Middle East to add 600,000 hotel rooms: Knight Frank & STR report

Saudi Arabia to add unprecedented 310,000 rooms
2022-09-08
/
/ Doha, Qatar
/ Hotels
Middle East to add 600,000 hotel rooms: Knight Frank & STR report

Hospitality market in Qatar is expected to reach USD 54 billion by 2030, according to Knight Frank (Photo: India Outbound)

Middle East, notably the six Gulf Cooperation Council countries, is leading the global charge in addition of hotel rooms, with Saudi Arabia, Dubai, Qatar to add 310,000, 65,000 and 56,000 rooms respectively, says a study.
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Days before the next edition of the Future Hospitality Summit gets underway in Dubai, a new study says that the regional hospitality industry is at the forefront of hotel performance recovery worldwide and is also witnessing an unprecedented growth.

The study has been jointly prepared by real estate consultant Knight Frank and data benchmarking, analytics and marketplace insights provider for the hospitality industry, STR. It says that the tourism industry in the region is set to surpass the pre-pandemic level of 100 million tourist arrivals and contribution of over USD 270 billion in revenue contribution in 2022. The sector is set to reach its goal of 160 million tourists by 2030, a growth of almost 50 pc in barely eight years.

“The region is going through a fascinating transformation in the hospitality sector, with over 600,000 hotels rooms in the planning and development stage. This quantum of development, which has not been seen before in the Middle East or even globally, is set to change the shape of the region’s tourism industry in the years to come and will help to further raise the region’s profile as a one of the world’s key hospitality players,” says Turab Saleem, Partner & Head of Hospitality, Tourism & Leisure – MENA at Knight Frank.

One of the main reasons behind the exceptional growth in tourism witnessed in the region has been the successful management of mega events, says the report, adding that with the UAE welcoming almost 24 million visitors to Expo 2020 Dubai – in the middle of the global pandemic— has gone a long way in boosting international traveller confidence, says Knight Frank. With 65,000 hotel rooms under development in Dubai, tourism contribution is set to reach 15 pc of GDP by 2030: the highest in the region and among the highest in the world, where the international average is barely 9 pc.

STR says that the Middle East has also been at the forefront of hotel performance recovery throughout the pandemic and that the momentum has continued in 2022 and will continue beyond the current year also. “Dubai is having a tremendous year with hotel RevPAR for the year-to-date period up to July, 23 pc higher than 2019. With most destinations in the region rebounding and in many cases surpassing pre pandemic performance levels, investor interest remains high, of which the proof is in the hotel pipeline. The success of Expo 2020 in Dubai and a keen interest in Saudi Arabia and the transformative Vision 2030, have boosted investment and fueled the hotel pipeline in the region. With the first mega projects nearing their first phases of completion and new ones being announced, the Kingdom is now firmly among the fastest growing countries globally for hotel development,” says Philip Wooller, Senior Director Middle East & Africa at STR.

The hospitality market in Qatar is expected to reach USD 54 billion by 2030, according to Knight Frank. “Hosting the FIFA World Cup is a great opportunity for Qatar to develop its tourism sector to new heights. The country has allocated USD 45 billion worth of funds for tourism and travel growth by 2030. Presently, there are over 56,000 hotel rooms under development with an estimated value of USD 7 billion with international brands representing 62 pc of the inventory in the pipeline,” says Saleem.

But it is the Kingdom of Saudi Arabia that is the big player in the region. The Kingdom has USD 110 billion worth of hotel projects planned for completion by 2030 and a total of 310,000 hotel keys under development, as a measure to meet what is clearly one of the most ambitious tourism targets in the region with the goal of 100 million tourists by 2030.

The massive additions are a testament to the robust nature of the hospitality industry in the region. “Hotel performance for the Middle East region is getting close to a full pre-pandemic recovery in 2022 which would be an outstanding outcome. Hotel rates are the main driver of RevPAR so far with occupancy also closing in on 2019 levels. Meanwhile, anticipation is high for the upcoming World Cup in Qatar and the effect it will have on both national and regional hotel performance,” says STR’s Wooller.

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