The hotel construction pipeline in the Middle East set another cyclical high in the third quarter with 617 projects and 180,097 rooms, according to the latest data from Lodging Econometrics. The new-pipeline-project counts are up 8 percent while room counts show a 15-percent increase year-over-year, when the pipeline stood at 572 projects and 156,420 rooms. There are currently 360 hotels with 115,222 rooms under construction, a record high. Projects scheduled to start construction in the next 12 months are at 138 hotels with 35,299 rooms, while projects in the early planning stage are at 119 hotels and 29,576 rooms.
The pipeline has grown for five consecutive years following 2013 lows and has surpassed the development surge of 2007-08 led by Dubai and Abu Dhabi, which awakened hotel development in the region.
While the record highs are good news for the region, growth trends may be starting to slow as construction begins. At the same time, new projects announced into the pipeline have been declining throughout 2018.
Top Countries and Cities
Countries with the greatest number of projects in the construction pipeline are the United Arab Emirates with 223 hotels and 63,734 rooms and Saudi Arabia, at a record high, with 214 hotels and 76,324 rooms. Qatar follows with 59 hotels and 14,245 rooms and Egypt with 43 hotels and 10,237 rooms. Continuing to dominate the construction pipeline in the UAE and throughout the region is Dubai with 169 hotels and 50,420 rooms. Abu Dhabi trails behind with 20 hotels and 5,058 rooms, and Ash-Shariqah has 18 hotels with 2,671 rooms in its pipeline.
Cities with the largest hotel-construction pipelines are Riyadh with 61 hotels and 11,574 rooms; the Provincial region with 58 hotels and 11,534 rooms; Jeddah with 58 hotels and 11,520 rooms; Doha, Qatar with 55 hotels and 12,618 rooms; and Makkah with 37 hotels and 41,696 rooms. Four of the cities with the largest pipelines are in Saudi Arabia and are enjoying record highs in their pipeline project and room counts.
Top Companies and Brands
AccorHotels has the region's largest construction pipeline with 102 hotels and 28,079 rooms, a record high for the company. Marriott International follows with 95 hotels and 21,083 rooms, and Hilton has 90 hotels and 25,888 rooms, also a record high.
The leading pipeline brands for these companies are AccorHotels’ Ibis brands with 18 hotels and 5,861 rooms and Novotel with 16 hotels and 5,204 rooms, a record high; Marriott’s Courtyard with 21 hotels and 4,476 rooms and Residence Inn with 16 hotels and 1,877 rooms, both of which are also recording their highest pipeline counts; Hilton’s full-service Hilton Hotels & Resorts with 26 hotels and 9,280 rooms and DoubleTree by Hilton with 25 hotels and 5,873 rooms.
The Middle East, at 291 rooms per construction project, has the largest average project size in the pipeline of any region in the world with 67 percent of its pipeline concentrated in the luxury, upper-upscale and upscale chain scales.
LE expects the region's total for new hotel openings in 2018 will be 86 hotels with 23,464 rooms, surpassing for the first time the peak of 72 hotels with 19,756 rooms set in 2009.
New records will likely be set in both 2019 and 2020 as LE’s forecast for new hotel openings predicts 114 hotels with 27,518 rooms and 134 hotels with 36,277 rooms will open in each year.