STR Middle East - Market Snapshot 2022/2023
Supply growth has been the name of the game for the Middle East hospitality industry, and 2023 is expected to be no different. Ambitious plans to bolster both tourism and corporate travel across the region have led to significant development efforts from major Western hotel brands. The “Big 6” hotel companies account for nearly half of the new rooms presently under construction across the Middle East, while independently owned properties account for less than one-third of the 93,000 rooms in development. When looking at countries around the world with at least 10,000 room openings scheduled for 2023, Qatar leads in projected supply growth at 29%. Saudi Arabia (+15.3%) and United Arab Emirates (+9.8%), are third and fourth on that list, respectively.
Historically high supply growth can constrain gains in both occupancy and average daily rate (ADR), but in 2022, mega events across the region as well as the continued post-COVID travel rebound helped limit the new supply impact on market performance.
The second half of the delayed EXPO 2020 in the first quarter of 2022 spotlighted popular leisure destination Dubai even as the Omicron variant surged. The market’s hotels held rates well above pre-pandemic levels throughout the year even as new rooms came online. Doha experienced a similar phenomenon during the 2022 FIFA World Cup, as both official FIFA demand and ticket holding fans flocked to Qatar’s capital.
The Hotel Yearbook 2023 - Annual Edition
As we have embarked on 2023, it is evident that the hotel industry has made a robust recovery from the
pandemic.
Occupancy and pricing have returned to their pre-pandemic levels. However, the future of our
industry is contingent
on how nimble the hospitality sector can be in adapting to ongoing innovation, changing market
conditions, evolving
consumer preferences, new staffing challenges, and sustainability realities. These uncertainties are
the new normal
in an unpredictable world.