The number of hotel rooms in Dubai is set to increase by about 7 per cent over the coming two years to more than 62,000 - making it the third-biggest market in Europe, the Middle East and Africa.
According to the property consultants Jones Lang LaSalle, the number of hotel rooms in the city is on course to increase from about 58,000 at the end of last year.
According to the research, handed out to investors at a client briefing on the sidelines of the Arabian Hotel Investment Conference yesterday, Dubai is now the third-biggest hotels market in the Europe, Middle East and Africa region - ahead of both Berlin and Madrid.
It is behind London, which is set to increase its stock of about 115,000 rooms to 122,000 by the end of next year, and Paris, which will slightly increase its inventory to more than 80,000 rooms.
Abu Dhabi plans to increase the number of its hotel rooms to more than 20,000 over the coming two years - overtaking Moscow, Budapest and Florence in terms of hotel room numbers.
And Doha will increase its hotel room inventory to more than 10,000 rooms, overtaking the number of rooms in Warsaw, Oslo and Zurich.
The property consultant CBRE predicted that the total number of hotel rooms in the UAE is to increase to 125,000 from 95,000 over the next five years.
"Although the region's sizeable hotel development pipeline should be monitored with some caution, the short-term outlook for the sector looks to be positive with most key local markets recording growth during the first quarter," said the company's head of research for the UAE, Matthew Green.
Jones Lang LaSalle also found that the city's booming tourism market had prompted hotel investors to spend more than Dh1 billion on buying up Dubai hotels over the past year.
It said that investors from Saudi Arabia, Bahrain, Kuwait and Syria bought six hotels in the city over the past year, driving down yields for smaller hotels to about 8 per cent and those for larger hotels to about 7.5 per cent.
"Generally across the board there has been a growth in investment activity across the Middle East," said Gaurav Shivpuri, the head of capital markets for the Middle East and North Africa at the company.
"It is partly because Dubai's tourism market is booming, but also for many of these investors it's due to a lack of investment opportunities at home and for investors in Syria and Bahrain they want to get their money out," Mr Shivpuri added.
