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Saudi Arabia and UAE Lead the Middle East Hotel Construction Pipeline

According to the Q3 2021 Middle East Construction Pipeline Trend Report from Lodging Econometrics (LE), at the end of the third quarter (Q3), the hotel construction pipeline in the region stands at 545 projects/168,042 rooms. While the number of total pipeline projects has increased over the previous quarter, project counts are down six percent and room counts are down 19 percent year-over-year (YOY).

Projects presently under construction stand at 350 projects/108,244 rooms, down slightly by three percent by projects and eight percent by rooms YOY. Projects scheduled to start construction in the next 12 months are down eight percent by projects and 10 percent by rooms YOY to end the third quarter at 78 projects/18,682 rooms. Projects in the early planning stage are at 117 projects/26,299 rooms.

Approximately 18 months after the onset of the COVID-19 pandemic and the resulting halt to international travel and tourism, the Middle East’s hospitality industry has been slow to recover. While the region’s road to recovery thus far has been longer than originally expected, recent statistics suggest there is a brighter future ahead. A rise in tourism from neighbouring countries, over recent months, has provided a much needed boost to the region’s travel and tourism sector. This upward trend is expected to continue into 2022, and as more countries open borders to foreign travellers.

Middle Eastern countries with the greatest number of projects in the construction pipeline are Saudi Arabia, with 194 projects/66,885 rooms, and the UAE, with 146 projects/40,846 rooms. Egypt follows with 67 projects/15,892 rooms, then Qatar with 62 projects/14,859 rooms. Continuing to lead the construction pipeline in the U.A.E. is Dubai, with 111 projects/32,369 rooms.

Cities with the largest hotel construction pipelines at the end of Q3 of this year are the Provincial region with 65 projects/13,073 rooms, Riyadh with 52 projects/11,005 rooms, Doha, Qatar reached a cyclical peak with 51 projects/12,282 rooms, Jeddah with 44 projects/8,974 rooms, and Makkah with 33 projects/33,833 rooms. 44 percent of the projects in the construction pipeline in the Middle East are found within these five cities.

At the end of the third quarter, 47 percent of the projects in the pipeline in the Middle East belong to three leading franchise companies. Hilton Worldwide with 95 projects/24,963 rooms, followed by Accor with 90 projects having 26,052 rooms. Next is Marriott International with 73 projects/21,770 rooms.