PORTSMOUTH, N.H.—Lodging Econometrics (LE) this week reported that at the end of Q3 2020, the hotel construction pipeline in the Middle East declined to 579 projects/168,042 rooms—down 7 percent by projects and 6 percent by rooms year over year (YOY). This is the fifth consecutive quarter the pipeline has declined since reaching its cyclical peak by projects in Q2 2019.
Projects currently under construction in the Middle East stand at 359 projects/117,274 rooms, down slightly from the peak projects and rooms count set in Q2 2020. Projects scheduled to start construction in the next 12 months are down 41 percent by projects and 37 percent by rooms YOY to end the third quarter at 85 projects/20,753 rooms. Projects in the early planning stage are at 135 projects/30,015 rooms. Additionally, in the third quarter, the Middle East opened only 10 new hotels accounting for 1,779 rooms.
Countries with the most projects in the construction pipeline are Saudi Arabia with 204 projects/69,743 rooms and the United Arab Emirates with 185 projects/54,533 rooms. Following distantly is Egypt with a record 58 projects/14,610 rooms, Qatar with 56 projects/14,286 rooms, and Oman with 33 projects/6,615 rooms. Dubai continues to lead the construction pipeline in the United Arab Emirates with 146 projects/44,557 rooms.
Forty-four percent of the projects in the construction pipeline in the Middle East are within these five cities: the Provincial region, Saudi Arabia, with 65 projects/13,852 rooms; Riyadh, Saudi Arabia, with 58 projects/11,796 rooms; Doha, Qatar, with 49 projects/11,982 rooms; Jeddah, Saudi Arabia, with 48 projects/10,157 rooms; and Makkah, Saudi Arabia, with 33 projects/33,938 rooms.
Forty-six percent of the projects in the pipeline in the Middle East belong to these leading franchise companies: Hilton Worldwide with 95 projects/26,559 rooms, Marriott International with 90 projects/23,808 rooms, and Accor with 82 projects/24,724 rooms.
The leading brands in the pipeline for these companies are Hilton’s DoubleTree with 25 projects/6,181 rooms and Hilton Garden Inn with an all-time high of 22 projects/6,960 rooms; Courtyard by Marriott with 21 projects/4,382 rooms and Residence Inn by Marriott with a continued all-time high of 17 projects/2,057 rooms; and Accor’s Ibis brands with 13 projects/4,474 rooms, Moevenpick with 11 projects/2,833 rooms, and Adagio City Aparthotel with 11 projects/2,288 rooms.
