Industry Update
Press Release23 November 2020

The Middle East Hotel Construction Pipeline Continues to Decline

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Lodging Econometrics

According to the latest published Construction Pipeline Trend Report for the Middle East, analysts at Lodging Econometrics (LE) state at the end of the third quarter of 2020, the hotel construction pipeline in the Middle East declined again to 579 projects/168,042 rooms. The Middle East's pipeline is down 7% by projects and 6% by rooms year-over-year (YOY). This is the fifth consecutive quarter the pipeline has declined since reaching its cyclical peak by projects in Q2 2019.

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Projects currently under construction stand at 359 projects/117,274 rooms, down slightly from the peak projects and rooms count set in Q2 '20. Projects scheduled to start construction in the next 12 months are down 41% by projects and 37% by rooms YOY to end the third quarter at 85 projects/20,753 rooms. Projects in the early planning stage are at 135 projects/30,015 rooms. Additionally, in the third quarter, the Middle East opened only 10 new hotels accounting for 1,779 rooms.

Countries with the most projects in the construction pipeline are Saudi Arabia with 204 projects/69,743 rooms and the United Arab Emirates with 185 projects/54,533 rooms. Following distantly is Egypt with a record 58 projects/14,610 rooms, then Qatar with 56 projects/14,286 rooms, and Oman with 33 projects/6,615 rooms. Dubai continues to lead the construction pipeline in the United Arab Emirates with 146 projects/44,557 rooms.

Forty-four percent of the projects in the construction pipeline In the Middle East are found within these five cities: the Provincial region with 65 projects/13,852 rooms; Riyadh with 58 projects/11,796 rooms; Doha, Qatar with 49 projects/11,982 rooms; Jeddah with 48 projects/10,157 rooms; and Makkah with 33 projects/33,938 rooms.

Forty-six percent of the projects in the pipeline in the Middle East belong to these leading franchise companies at the end of the third quarter: Hilton Worldwide with 95 projects/26,559 rooms, followed by Marriott International with 90 projects having 23,808 rooms. Next is Accor with 82 projects/24,724 rooms.

The leading brands in the pipeline for these companies are Hilton's DoubleTree with 25 projects/6,181 rooms, and Hilton Garden Inn, at an all-time high, with 22 projects/6,960 rooms; Marriott's Courtyard with 21 projects/4,382 rooms and Residence Inn with a continued all-time high of 17 projects accounting for 2,057 rooms; Accor's Ibis brands with 13 projects/4,474 rooms, Moevenpick with 11 projects/2,833 rooms and Adagio City Aparthotel with 11 projects/2,288 rooms.

*COVID-19 (coronavirus) has had an unprecedented impact on the world and the hospitality industry. LE's market intelligence department has and will continue to gather global hotel intelligence on the supply side of the lodging industry and make that information available to our subscribers. It is still early to predict the full impact the pandemic will have on the lodging industry. We will have more information to report in the coming months.

About Lodging Econometrics (LE)

Lodging Econometrics is the leading provider of global hotel intelligence. Combining unparalleled industry experience, a real-time pulse on market trends and extensive knowledge of key decision-makers, LE delivers actionable business development programs for hotel franchise companies looking to accelerate their brand growth, hotel ownership and management companies seeking to expand their real estate portfolios, and lodging industry vendors wanting to increase their sales. LE's programs turn a client's business goals into opportunities that advances their competitive advantage.

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