A snapshot of growth: the Middle East’s hospitality sector

A SNAPSHOT OF GROWTH:

THE MIDDLE EAST’S HOSPITALITY SECTOR

With events such as the Expo 2020 (postponed to October 2021) and the 2022 FIFA World Cup on the calendar, the Middle East’s hospitality sector is set to welcome a remarkable number of new projects. Simone Remba, consultant at Thomas Klein International, takes a closer look at the region’s hottest markets.

It is safe to say that travelers will continue to have a wide choice of upscale options, as the GCC does not fall short when it comes to indulgent hospitality experiences.

As of January 2021, the Top Hotel Projects construction database reported that a total of 187,965 hotel rooms are currently in the pipeline across the Middle East, with the UAE and KSA leading the race. By Q4 2021, an estimated 250 of those projects are scheduled to open, adding 76,288 hotel rooms to the market.

Forecast 2021-2022 remains just as strong, with 165 new projects expected to be delivered by 2022, adding over 50,000 hotel rooms. A total of 66 and 143 brand new hotels are anticipated in 2023 and 2024 respectively. When it comes to the categorization of these upcoming properties, developers are eyeing the upper end of the spectrum by supplying deluxe/ luxury accommodation, with 51 percent of the properties being four-star hotels and the remaining 49 percent being five star. In the coming years, the UAE is leading the charge, with 211 new hotel openings, of which 147 will be launching in Dubai. These new openings mean that Dubai alone will be responsible for adding over 70 percent of the total 62,633 new rooms to an already ultra-competitive market. Saudi Arabia won’t be far behind, with the opening of 168 new properties (73,464 rooms) in the major urban and religious hubs of Riyadh, Jeddah and Makkah to further encourage their tourism sector.

Qatar

As the country gears up for the 2022 FIFA World Cup, Top Hotel Projects reports a steady increase of hotel properties in Qatar, with 16 hotels (4,514 rooms) slated for 2021 and five hotels (2,600 rooms) slated for 2022. Qetaifan Island North (Lusail City) is poised to be the country’s prime waterfront business and leisure destination of 2022, covering 1.3 million square meters of ultraluxury leisure, retail and entertainment space. One of the first confirmed hotel partnerships is with Rixos Hotels, a brand that is set to open its first property in Qatar — Rixos Doha Qetaifan. The property will feature 345 rooms, a beach club and a souk, with 11,000 square meters of GLA. Oman

Oman will soon welcome one of the most reputable luxury brands under the Marriott umbrella, with the St. Regis Al Mouj Muscat Resort expected to open in 2022. The 271room hotel — with 170 branded residential units — is set to become the epitome of luxury and modern elegance in the sultanate. In parallel, IHG will be introducing its artsy boutique brand, Hotel Indigo, to Oman. This will be the second Hotel Indigo in the region, after the recent opening of the Dubai branch. Located 2,000 meters above sea level, Hotel Indigo Jabal Al Akhdar will be the go-to upscale boutique property, offering 176 rooms with uninterrupted views of the mountainous surroundings. Saudi Arabia

Saudi Arabia is set to host one of the biggest developments in the world with its sustainability-led Red Sea project. With the first phase expected to open in 2022, the new supersized resort will offer local and international guests the choice of up to 50 hotels. The project is set to redefine sustainable hospitality as one of the world’s foremost destinations powered solely by renewable energy. Once complete in 2030, The Red Sea Project will span a total of 22 islands, offering 8,000 hotel rooms and 1,300 residential units.

UAE

With a push to be up and running in time for the Expo 2020, Top Hotel Projects reports that the UAE will see a total of 83 new hotels opening their doors by the end of 2021, welcoming 26,168 new hotel rooms to the mix. In 2022, growth will slow down, with 56 openings and 14,870 rooms on the cards. Further projections include 24 hotels (7,898 rooms) in 2023 and a further 45 properties (12,500 rooms) slated for 2024. Of these 208 new hotels, 46 percent and 54 percent will belong to the four-star and five-star hotel categories respectively. In terms of the fastest-growing hotel brands within the UAE, Millennium Hotels takes the lead with seven new hotels (2,513 rooms) for 2021, followed by Rove Hotels, Vida Hotels & Resorts and The Address Hotels & Resorts, each with six new properties, adding 1,871 rooms, 1,239 rooms and 1,046 rooms to the UAE’s hospitality landscape respectively. It is safe to say that travelers will continue to have a wide choice of upscale options, as the GCC does not fall short when it comes to indulgent hospitality experiences. With the pending arrival and further expansion of hotel high-rollers, the region is poised to strengthen its place on the luxury hospitality global map.