August 29, 2023 – PORTSMOUTH, NH
In the recent Middle East Hotel Construction Pipeline Trend Report from Lodging Econometrics (LE), the region continues to show steady pipeline growth in the second quarter of 2023, with the highest project count since Q1 2020. The total pipeline stands at 597 projects/146,521 rooms, up 10% and 5%, respectively, year-over-year (YOY).
At the close of the second quarter, projects under construction stand at 330 projects/90,619 rooms. Projects scheduled to start construction in the next 12 months increased 17% by projects YOY to 102 projects with 23,909 rooms. Projects in the early planning stage increased 31% YOY, reaching their highest levels since 2008, to stand at 165 projects/31,993 rooms.
Middle East countries with the greatest number of projects in the construction pipeline at the Q2 close are led by Saudi Arabia, with an all-time high of 276 projects and 72,144 rooms. Next is the United Arab Emirates (UAE) with 106 projects/27,921 rooms, then Egypt with 91 projects/20,814 rooms, Qatar with 43 projects/10,267 rooms, and Oman with 33 projects/6,792 rooms. Ninety-two percent of the hotel projects in the Middle East’s current pipeline are located within these five countries.
Dubai’s construction pipeline consists of a significant portion of the projects in the UAE’s total pipeline with 67 projects/19,200 rooms. Other notable, yet distantly following, Emirate countries are Ras al Khaimah with 15 projects/4,464 rooms and Sharjah with 13 projects/1,766 rooms.
Three of the top five cities with the largest pipelines are located in Saudi Arabia and comprise 42% of the projects and 36% of the rooms in the total Middle East construction pipeline. These cities leading in project counts at Q2 are the Provincial region with 113 projects/25,312 rooms, Riyadh with a record-high 86 projects, accounting for 16,618 rooms, and Jeddah with 50 projects/10,995 rooms. Following are Doha, Qatar with 38 projects/9,383 rooms, and Cairo, Egypt with 32 projects/7,287 rooms.
Companies with the largest construction pipelines in the Middle East at the close of the second quarter are Hilton Worldwide hitting record project counts of 104 projects/25,785 rooms, Accor with 79 projects/17,798 rooms, Marriott International with 78 projects/23,534 rooms, IHG Hotels & Resorts with 55 projects/12,974 rooms, and Radisson Hotel Group with 23 projects/4,686 rooms. The five companies combined account for 57% of the projects in the region’s total pipeline.
The largest brands in the pipeline for these leading hotel companies at Q2 are the Doubletree by Hilton brand with a record 29 projects with 6,418 rooms, next is Accor’s Novotel brand with 11 projects/2,351 rooms, then Marriott’s Courtyard brand with 14 projects/3,735 rooms. Following are IHG Hotels & Resorts’ InterContinental brand with 13 projects/3,546 rooms and Radisson’s Blu brand with 9 projects/1,585 rooms.
The Middle East opened 16 new hotels/3,892 rooms in the first half of 2023 with another 93 new hotels/21,306 rooms scheduled to open by year-end. In 2024, LE analysts forecast new hotel openings to rise to 113 projects/28,857 rooms, and by year-end 2025, 97 projects/18,914 rooms are expected to open.
