Boutique hotels could redefine Dubai's tourism experience

Khaleej Times

5 days ago

Dubai, a global tourism powerhouse known for its futuristic skyline and grand resorts, is entering a new phase in hospitality — one that could be defined not by scale, but by intimacy.
As the city continues to expand its hotel inventory, industry experts are calling for a greater emphasis on boutique hotels to complement its luxury infrastructure and meet shifting traveller preferences for more personal, experience-driven stays.
While Dubai currently boasts over 154,000 hotel rooms, with an additional 3,000 set to be added by the end of 2025, the majority of development continues to focus on large-scale luxury properties and serviced apartments. However, a growing segment of international travelers — particularly millennials, creatives, remote professionals, and high-net-worth individuals — are now seeking properties that offer character, connection, and authenticity over conventional opulence.
Boutique hotels, defined by their smaller scale, distinctive design, and high-touch service, are gaining global traction as travellers look for more than just a place to sleep. They seek spaces that reflect the local culture, create emotional engagement, and offer a curated lifestyle experience. This shift has accelerated in the post-pandemic world, where low-contact environments and personalised services have become essential.
Hospitality industry experts argue that boutique hotels may not match the skyline dominance of Dubai's mega-resorts, but their real impact ultimately lies elsewhere — in intimacy, culture, and storytelling. As global travelers seek deeper engagement, Dubai has a chance to lead not just in size, but in soul.
Globally, the boutique hotel segment was valued at $25 billion in 2023 and is projected to exceed $40.3 billion by 2030, growing at a compound annual growth rate of 7.1 per cent, according to Grand View Research. Leisure travelers accounted for over 70 per cent of boutique hotel guests in 2023, signaling an enduring demand for unique stays over standardised lodging.
In Dubai, where the tourism sector accounted for about 12 per cent of the emirate's GDP and continues to attract record-breaking visitor numbers, the potential for boutique hotels is significant. The city welcomed over 17 million international visitors in 2023, and with the government targeting 25 million by 2025, a broader mix of accommodation styles could help sustain its momentum.
Saad Audeh, chairman of Campbell Gray Hotels, believes the time is ripe for boutique properties to gain ground in Dubai. 'A boutique hotel may have fewer rooms, but it can still provide all the expected services — from room service and wellness spaces to concierge care and refined dining,' he said. 'The difference lies in the scale and intention behind the experience. The smaller the setting, the more personalised and emotionally resonant the service becomes.'
Campbell Gray, an international boutique hotel group, is among the hospitality players advocating for more human-scale developments in the Gulf. The company sees boutique hotels not only as a strategic response to evolving traveler expectations but also as a practical investment model for regional property owners. Existing villas, midscale buildings, or underutilised plots can be repurposed into high-value boutique assets at a lower cost than high-rise luxury towers.
Unlike large resorts, boutique hotels can be developed and launched faster, often from existing structures, and allow for greater operational flexibility and creative branding. They are particularly well-suited for emerging districts where space is limited or large-scale development is not feasible. In such areas, boutique hotels tend to achieve higher average daily rates (ADR) due to their uniqueness, personalised appeal, and experiential focus.
Simon Venison, director of development and operations at Campbell Gray, added that boutique properties are consistently outperforming traditional hotels in guest satisfaction and revenue generation. 'The industry is steadily shifting towards experience-first, emotionally intelligent travel,' he said. 'Guests no longer just want amenities — they want stories, memories, and authenticity. That's what boutique hospitality delivers.'
Dubai has already made strides in integrating boutique hospitality concepts in niche locations such as Hatta and Al Fahidi, but the presence of city-based boutique hotels remains limited. This gap represents a compelling opportunity. With Dubai's diversified tourism strategy, including its Virtual Working Programme to attract global talent and digital nomads, boutique hotels can serve as lifestyle hubs for long-stay guests who value individuality, wellness, and community engagement.
According to the Department of Economy and Tourism, around 70 per cent of new hotel supply in Dubai is aimed at the upscale and luxury segments. Adding boutique properties to the mix could diversify the city's offerings without cannibalising demand for established players. Instead, it would help position Dubai as a holistic destination catering to both conventional luxury and modern experiential travel.
For the wider GCC, where tourism is fast becoming a key pillar of economic diversification, the boutique model holds similar promise. In Saudi Arabia's Al Ula or Oman's mountainous retreats, smaller-scale luxury properties already attract attention from international travelers seeking immersion and authenticity. With the region expected to attract over $179 billion in international visitor spending and support more than 7.7 million tourism jobs, boutique hotels can play a catalytic role in deepening the region's appeal.