Middle East Hotel Construction Pipeline Shows Decline in Q2

PORTSMOUTH, NH—According to the latest published Construction Pipeline Trend Report for the Middle East, analysts at Lodging Econometrics (LE) state at the end of the second quarter of 2020, the hotel construction pipeline in the Middle East decelerated once again to 591 projects/169,538 rooms. The Middle East’s pipeline is down 7% by projects and 6% by rooms year-over-year (YOY). This is the fourth consecutive quarter the pipeline has declined since reaching its cyclical peak by projects in Q2 2019.

However, projects currently under construction stand at an all-time high of 363 projects/117,458 rooms. Projects scheduled to start construction in the next 12 months are down 31% by projects and 34% by rooms YOY to end the second quarter at 109 projects/25,658 rooms. Projects in the early planning stage are at 119 projects/26,422 rooms. Additionally, in the second quarter, the Middle East opened only seven new hotels accounting for 1,469 rooms.

Countries with the most projects in the construction pipeline are Saudi Arabia with 210 projects/69,610 rooms and the United Arab Emirates with 186 projects/55,797 rooms. Following distantly is Egypt with a record 60 projects/14,641 rooms, then Qatar with 57 projects and an all-time high room count of 14,538, and Oman with 36 projects/6,967 rooms. Dubai continues to lead the construction pipeline in the United Arab Emirates with 144 projects/44,895 rooms.

Cities with the largest hotel construction pipelines are the Provincial region with 67 projects/14,104 rooms; Riyadh, at record high totals, with 62 projects/12,414 rooms; Doha, Qatar, with 50 projects/12,234 rooms; Jeddah with 50 projects/10,705 rooms; and Makkah with 31 projects/32,387 rooms. Some 44% of the projects in the construction pipeline in the Middle East are found within these five cities.

Leading franchise companies for the Middle East at the end of the second quarter include Hilton, topping the company charts and recording a project high with 96 projects/26,188 rooms, followed by Marriott International with 88 projects/21,875 rooms. Next is Accor with 84 projects/25,277 rooms. These three companies alone account for 45% of the projects in the pipeline in the Middle East.

The leading brands in the pipeline for these companies are Hilton’s DoubleTree with 26 projects/6,355 rooms, and Hilton Hotels & Resorts with 22 projects/7,070 rooms; Marriott’s Courtyard with 21 projects/4,382 rooms and Residence Inn with an all-time high by projects of 17 accounting for 2,057 rooms. Accor’s top brands are the Ibis brands with 13 projects/4,474 rooms, Adagio City Aparthotel with 11 projects/2,288 rooms, and Novotel with 11 projects/2,857 rooms.