The boom in hotel construction in the Middle East has continued in second quarter with projects presently under construction throughout the region stand at 332 projects with 91,858 rooms. Construction for another 22938 rooms at 87 projects is likely to start in next 12 months, says a report.

Middle East, notably the six-country Gulf Cooperation Council (GCC), has been seeing an unprecedented boom in hotel construction. According to the latest report by hotel construction data aggregator, Lodging Econometrics, Middle East Hotel Construction Pipeline Trend Report at the end of second quarter of 2022, about 140,055 rooms at 545 projects were in the pipeline, a growth of 3 pc in number of projects over Q2, 2021.

The report says that while economic and geopolitical uncertainty still pose many challenges throughout the Middle East, but as travel restrictions have been gradually lifted across the region, domestic travel and tourism numbers have improved throughout the first two quarters. Another key finding is that for the second consecutive quarter, 72 pc of the projects in the Middle East are in the top three chain scales (luxury, upper upscale, and upscale), with upper upscale projects reaching record high project counts of 121 projects and 31,950 rooms in Q2.

Projects presently under construction throughout the region stand at 332 projects with 91,858 rooms. Projects scheduled to start construction in the next 12 months stand at 87 projects with 22,938 rooms, up 7 pc by projects and 18 pc by rooms YOY, and projects in early planning stand at 126 projects with 25,259 rooms, up 15 pc by projects YOY.

Countries in the Middle East with the largest number of projects in the construction pipeline at Q2 2022 are Saudi Arabia with 212 projects or 60,045 rooms and the United Arab Emirates with 119 projects with 33,121 rooms. 61 pc of projects and 67 pc of rooms in the Middle East’s hotel construction pipeline are located within these two countries. Following distantly are Egypt with record high project and room counts of 74 projects with 16,569 rooms, then Qatar with an all-time high project count of 66 projects and 15,168 rooms, and Oman with 29 projects or 6,414 rooms. Dubai continues to lead the construction pipeline in the United Arab Emirates with 81 projects and 24,382 rooms.

Regions and cities with the largest hotel construction pipelines are Saudi Arabia’s Provincial region with 73 projects with 15,031 rooms; Riyadh, Saudi Arabia, with 62 projects with 12,580 rooms; Doha, Qatar with 54 projects with 12,847 rooms; Jeddah, Saudi Arabia, with 43 projects with 8,986 rooms; and Makkah, Saudi Arabia with 34 projects or 23,448 rooms. Forty-nine percent of the projects and 52 pc of the rooms in the total construction pipeline in the Middle East are found within these five cities.

At the end of second quarter of 2022, hotel franchise companies with the greatest number of projects in the construction pipelines in the Middle East are led by Hilton with an all-time high project count of 98 projects, accounting for 25,264 rooms. Following Hilton is French group Accor, with 83 projects comprising 20,248 rooms and then Marriott International with 77 projects and 21,933 rooms, and InterContinental Hotels Group (IHG) with 53 projects with 12,644 rooms. A hefty 57 pc of the projects in the pipeline in the Middle East belong to these four companies.

In the first half of 2022, the Middle East had 32 new hotels with 6,350 rooms open. LE analysts forecast another 63 hotels with 16,054 rooms to open in the second half, bringing the total number of expected new hotel openings to 95 hotels and 22,404 rooms by year-end. In 2023, new hotel openings are forecast to climb to 114 hotels comprising 28,450 rooms with continued growth predicted for 2024 with 125 new hotels accounting for 30,408 rooms expected to open.