LE: Middle East leads global hotel construction pipeline, touches new record in Q3 2023

The Middle East continues to have the largest hotel construction projects in the region globally, with most of these developments belonging to the high-end chain scales, a recent report has revealed.

Around 82% of the region’s projects ranged in the luxury, upper upscale and upscale chain scales, according to a recent study by Lodging Econometrics (LE). The total luxury hotel construction projects in the Middle East jumped 26% YOY to stand at a record 156 projects, totaling 33,346 rooms at the end of the third quarter of 2023.

Upper upscale projects and room counts also touched new highs of 160 projects/40,789 rooms, up 22% increase in projects YOY. Upscale hotel construction projects ended at 163 projects/41,339 rooms, the report said.

Dubai continues to dominate the construction pipeline in the U.A.E. at the end of Q3 2023.

At the end of Q3 2023, the total hotel construction across the Middle East stood at 585 projects/139,582 rooms. Project counts improved by 9%, while room counts were up 3% YOY.

Projects under construction totaled 320 projects/83,760 rooms, while projects anticipated to start construction in the next 12 months totaled 103 projects/24,041 rooms, rising 18% by projects and 11% by rooms YOY. Projects in the early planning stage stood at 162 projects/31,781 rooms, up 27% and 22%, respectively, YOY.

Top five countries with the largest projects in the construction pipeline:

  • Saudi Arabia — 275 projects/67,614 rooms
  • A.E. — 107 projects/27,276 rooms
  • Egypt — 91 projects/21,788 rooms
  • Qatar — 35 projects/8,526 rooms
  • Oman — 33 projects/6,598 rooms

With 66 projects/18,787 rooms, Dubai continues to dominate the construction pipeline in the U.A.E.

Cities with the highest hotel construction:

  • Saudi Arabia’s Provincial region — 115 projects/25,333 rooms
  • Riyadh — 87 projects with 16,498 rooms
  • Jeddah — 51 projects/11,144 rooms
  • Cairo — 33 projects/7,690 rooms
  • Doha — 31 projects/7,690 rooms

Around 54% of the projects in the construction pipeline in the Middle East were found in these five cities.

A total of 22 new hotels, representing 6,173 rooms, opened across the Middle East in the third quarter. The region is projected to see 64 new hotels opening by the end of the year, accounting for 15,193 rooms, according to LE’s analysis. In 2024, new openings are projected to increase to 110 hotels/25,644 rooms and 112 new hotels/23,346 rooms in 2025.