Hotel construction in the Middle East has improved in the first quarter, driven mainly due to the significant demand for lodging options due to several major cultural, sporting and religious events in the region.
Hotel construction pipeline in the Middle East improved to 581 projects/147,356 rooms, rising 8% by projects and 6% by rooms YOY, according to the Q1 2023 Construction Pipeline Trend Report for the Middle East from Lodging Econometrics (LE).
This growth is projected to continue as developers are encouraged by the robust performance figures recorded so far. New project announcements in the region increased to 51 projects/9033 rooms. Construction starts in the first quarter increased to 37 projects/11,844 rooms, reflecting developer enthusiasm in the region.
By the end of Q1 2023, there were 327 projects/93,217 rooms under construction, down by just 1% by projects YOY and up 2% by rooms YOY. Projects expected to begin construction in the next 12 months jumped 33% by projects YOY to total 104 projects/24,483 rooms.
Projects in the early planning stage hit a record high with 150 projects/29,656 rooms, up 18% and 17% YOY, respectively.
In the first quarter, eight hotels totaling 2,110 rooms opened in the region. According to LE forecasts, 133 new hotel projects representing 31,573 rooms are expected to open this year and an additional 123 hotels/30,430 rooms are scheduled to open in 2024.
Countries with the highest projects in the construction pipeline:
- Saudi Arabia — 260 projects/70,069 rooms
- The UAE — 108 projects/28,973 rooms
- Egypt — 92 projects/ 22,894 rooms
- Qatar — 46 projects/10,921 rooms
- Oman — 30 projects/6,133 rooms
Dubai continues to lead the construction pipeline in the UAE with 68 projects/20,647 rooms.
Cities with the highest projects in the construction pipeline:
- Riyadh — 84 projects/16,756 rooms
- Jeddah — 47 projects/10,395 rooms
- Doha — 41 projects/10,037 rooms
- Cairo — 32 projects/6,782 rooms
About 52% of the projects and 46% of the rooms in the region’s total construction pipeline were located in these five cities.
Franchise companies with the highest projects in the construction pipeline:
- Hilton — 99 projects/ 24,736 rooms
- Accor — 76 projects/19,750 rooms
- Marriott International — 78 projects/23,232 rooms
- IHG — 64 projects/14,833 rooms
- Radisson Hotel Group — 20 projects/3,941 rooms
A total of 58% of projects and 59% of the rooms pipeline belonged to these five companies.
Brands with the highest pipeline:
- Hilton’s Doubletree — 28 projects/6,152 rooms
- Accor’s Novotel — 9 projects/2,346 rooms
- Marriott’s Courtyard — 14 projects/3,735 rooms
- IHG’s InterContinental — 16 projects and 4,266 rooms
- Radisson’s Blu — 8 projects/1,475 rooms