In the Middle East, Hotel Construction Pipeline Remains Strong

PORTSMOUTH, NH—Analysts at Lodging Econometrics (LE) report that in the third quarter of 2019, the hotel construction pipeline in the Middle East stands at 625 projects/178,433 rooms. Pipeline project counts are up a slight 2% while room counts show a 1% decrease year-over-year (YOY). It is the seventh consecutive quarter of the total pipeline count exceeding 170,000 rooms.

Projects presently under construction are at 344 projects/112,601 rooms while projects scheduled to start construction in the next 12 months have 145 projects/33,031 rooms, the tenth quarter of exceeding 30,000 rooms. Projects in the early planning stage are at 136 projects/32,801 rooms, up 14% and 11% respectively, YOY.

New projects in the pipeline have slowed noticeably with only 27 projects/7,034 rooms announced in the third quarter, the lowest count since the third quarter of 2015.

LE forecasts that the Middle East is on track to open 93 new hotels with 22,247 rooms by the year’s end, surpassing the all-time high of 85 hotels/20,047 rooms set in 2018. New records are also likely to be set in both 2020 and 2021 as LE’s forecast for new hotel openings climbs to 112 hotels/35,216 rooms and 139 hotels/36,609 rooms, respectively.

Countries in the Middle East with the greatest number of projects in the construction pipeline are Saudi Arabia with a record high 218 projects and 73,599 rooms and the United Arab Emirates with 211 projects/60,452 rooms. Egypt follows with 57 projects/14,585 rooms and Qatar with 56 projects/13,587 rooms.

Continuing to dominate the construction pipeline in the U.A.E. and throughout the region is Dubai with 168 projects/50,152 rooms. Other notable but distantly following emirate countries are Abu Dhabi with 16 projects/3,938 rooms and Ras al Khaimah with 15 projects/4,351 rooms.

Cities with the largest hotel construction pipelines are Saudi Arabia’s Provincial region with 68 projects/13,809 rooms, Riyadh with an all-time high of 61 projects with 11,709 rooms, and Jeddah with 52 projects/11,226 rooms. Doha, Qatar with 50 projects/11,466 rooms and Saudi Arabia’s Makkah with 37 projects/36,855 rooms follow. Four of the Middle East cities with the largest pipelines are in Saudi Arabia and account for 48% of the rooms in the total pipeline.

Hilton Worldwide is the top franchise company in the Middle East with the largest construction pipeline standing at 95 projects/25,664 rooms. Next is Marriott International with 93 projects/20,726 rooms. AccorHotels follow with 92 projects/25,011 rooms. InterContinental Hotels Group (IHG) recorded a new all-time high this quarter with 41 projects/15,066 rooms.

The leading pipeline brands for these franchise companies are Hilton’s DoubleTree with 28 projects/6,580 rooms, Hilton Hotel & Resort at 22 projects/6,959 rooms and Hilton Garden Inn at an all-time high with 21 projects/6,406 rooms; Marriott’s Courtyard with 21 projects/4,459 rooms and Residence Inn with 16 projects/1,877 rooms, both are at record highs; AccorHotels’ Ibis brands standing at 15 projects/5,113 rooms and Novotel with 14 projects/4,596 rooms; and IHG’s Holiday Inn with a record 12 projects/3,548 rooms and the InterContinental Hotel brand with eight projects/1,809 rooms.