WORLDWIDE Hotel development pipelines in most world regions are expected to be relatively stagnant over the next few years, with the notable exceptions of the BRIC countries. With the awarding of the 2022 FIFA World Cup to Qatar, however, long-term developer interest is picking up in the Middle East, as well.
The current Middle East and Africa hotel development pipeline comprises 437 hotels totaling 118,759 guestrooms, according to STR Global’s latest construction pipeline report. The United Arab Emirates and Saudi Arabia are seeing the majority of the region’s hotel pipeline overall, as well as in the construction phase. The UAE dominates the total active pipeline, with 49,382 guestrooms—of which almost half are in construction.
Qatar has 6,192 guestrooms in the pipeline, of which 4,927 are under construction. “With the interest building to the 2022 World Cup, we expect these numbers to increase over the coming years,” says Elizabeth Randall, managing director of STR Global. “Egypt, which has the third most rooms in the total active pipeline, is getting surpassed by Qatar and Jordan, which both have lesser rooms in the overall pipeline but more rooms under construction.”
Among the region’s countries, the UAE ended November with the largest number of rooms in the construction phase, at 24,251. Saudi Arabia followed with 6,344 in the construction phase. Along with Qatar, two other countries reported more than 3,000 guestrooms under construction: Jordan (4,006) and Egypt (3,800).
Asia Pacific second only to Mideast in supply growth
The Asia Pacific hotel development pipeline comprises 1,089 hotels totaling 268,821 guestrooms. At year end, supply growth for Asia Pacific will only be surpassed by supply growth in the Middle East and Africa, Randall says. “These two regions were the main focus of hotel development this year, as they were at the end of 2009. There is still great potential for branded supply in these emerging destinations, and with the strong economies in these markets, we expect 2011 to continue to be dominated by development in Asia Pacific and the Middle East/Africa,” she says.
Year-to-date 2010, 296 projects opened in Asia Pacific, totaling 57,495 guestrooms. There are 80 projects with 13,259 guestrooms in the region that are still expected to open in 2010. Looking ahead to 2011, there are 444 projects comprising 101,807 guestrooms expected to open, and in 2012, there are 350 projects with 99,781 guestrooms expected to open.
In 2011, the upper-upscale segment is expected to add the most inventory in Asia Pacific, with 26,306 guestrooms. The upscale segment is projected to open the most guestrooms (24,906) in 2012 among the chain scale segments.
Caribbean pipeline overwhelmingly quiet
The hotel development pipeline in the Caribbean and Mexico comprises 134 hotels totaling 18,725 guestrooms, according to the latest STR/McGraw Hill Construction Dodge Pipeline Report. Among the countries in the region, Haiti reported the largest expected growth (30%), if all 492 guestrooms in the total active pipeline open.
Other Carribean countries expecting strong growth include St. Kitts and Nevis (13% expected growth with 235 guestrooms) Anguilla (12% with 80 guestrooms), Turks & Caicos (12% with 370 guestrooms), Bahamas (11% with 1,854 guestrooms) and the Dominican Republic (11% with 78 guestrooms).
In Central and South America, the hotel development pipeline comprises 127 hotels totaling 20,175 guestrooms. The main development focus there is on upper-upscale and upscale projects, as companies bring premium brands into markets. The most projects in terms of number of rooms across Central and South America are in Brazil and Panama. Increased stabilization in Colombia has garnered the country more interest from the development community; it now has 1,996 guestrooms in the pipeline.
Europe pipeline increasingly focused on midscale
The hotel development pipeline in Europe comprises 732 hotels and 124,348 guestrooms. Upscale brands make up most of the pipeline (26,490 guestrooms), followed by independent hotels (24,348). “The luxury and economy scales, which usually receive most of the attention, currently have 12,137 and 15,539 rooms in the pipeline, respectively,” Randall says. “The midmarket is still getting a lot of attention by catering to the traveler who may not be able to afford the luxury end but would prefer more services and amenities.”
Among the chain scale segments in Europe, the upscale segment accounted for the largest portion of guestrooms in the total active pipeline, with 21.3% and 26,490 guestrooms. Two other segments each made up more than 15% of the Europe pipeline: the unaffiliated segment (19.6% with 24.348 guestrooms) and the upper-upscale segment (15.6% with 19,404 guestrooms).