Hotel headline grabbers

STR STATISTICS COMMISSIONED BY ARABIAN TRAVEL MARKET HIGHLIGHT REGION’S HOSPITALITY DEVELOPMENT PROWESS

1Hotel development in prime GCC tourism destinations is growing at six times the global average

Despite the pandemic headwinds the global hospitality industry has had to contend with over the past two years, new hotel development in prime tourism destinations in GCC destinations including Saudi Arabia, Qatar, Oman and the UAE, remains substantial, even by international standards.

According to research commissioned by Arabian Travel Market and conducted at the end of 2021 by hotel market intelligence and global benchmarking company STR, Makkah and Doha are both expanding their hotel room inventory by 76%, followed by Riyadh, Medina and Muscat with 66%, 60% and 59% growth respectively.

In Dubai, rooms growth stands at 26%, which is still extraordinary considering its existing base and following years of continuous hotel development, and it is still more than double the global average.

According to the report, there are almost 2.5 million hotel rooms currently under contract around the world, 3.2% or 80,000 rooms of that supply is taking place in Saudi Arabia alone. Furthermore, although Expo 2020 in Dubai, has drawn to a close (March 31, 2022), the mega event has been the catalyst for accelerated hotel room growth in the UAE with almost 50,000 rooms still due to open across the emirates.

Following closely behind is Doha with final preparations for the FIFA World Cup 2022 now being put in place. Doha is on track to deliver 23,000 hotel rooms pre- and post-World Cup 2022, adding to the country’s burgeoning hotel property portfolio.

2More than 32,000 rooms under construction in KSA

A total of 32,621 hotel rooms are under construction in Saudi Arabia as the kingdom prepares to meet pent-up demand from pilgrims returning to its holy cities, reveals STR. The RevPAR recovery index stands at 52%, noting the absence of millions of Muslim pilgrims has significantly impacted hotel performance in Saudi Arabia. Madinah and Makkah witnessed RevPAR rates of just 33% and 24% respectively, in 2021. Although significantly lower than pre-pandemic levels, KSA’s hotel performance registered year-on-year gains in 2021 and the sector’s recovery is expected to persist throughout the coming year, with pent-up demand driving further improvements as COVID-related restrictions continue to ease.

Hotels in Al Khobar are currently outperforming those in Saudi Arabia’s other major cities, with RevPAR surpassing pre-pandemic levels in 2021. Riyadh, Dammam and Jeddah, meanwhile, recorded recovery index rates of 88%, 85% and 56%, respectively, last year.

Middle East Pipeline

169,000 pipeline rooms are currently under contract across the Middle East, the three most active cities being Dubai, Makkah and Doha, respectively.