In the recent Middle East Hotel Construction Pipeline Trend Report from Lodging Econometrics (LE), at the end of 2022’s second quarter, the total pipeline stands at 545 projects/140,055 rooms, up 3% by projects year-over-year (YOY).
Economic and geopolitical uncertainty still pose many challenges throughout the Middle East, but as travel restrictions have been gradually lifted across the region, domestic travel and tourism numbers have improved throughout the first two quarters. For the second consecutive quarter, 72% of the projects in the Middle East are in the top three chain scales (luxury, upper upscale, and upscale), with upper upscale projects reaching record high project counts of 121 projects/31,950 rooms at Q2.
At Q2, projects presently under construction throughout the region stand at 332 projects/91,858 rooms. Projects scheduled to start construction in the next 12 months stand at 87 projects/22,938 rooms, up 7% by projects and 18% by rooms YOY, and projects in early planning stand at 126 projects/25,259 rooms, up 15% by projects YOY.
Countries in the Middle East with the largest number of projects in the construction pipeline at Q2 2022 are Saudi Arabia with 212 projects/60,045 rooms and the United Arab Emirates with 119 projects/33,121 rooms. 61% of projects and 67% of rooms in the Middle East’s hotel construction pipeline are located within these two countries. Following distantly are Egypt with record high project and room counts of 74 projects/16,569 rooms, then Qatar with an all-time high project count of 66 projects/15,168 rooms, and Oman with 29 projects/6,414 rooms. Dubai continues to lead the construction pipeline in the United Arab Emirates with 81 projects/24,382 rooms.
Regions and cities with the largest hotel construction pipelines are Saudi Arabia’s Provincial region with 73 projects/15,031 rooms; Riyadh, Saudi Arabia, with 62 projects/12,580 rooms; Doha, Qatar with 54 projects/12,847 rooms; Jeddah, Saudi Arabia, with 43 projects/8,986 rooms; and Makkah, Saudi Arabia with 34 projects/23,448 rooms. Forty-nine percent of the projects and 52% of the rooms in the total construction pipeline in the Middle East are found within these five cities.
At the Q2 2022 close, franchise companies with the greatest number of projects in the construction pipelines in the Middle East are led by Hilton Worldwide with an all-time high project count of 98 projects, accounting for 25,264 rooms. Following Hilton is Accor, with 83 projects/20,248 rooms, Marriott International with 77 projects/21,933 rooms, and InterContinental Hotels Group (IHG) with 53 projects/12,644 rooms. Fifty-seven percent of the projects in the pipeline in the Middle East belong to these four companies.
The leading brands in the pipeline for these companies are Hilton’s Doubletree by Hilton, with 26 projects/5,885 rooms and its Hilton Hotel & Resort brand with 22 projects/7,296 rooms. Accor’s top brands with the greatest number of projects in the construction pipeline at Q2 are the Novotel brand with 11 projects/3,184 rooms and the Movenpick brand with 11 projects/2,695 rooms. Marriott’s top brands in the pipeline are Courtyard by Marriott with 15 projects/3,385 rooms and the Residence Inn brand with 7 projects/956 rooms. IHG’s leading brands are its InterContinental brand with 13 projects/3,406 rooms and its Holiday Inn brand with 11 projects/2,769 rooms.
In the first half of 2022, the Middle East had 32 new hotels with 6,350 rooms open. LE analysts forecast another 63 hotels with 16,054 rooms to open in the second half, bringing the total number of expected new hotel openings to 95 hotels/22,404 rooms by year-end. In 2023, new hotel openings are forecast to climb to 114 hotels/28,450 rooms with continued growth predicted for 2024 with 125 new hotels accounting for 30,408 rooms expected to open.