According to the latest published Construction Pipeline Trend Report for the Middle East from Lodging Econometrics (LE), the hotel construction pipeline in the Middle East declined again to 542 projects/156,921 rooms. This is the sixth consecutive quarter project counts have dropped in the region. Fluctuations in oil and gas prices, access to vaccines, the new U.S. administration, and lack of tourism are ultimately having an impact on hotel development. The next few years will prove pivotal in this region and LE will continue to monitor and track the impact.
Projects currently under construction stand at 351 projects/113,063 rooms, a 2% by project and 3% by rooms drop year-over-year (YOY). Projects scheduled to start construction in the next 12 months dropped more drastically YOY, and are down 36% by projects and 41% by rooms YOY to end the fourth quarter at 82 projects/19,206 rooms. Projects in the early planning stage are at 109 projects/24,652 rooms, also a decrease YOY. While hotel construction has dropped YOY, hotel renovations and conversions are on the rise, hitting a project count peak in Q4 ’20.
In the fourth quarter, the Middle East opened only 18 new hotels accounting for 6,174 rooms, the highest hotel count in any quarter of 2020 for the region. For the year, the Middle East opened 51 new hotels/16,391 rooms. LE is forecasting 96 hotels/23,322 rooms to open in 2021 and another 138 hotels/39,929 rooms to open in 2022.
Countries with the most projects in the construction pipeline are Saudi Arabia with 186 projects/66,866 rooms and the United Arab Emirates with 161 projects/45,753 rooms. Following distantly is Qatar with 60 projects/15,030 rooms, then Egypt with 57 projects/14,168 rooms, and Oman with 34 projects/6,891 rooms. Dubai continues to lead the construction pipeline in the United Arab Emirates with 121 projects/35,837 rooms.
The Provincial region leads the Middle East with the most projects in the region’s construction pipeline with 55 projects/12,295 rooms, followed by Riyadh with 54 projects/11,179 rooms, Doha with 52 projects/12,639 rooms, Jeddah with 43 projects/9,005 rooms, and Makkah with 34 projects/34,387 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 fourth quarter: Hilton Worldwide with 92 projects/25,646 rooms, followed by Marriott International with 73 projects having 21,001 rooms. Next is Accor with 83 projects/24,508 rooms.
The leading brands in the pipeline for these companies are Hilton’s DoubleTree with 25 projects/5,897 rooms, and Hilton Garden Inn with 19 projects/6,321 rooms, Marriott’s Courtyard with 15 projects/3,432 rooms and Residence Inn with 10 projects accounting for 1,336 rooms, Accor’s Ibis brands with 12 projects/4,274 rooms and Movenpick with 12 projects/3,153 rooms.