Middle East's construction pipeline hits record highs

The rise in visitors to theme parks, cultural attractions, Expo 2020 and in affordable hotels has put Dubai's hospitality industry on track for continued growth past 2020.
The United Arab Emirates pipeline has 217 hotels with 61,375 guestrooms. Image: Schmid-Reportagen / Pixabay

According to the recent Middle East hotel construction pipeline report by analysts at Lodging Econometrics, the region continued to show rapid pipeline expansion in second-quarter 2018 with the highest counts since 2007 when LE first began its tracking. 

The total pipeline stands at 603 hotels with 175,288 guestrooms, an all-time high. These numbers show a 119 percent increase in hotels and 125 percent increase in guestrooms since the region’s low in the fourth quarter of 2013 when the total pipeline bottomed at 275 hotels and 77,772 guestrooms.

Hotels presently under construction are at 355 properties with 113,635 guestrooms, also an all-time high. Hotels scheduled to start construction in the next 12 months are at 127 hotels with 33,158 guestrooms, and hotels in early planning are at 121 hotels/28,495 guestrooms, both at their highest levels since 2007.

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In the first half of this year, the Middle East had 43 new hotels open while another 51 hotels are expected to open in the second half, bringing the total number of slated hotel openings to 94 by year's end. Analysts at LE predict “explosive” growth for new hotel openings in the coming years, with 119 expected to open in 2019 and156 in 2020.

Top Countries and Cities

Countries with the largest number of hotels in the construction pipeline are the United Arab Emirates with 217 hotels and 61,375 guestrooms and Saudi Arabia, with 208 hotels and 74,962 guestrooms. Following (distantly) are Qatar with 58 hotels and 13,733 guestrooms and Egypt with 42 hotels and 9,923 guestrooms. The fastest-growing emirate construction pipeline is in Dubai, with 163 hotels and 47,783 guestrooms. The other notable emirate is Abu Dhabi with 21 hotels and 5,647 guestrooms.

Regions and cities having the largest hotel construction pipelines are located within Saudi Arabia, where the Provincial Region has 59 hotels with 11,467 guestrooms, and Riyadh has 57 hotels with 10,735 guestrooms. Jeddah is recording its highest counts since 2007 with 56 hotels and 11,027 guestrooms while Makkah (also known as Mecca) has 36 hotels and 41,733 guestrooms, also a record high.

Top Companies and Brands

The companies with the largest construction pipelines in the Middle East are Marriott International with 96 hotels and 22,066 guestrooms, Hilton with 91 hotels and 25,341 guestrooms, and AccorHotels with 81 hotels and 23,512 guestrooms. Marriott International is showing an all-time high project count while Hilton is on its third quarter in a row of overall record highs for both hotels and guestroom counts.

The leading pipeline brands for these companies are Marriott’s Courtyard with 21 hotels and 4,476 guestrooms, and Residence Inn with 16 hotels and 1,877 guestrooms; Hilton’s full-service Hilton Hotel & Resort with 26 hotels and 9,736 guestrooms, and DoubleTree by Hilton with 26 hotels and 6,113 guestrooms; and AccorHotels’ Novotel with 14 hotels and 5,165 guestrooms, and Adagio City Aparthotel with 14 hotels and 2,711 guestrooms. 

All of these leading pipeline brands, with the exception of Hilton’s full-service Hotel and Resort, are at their record highs, according to the LE data.