The Middle East’s hotel construction projects have seen a significant increase, with a total of 607 projects and 147,088 rooms as of the second quarter of 2024. This growth is a reflection of the booming tourism and hospitality sector in countries such as the UAE, Saudi Arabia, and Egypt. Luxury and upscale chains make up 77% of the total projects in the region, with the UAE leading the way with 87 projects and 22,831 rooms in the construction pipeline.
Saudi Arabia has reached an all-time high in hotel projects, with 320 projects and 79,756 rooms under construction in Q2. Egypt has also hit record highs with 107 projects and 26,185 rooms. The opening of new hotels in the Middle East has been steady, with 35 new hotels and 6,308 rooms opening in the first half of 2024, and an additional 66 new hotels with 13,723 rooms expected to open by the end of the year.
Looking ahead, Lodging Econometrics forecasts an increase in new hotel openings for 2025 and 2026, with 102 new hotels and 25,914 rooms projected for 2025, and 121 new hotels and 24,766 rooms expected for 2026. Dubai’s hospitality sector is also thriving, with around 15,000 new rooms expected by the end of 2027. Challenges such as rising construction costs and competition call for a focus on innovation and sustainability in the industry.
Luxury chains dominate the Middle East’s hotel construction pipeline, with 162 projects and 36,342 rooms in this category. The upscale chain scale follows closely with 158 projects and 42,956 rooms, and the upper upscale chain scale with 148 projects and 36,213 rooms. In Dubai, the four-star category has shown significant growth, with 436 new rooms delivered, marking a 216% increase compared to the previous year.
Cities leading in project counts in the Middle East at Q2 include Saudi-capital Riyadh with 89 projects and 17,784 rooms, Jeddah with 58 projects and 12,248 rooms, and the Egyptian capital of Cairo with 39 projects and 8,789 rooms. Doha follows with 24 projects and 5,794 rooms, and Saudi Arabia’s Makkah with 22 projects and 14,353 rooms. With nearly 300 projects and 80,867 rooms currently under construction in the region, the outlook for the hospitality sector in the Middle East remains positive.
