New report on EMEA pipeline

The second quarter 2011 EMEA pipeline report from Lodging Econometrics shows Europe’s development plateauing and the Middle East and Africa declining.

Europe’s total pipeline was 783 projects comprising 124,696 rooms at the end of the second quarter.

At 412 projects/71,276 rooms, 53% of Europe’s total projects are currently under construction, a high percentage not seen since the first quarter of 2009. As such, new hotel openings exiting the pipeline will remain elevated over the next two years, according to Lodging Econometrics.

In the Middle East, the total pipeline at the end of the second quarter stood at 428 projects comprising 117,916 rooms.

The sovereign debt crises in many countries and the attendant financing problems throughout the region caused a spate of project cancellations and continue to impede the migration of projects already in the pipeline toward construction and, ultimately, opening. There are prolonged delays for projects already under construction and scheduled to start construction in the next 12 months, with developers either unable to secure financing or simply not wanting to rush to completion in what has been a slow-to-recover operat­ing environment.

Saudi Arabia now has the largest pipeline in the region, surpassing both Dubai and Abu Dhabi this quarter, with 76 projects comprising 24,405 rooms. The Saudi Arabian pipeline has been trending upward for nine consecutive quarters and is up 49% by projects and 61% by rooms in just the last year alone. Quickly, the country’s pipeline has become the sixth largest in the world by room count and the 11th largest by project count. During the second quarter the pipeline surged further due to rapidly escalating activity in the holy city of Mecca. Riyadh, Jeddah, Medina, and Khobar are additional hotspots seeing rising interest from developers and franchise/management companies looking to expand the presence of their brands in the country, according to Lodging Econometrics.

At 175 projects comprising 33,165 rooms, Africa’s total pipeline declined modestly in the second quarter due to an increase in new openings.