middle east analysis

Global hospitality downturn affects regional hotel pipeline

Slowdown impacting supply timeline but 48 properties still on track for 2010 opening

with 31,434 rooms); ‘unaffiliated’ (25.3 percent with 31,448 rooms); and ‘luxury’ (21.2 percent with 26,366 rooms). The two smallest portions of the total active pipeline included ‘economy’ (3.9 percent with 4,889 rooms) and ‘midscale without food and beverage’ (1.4 percent with 1,691 rooms).

UPCOMING SUPPLY

The report added that the MEA region currently has more than 576,544 hotel rooms with a further 71,331 rooms under construction. Dubai-based research company Proleads said the GCC

region is likely to see 48 new hotels with 14,178 rooms open in 2010, at an estimated cost of US$7.3 billion. Maggie Moore, exhibition director of upcoming Dubai

As the world’s hospitality sector continues to feel the after-effects of the financial crisis, a recent report has revealed a slowdown in the number of hotels in the pipeline for the Middle East and Africa (MEA) region. A total of 14 hotels were added to the development

pipeline in January 2010 yet only one hotel was added in February, according to hospitality industry analyst STR Global. The company’s Construction Pipeline Report for the

MEA region in February 2010 found that the development pipeline includes 457 hotels comprising 124,142 rooms. The UAE reported the largest number of rooms in

the total active pipeline with 52,566, followed by Saudi Arabia with 14,178. Konstanze Auernheimer, director of marketing for

STR Global, added: “There are quite a few openings coming up, and recently there have been announce- ments about building fewer hotels. A couple of

segments are at capacity – in Dubai there are a lot of luxury properties, so the question is do you really need another one? With the economic conditions the way they were in 2009, it’s not surprising that the pipeline slows down.” The shift from luxury to affordability was highlighted

by Selim El Zyr, president and CEO of Abu Dhabi-head- quartered Rotana Hotels & Resorts. “Business travel and accommodation for the budget-conscious execu- tive is an increasingly important market but remains grossly underserved,” he said. Dubai ended the month with the most rooms in the

total active pipeline with 30,139, followed by Abu Dhabi with 14,171. Beirut and Cape Town were the two markets that reported less than 1,000 rooms in the total active pipeline, with 774 and 341 rooms respectively. Three segments accounted for more than 70 percent of the total active pipeline: ‘upper upscale’ (25.3 percent

exhibition The Hotel Show, commented: “While much of the recent attention has focused on the impact of the downturn on the hospitality sector, the UAE continues to be one of the world’s active areas for hotel openings. “The UAE alone has over 5,700 rooms coming to

market in 2010. Qatar, Bahrain, Kuwait and Saudi Arabia are also seeing increased activity.” She added: “The Saudi Arabian hospitality sector looks

set to grow in tandem with inbound travel on the up, both in terms of religious tourism and business visitors.” Proleads forecasts that there will be another 21

hotels with 7,000 hotel rooms in Saudi Arabia by 2013, 2,000 of which will open this year. A total of 1,961 new hotel rooms are expected to

be added to the Qatar hospitality market this year, according to Proleads, with a total of 21 new hotels coming online by 2013. Last year the number of available hotel rooms in

the country increased by 25 percent compared to the previous year.

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