STR Global: Saudi Arabia, UAE lead MEA hotel development pipeline

STR Global has released its Global Construction Pipeline Report for May, with the Middle East/Africa hotel region reporting 589 hotels under contract for a total of 137,784 rooms. Saudi Arabia and the United Arab Emirates are leading the Middle East region in rooms under contract.

The Middle East overall is the fastest-growing region in the world, with 99,199 rooms under contract in the region. Existing room supply is expected to grow by 40.0 percent.

The overall picture of development in the Middle East shows a clear differentiation between the strongest countries, in terms of supply and rooms under contract. The UAE and Saudi Arabia combined accumulate to 68.0 percent of the existing room supply in the Middle East, where STR Global tracks 13 countries. These two countries also account for 70.0 percent of rooms in the region’s pipeline.


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Despite the 12-month moving average supply growth rate of the UAE (+8.2 percent), Saudi Arabia has a stronger pipeline in terms of rooms under contract. The amount of rooms under contract in Saudi Arabia (35,587 rooms) is slightly more than the total in the UAE (34,226 rooms). This would mean a 60.0-percent supply growth in Saudi Arabia and a 32.0-percent supply growth in the UAE.

By Hotel Type

In Saudi Arabia, the Upscale and Upper Midscale hotels lead with the most rooms under contract, while the Luxury and Upper Upscale hotels top the most rooms under contract in the UAE.

Among the Chain Scale segments, the Upper Upscale segment accounted for the largest portion of rooms Under Contract with 35.8 percent and 49,260 rooms. Three other segments each accounted for more than 10 percent of rooms Under Contract: the Upscale segment (19.0 percent with 26,117 rooms); the Luxury segment (18.2 percent with 25,044 rooms); and the Unaffiliated segment (14.0 percent with 19,327 rooms).

The upper upscale segment also made up the largest portion of rooms under construction (36.2 percent) with 23,570 rooms. The Luxury segment (20.8 percent with 13,567 rooms) and the Upscale segment (20.2 percent with 13,174 rooms) each made up a significant portion of rooms under construction in the region.

Good to know: The Under Contract data includes projects in the In Construction, Final Planning and Planning stages but does not include projects in the Unconfirmed stage.