‘We’re not Monaco’: Why Dubai doesn’t need any more 5-star hotels
Dubai is pushing for more foreign direct investment but the last thing it needs is more luxury, high-end hotels, according to the chief executive of the country's investment development agency.

Fahad Al Gergawi, chief executive of the Dubai Investment Development Agency (Dubai FDI), told CNBC Tuesday that the emirate wants more accessible, smaller and low-key accommodation in order to attract a wider range of tourists.

The city state is well known for hosting the world's most luxurious hotels, including the distinctly-shaped Burj Al Arab Jumeirah (Dubai's only seven-star hotel) along with the Jumeirah Beach hotels, the Four Seasons Resort Dubai, Raffles Dubai and Kempinski Hotel Mall of the Emirates, to name just a few.

Even fashion houses have got in on the act with famous brands hosting luxury hotels, including Palazzo Versace Dubai, Gucci Hotel and Armani Hotel Dubai.

Needless to say, Dubai's tourism industry is booming and accounts for around 20 percent of the emirate's gross domestic product (GDP), according to the Dubai FDI.

Its stock of hotel rooms rose by 5 percent in 2016 to cross the 100,000 mark; while the year also marked the opening of more luxury hotels, Dubai is crying out for average hotels that can cater for 'normal' families, according to Al Gergawi.

"We're looking at tourism to be upgraded from where it is now, from 104,000 rooms to 245,000 rooms and that will increase the flow of visitors," Al Gergawi told CNBC. "Dubai ranked number five in terms of visitors' numbers at a city level globally, so there is room for development and focusing on families and three and four star hotels."

Calling Dubai a "tourism hub," Al Gergawi said the emirate wanted to attract more visitors, not only the "glitzy and glamorous but also families… who will tend to stay longer."

"The three and four-star focus is to give variety but also to reduce costs and overheads on investors and market rates. We have one of the highest occupation rates of almost 86 percent but we still think there is room to develop."

Asked whether there are too many high-end hotels, Al Gergawi said there had been "for a while, yes."

"Usually, you have the five-star hotels at the top of the pyramid but for a while we've had the pyramid upside down with a lot of five-star hotels. We're not saying we're stopping five-star (hotels) but we want to focus on three and four-star hotels that appeal to more market segments and families."