Hotel construction across the Middle East has seen a healthy growth over the first quarter, with construction pipeline soaring 5% by projects YOY to 612 projects/144,222 rooms, according to the latest report by Lodging Econometrics (LE).
Projects under construction also surged in Q1 2024, standing at 302 projects/80,589 rooms. Developments expected to begin construction in the next 12 months increased 28% by projects YOY and 24% by rooms YOY (totaling at 133 projects/30,447 rooms).
By the end of the first quarter, new project announcements across the Middle East stood at 44 projects/8,346 rooms, while new construction starts stand at 24 projects/5,733 rooms.
The leading Middle Eastern countries with the highest number of projects were:
- Saudi Arabia: 318 projects/75,761 rooms
- Egypt: 103 projects/24,731 rooms
- The U.A.E.: 89 projects/22,849 rooms
- Qatar: 32 projects/8,053 rooms
- Oman: 32 projects/5,939 rooms
Cities with the largest pipelines:
- Provincial region: 144 projects/30,266 rooms
- Riyadh: 93 projects/ 18,715 rooms
- Jeddah: 59 projects/12,262 rooms
- Cairo: 40 projects/8,760 rooms
- Doha: 29 projects/7,365 rooms
These five cities accounted for 60% of the projects and 54% of the rooms in the region’s total construction pipeline.
A total of 21 new hotels/3,663 rooms opened across the region in the first quarter, the LE report added. The rest of the year will see additional 86 hotels (representing 17,748 rooms) opening, with a total of 107 new hotels/26,743 rooms anticipated to open by the end of the year. By the end of 2025, another 101 hotels, accounting for 26,743 rooms, are projected to open across the Middle East.
HOTEL PERFORMANCE
Qatar’s hotel performance peaked during Eid al-Fitr in April, with occupancy jumping 62.6% (up 32.3%) YOY in April, according to data by CoStar. ADR and RevPAR increased by 4.4% and 38.1% YOY, respectively.
Ramadan and Eid al-Fitr also elevated occupancy and ADR levels in Dubai, CoStar data revealed. With leisure demand rebounding during Eid, occupancy saw a significant jump compared to the Ramadan period. Most countries in the region announced extended public and private sector holidays, which resulted in scattering tourism demand throughout the week of Eid and drive consistent performance over a longer time period.
Jeddah’s hotel performance was helped by the annual Saudi Arabian Grand Prix held between March 7 and 9, driving daily performance and daily rates, as per data from CoStar. On March 8, ADR touched SAR1,767.36 ($470.93), nearly double the monthly average, while RevPAR peaked at SAR1,618.28 ($431.2).