Growth In The Middle East's Hospitality Sector

According to Lodging Econometrics, the global experts in hotel real estate intelligence, hospitality projects in the Middle East are on the upswing. In their Global Construction Pipeline report released in March 2019, out of the 360 hotel projects currently under construction in the Middle East, Dubai accounts for 168 projects, the second largest pipeline count for a city (superseded by New York with 171).

Alongside projects such as the Royal Atlantis, MGM and Dorchester Collection that are in various stages of construction, Q1 2019 openings such as the W Palm Jumeirah, Caesars Bluewaters and Mandarin Oriental Jumeirah reiterate Dubai as an important destination for international operators.  

Over the past two decades, the Emirate has also evolved into a hub for hospitality design in the Middle East.

‘The Emirate’s established design scene makes it very lucrative for design firms, suppliers and even operators to base themselves in Dubai, when doing projects in the larger MENA region,’ says Christian Merieau, managing director of Dubai-based MMAC Design Associates. ‘There is a sense creativity coming from the region that is fresh and more ambitious.’ 

After the UAE, Saudi Arabia has the region’s second highest number of projects in construction pipeline: 214 projects across major cities Riyadh, Jeddah, Mecca and the Kingdom’s Provincial region. MMAC Design Associates was recently awarded multiple projects in Saudi Arabia and HBA, also Dubai-based, is working on key Saudi projects as well.

‘Saudi Arabia has emerged as a strong market for hospitality design,’ says David Tkint, Partner at HBA, Dubai. ‘We are working on projects like the Langham, Jeddah and Four Seasons in Riyadh. The projects there are complex, however the reality of construction is there.’

In established markets like the UAE, alternate destinations such as Sharjah, Fujairah and Ras Al Khaimah are gaining popularity with operators, while interest builds in the traditional submarkets of Bahrain, Oman, Kuwait and Egypt. ‘There is a lot of focus on the region’s environment and natural beauty. Creating desert resorts, developing the coastlines and underdeveloped areas that were not known previously as tourist destinations – there is fast-paced strive to focus on a more diverse market’ says Rachel Kidd, Associate at LW (Dubai) which is working on projects such as the Palace Hotel by Emaar, the Address Hotel RAK and Waldorf Astoria, Kuwait. 

According to the Arabian Hotel Investment Conference's Hotel Investment Forecast 2019, the surge in demand for hotels across the luxury, mid-scale and upscale segments can be attributed to the MENA region's commitment towards diversifying their economies and investment in new world-class tourist attractions.

‘There's an energy and a growth in the Middle East,’ says Ian Schrager, the founder of Edition and Public hotels. After the launch of Abu Dhabi Edition in November 2018, he is now focused on new projects in the GCC, including the Edition Dubai. ‘We see the region as being a real opportunity for expansion as more people begin to realize what a unique and enjoyable part of the world the Middle East is.’