Dubai Leads Way in Middle East Africa in Hotel Construction

(LONDON, UK) The Middle East/Africa hotel development pipeline includes 463 hotels with 124,409 rooms, according to the June 2009 STR Global Construction Pipeline Report released last week.

“A few countries have really dominated the development in the Middle East after skyrocketing oil prices led to an upswing in hotel investment a few years ago,” said Duane Vinson, vice president of content management at STR. “The leader of course is the United Arab Emirates, where 169 projects comprising more than 58,000 rooms are in the total active pipeline. The other country that’s been very active is Saudi Arabia, which has 42 projects under development.”

Among the key markets, Dubai, UAE, reported the largest number of rooms in the In Construction phase (17,300 rooms), as well as total active pipeline (33,319 rooms). Abu Dhabi, UAE, followed with 11,196 rooms in the In Construction phase and 16,994 rooms in the total active pipeline. Jeddah, Saudi Arabia, was the third most active market with 1,299 rooms in the In Construction phase and 2,979 rooms in the total active pipeline.

“What’s being built is very similar to what we’re seeing in Asia/Pacific; primarily it’s the high-end Luxury, Upper Upscale and Upscale,” Vinson said. “Sixty-one percent of the projects in the total active pipeline are in those three chain scales.”

Four of the seven Chain-Scale segments accounted for the majority of the rooms in the total active pipeline. The Luxury segment had the largest percent of rooms in the total active pipeline, accounting for 25.1 percent with 31,194 rooms. The Unaffiliated segment made up 23.4 percent with 29,106 rooms in the total active pipeline. The Upscale segment (22.3 percent with 27,746 rooms) and the Upper Upscale segment (17.0 percent with 21,178 rooms) accounted for a large portion of the total active pipeline as well. The Midscale without Food and Beverage segment reported the smallest amount of rooms and made up the smallest amount of the total active pipeline (0.9 percent with 1,180 rooms).

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