As seen in the Q3 2024 Middle East Hotel Construction Pipeline Trend Report from Lodging Econometrics (LE), the hotel construction pipeline in the region shows upward momentum, standing at 610 projects/149,686 rooms, up 4% by projects and 7% by rooms year-over-year (YOY).
At the close of the third quarter, projects currently under construction stand at 296 projects/79,978 rooms, accounting for 49% of the region’s total pipeline projects. Projects scheduled to start construction in the next 12 months saw significant growth, up 36% by projects and 51% by rooms YOY, to end the quarter at 140 projects/36,260 rooms. Projects in early planning reached 174 projects/33,448 rooms, showing increases of 7% by projects and 5% by rooms YOY. Brand conversions continue to show strength in the region, reaching record-highs of 47 projects and 10,390 rooms, and up 31% and 37% by rooms YOY, respectively.
The luxury, upper-upscale and upscale chain scales account for 78% of the total pipeline in the region and continue to dominate new hotel construction in the Middle East with 477 projects/119,063 rooms. Notably, the luxury chain scale saw considerable growth in the third quarter, reaching a new record-high project count and increasing 7% by projects and 21% by rooms YOY to 173 projects with 40,113 rooms.
Countries with the greatest number of projects in the construction pipeline are led by Saudi Arabia, which increased 15% by projects and 18% by rooms YOY and closed the quarter with 317 projects and a record-high 79,984 rooms. Egypt follows with 109 projects/26,286 rooms, reaching record-highs and increasing 20% by projects and 21% by rooms YOY. The United Arab Emirates (UAE) ranks third, with 86 projects/23,743 rooms, though showing decreases of 20% by projects and 13% by rooms YOY.
Cities with the largest number of construction projects at Q3 are led by Riyadh with 90 projects/18,067 rooms. Jeddah follows with 53 projects/11,336 rooms, then Cairo with 40 projects/8,905 rooms, showing significant YOY growth of 21% by projects and 16% by rooms.
Through the third quarter of 2024, the Middle East opened 51 new hotels accounting for 9,356 rooms, of which 14 new hotels/2,504 rooms opened in Q3. LE’s forecast for new hotel openings for Q4 2024 anticipates an additional 35 new hotels/6,916 rooms to open by year-end. Looking ahead, LE analysts project 107 new hotels/27,485 rooms to open in 2025, followed by 121 new hotels/25,030 rooms forecast to open in 2026.