased attractiveness supported by global promotional campaigns, continuous infrastructure development, and the diversification of source markets.
Seasonal Trends and Evolution of Tourist Profile
Tourist flows in Dubai show strong seasonality: the high season generally extends from October to April thanks to the temperate climate and concentration of major events (Dubai Shopping Festival, GITEX Global). During these periods, hotel occupancy rates reach their peaks.
The main nationalities represented among visitors are:
- Western Europeans: 20% of the total in 2024 (+14%)
- Northeast/Southeast Asians: strongest progression with +24%
- Africans: +20%
- CIS/Eastern Europeans: +16%
The demographic profile is trending towards gradual rejuvenation; Dubai particularly attracts millennials and young families seeking high-end or innovative experiences. The business clientele also remains a key pillar.
| Region/Market | Share in 2024 | Growth (%) |
|---|---|---|
| Western Europe | 20% | +14 |
| Asia NE/SE | N/A | +24 |
| Africa | N/A | +20 |
| CIS/Eastern Europe | N/A | +16 |
Hotel Growth: Opportunities for Investment
Hotel demand follows the upward curve of international tourism:
- Occupancy rates remain high across all segments (luxury/mid-range/budget), boosted during major events.
- The constant expansion of the hotel supply meets the diversification of client profiles (families, solo digital nomad travelers…).
The projected growth suggests a dynamic continuation until 2030 thanks to the objectives set by the Dubai Economic Agenda D33 — aiming notably to position Dubai as the world’s top destination for business & leisure.
Stimulating Government Policies
Several structuring initiatives reinforce this trajectory:
- Major expansion of Al Maktoum Airport
- Continuous metro extension
- Strategies targeting new markets via international campaigns
These public investments not only improve logistical capacity but also urban/intercontinental connectivity essential to support the growing volume of travelers. Public-private partnerships further accelerate this development within a regulatory framework favorable to foreign investors.
Challenges & Opportunities Related to Hotel Purchase in This Context
Opportunities:
- Resilient market driven by record international attendance
- Growing diversification of demand (leisure/business/families/digital nomads)
- Strong support via ambitious public policies
Challenges:
- Intense competition between existing establishments & new entrants
- Increased sensitivity to global economic cycles or regional geopolitics
- Pressure on qualified recruitment due to the high pace of openings
The rapid but controlled evolution of tourism statistics thus reveals a competitive hotel market offering significant potential – provided that any foreign or local investor precisely analyzes location, product/service positioning, and the ability to quickly adapt to international trends.
Good to Know:
Recent tourism statistics in Dubai show continuous growth with a notable increase in visitors from Asia and Europe, influenced by seasonality with peaks during winter. Travelers aged 25 to 45 represent the majority, impacting demand for modern hotel experiences. The tourism growth rate, supported by government policies such as the long-term tourist visa and major investments in infrastructure, energizes the hotel market with rising demand for mid-range and high-end hotels. However, the market is competitive with challenges like adapting to changing tourist preferences and the diversity of offerings. Investors must therefore carefully analyze these trends and the impact of policy initiatives to identify strategic acquisition opportunities in this rapidly evolving market while considering potential risks related to overcapacity and global economic fluctuations.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
