According to the latest Construction Pipeline Trend Report for the Middle East, research analysts at Lodging Econometrics (LE) state at the end of the second quarter of 2021, the hotel construction pipeline in the Middle East declined once again to 531 projects/152,448 rooms. The Middle East’s pipeline is down 10% by both projects and rooms year-over-year (YOY). This is the eighth consecutive quarter the pipeline has declined since reaching its cyclical peak of 638 projects in Q2 2019.
Projects currently under construction dropped 6% by projects and 8% by rooms YOY, standing at 340 projects/107,537 rooms, down 23 projects from the peak of the under construction stage in the Middle East, which occurred in Q2 2020. Projects scheduled to start construction in the next 12 months ended the second quarter at 81 projects/19,515 rooms. Projects in the early planning stage are at 110 projects/25,396 rooms, dipping 8% by projects and 4% by rooms YOY.
Countries with the most projects in the construction pipeline are Saudi Arabia with 187 projects/67,193 rooms and the United Arab Emirates with 149 projects/41,232 rooms. Following distantly is Egypt with a record high project count of 66 and 15,961 rooms, then Qatar with 57 projects/13,719 rooms, and Oman with 31 projects/6,560 rooms. Dubai continues to lead the construction pipeline in the United Arab Emirates with 111 projects/31,901 rooms.
Regions and cities with the largest hotel construction pipelines are Saudi Arabia’s Provincial region with 56 projects/12,115 rooms; Riyadh, Saudi Arabia with 55 projects/11,271 rooms; Doha, Qatar with 49 projects/11,513 rooms; Jeddah, Saudi Arabia, with 42 projects/8,672 rooms; and Makkah, Saudi Arabia with 34 projects/35,135 rooms. Forty-four percent of the projects in the construction pipeline in the Middle East are found within these five cities.
Franchise companies with the largest construction pipelines in the Middle East at the end of the second quarter include Hilton Worldwide with 93 projects/25,280 rooms, followed by Accor with 85 projects/25,162 rooms, Marriott International with 73 projects/21,881, InterContinental Hotels Group (IHG) with and recording a project high of 45 projects/10,739 rooms, and Emaar Hospitality Group with 25 projects/6,478 rooms. These five companies alone account for 60% of the projects and 59% of rooms in the pipeline in the Middle East.
The leading pipeline brands for these companies are Hilton’s DoubleTree with 27 projects/6,083 rooms; Accor’s Novotel with 11 projects/4,013 rooms; Courtyard by Marriott with 15 projects/3,432 rooms; IHG’s Holiday Inn with 11 projects/2,769 rooms; and Emaar Hospitality Group’s The Address brand, with 11 projects/3,355 rooms.
Additionally, the Middle East opened 16 new hotels with 3,007 rooms during the second quarter. In the first half of 2021, the region saw a total of 26 new hotels open, accounting for 6,034 rooms. Another 54 hotels/12,585 rooms are forecast to open in the second half of 2021, bringing the total number of expected new openings to 80 hotels/18,619 rooms by year-end. Research analysts at LE forecast new hotel openings in the coming years, with 128 projects/33,641 rooms expected to open in 2022 and 118 projects/31,819 rooms to open in 2023.