Middle East Hotel Construction Pipeline Marks Highest Year-Over-Year Project Growth Since 2018
Rendering of the upcoming Kempinski Marina Residences Dubai
The Q4 2023 Hotel Construction Pipeline Trend Report for the Middle East from Lodging Econometrics (LE) states that at the close of the fourth quarter, the region's total pipeline stands at 607 projects/145,984 rooms. The region boasts an impressive 11% year-over-year (YOY) increase in projects and a 2% YOY rise in rooms, marking the most substantial growth by projects since Q1 2018.
At Q4, there are 309 projects/83,308 rooms under construction, up 2% YOY by projects. Those projects scheduled to start construction in the next 12 months are at 110 projects/26,454 rooms, up 7% YOY by projects, while projects in early planning are up an impressive 32% YOY and stand at a record-high 188 projects/36,222 rooms.
At Q4 2023, luxury project counts reached an all-time high with 154 projects and 30,421 rooms. Upper upscale projects in the Middle East also reached the highest project and room counts ever recorded by LE, accounting for 25% of the projects in the region's total pipeline, and closed Q4 with 160 projects/41,662 rooms.
Hotel renovations and brand conversions in the Middle East have grown 46% YOY by projects, when compared to Q4 2022 totals, reaching a new record of 54 projects/11,484 rooms at the Q4 2023 close. Conversion projects grew substantially YOY in the fourth quarter, with a record 43 projects/8,790 rooms.
Countries with the most projects in the construction pipeline are Saudi Arabia, with an all-time high of 300 projects with 72,761 rooms, and the United Arab Emirates (UAE), with 103 projects/27,152 rooms. Nearly 70% of the projects and rooms in the Middle East's hotel construction pipeline are located within Saudi Arabia and the UAE. Following is Egypt, at an all-time high of 95 projects and 23,641 rooms, then Qatar with 36 projects/8,922 rooms, and Oman with 32 projects/6,370 rooms.
The Provincial cities surpass other cities in the Middle East and lead with 133 projects and 28,656 rooms, while Riyadh achieves all-time high counts of 90 projects and 17,804 rooms. Jeddah follows with 55 projects and a record-high 11,686 rooms, and Cairo and Doha contribute with 38 projects/8,624 rooms and 32 projects/8,086 rooms, respectively. Fifty-seven percent of the projects and 51% of the rooms in the Middle East are concentrated in these five key cities. Meanwhile, Dubai continues to dominate the construction pipeline in the UAE, boasting 65 projects and 19,170 rooms.
The Middle East had 37 new hotels/9,617 rooms open in 2023. The LE forecast for new hotel openings indicates 96 new hotels/18,881 rooms are expected to open in 2024, and 95 new hotels/24,871 rooms in 2025.