The Middle East hotel investment market has been expanding rapidly with no signs of slowing down. As of August, the Middle East construction pipeline totaled 583 hotel projects under contract, according to STR—a majority of which are slated for 2020-openings. The UAE and Saudi Arabia both claim the most active hotel construction areas in the region, with 40,020 guestrooms in 89 projects in Saudi Arabia’s pipeline and 35,050 in 121 projects in the UAE’s.
Al Bustan Palace, Oman
Saudi Arabia’s goals for economic diversification and rising tourist numbers have transformed the Kingdom into a hotbed of development, especially due to the goals set for Saudi Vision 2030. According to STR, Saudi Arabia currently has the highest number of hotel guest rooms under construction in the entire MENA region, with most of the development concentrated in the highly attractive holy cities Madinah and Makkah. One of Makkah’s projects, the 10,000-guest room Abraj Kudai, is slated to be the largest hotel in the city once it launches at the end of the year. Meanwhile, Marriott’s hotel construction pipeline in the Kingdom alone has already reached more than 10,000 guest rooms in 30 projects.
The UAE on the other hand, has been working to increase tourism earnings by 51 percent from 2016 as the country rushes to accommodate the 25 million visitors targeted for Expo 2020 Dubai and generate $44 million from international tourism by 2020. The UAE has taken the lead in driving growth in the MENA region with its massive developments and projects, including Bluewaters Island and Expo 2020 Dubai. The region’s construction market, which BMI Research and PwC named the world’s fastest growing, now totals $4 trillion. According to Dmg Events Middle East, its active hospitality projects are currently valued at $71.6 billion as of early September.