Middle East and Africa only region globally to show hotel pipeline increase in Q3

Saudi Arabia and UAE lead as region's total hotel rooms under contract increased 2% to 243,613

Atlantis The Palm in Dubai. The UAE and Saudi Arabia led the Middle East and Africa region's hotel room construction activity in September, according to STR. Bloomberg
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The Middle East and Africa was the only region in the world to record an increase in hotel pipeline activity at the end of the third quarter, according to data from hospitality industry analytics provider STR.

The region's total hotel rooms under contract rose about 2 per cent in September compared with the same month last year, to 243,613, according to monthly data from STR.

“Most of the region’s pipeline activity is focused in the Middle East,” STR said.

Saudi Arabia and the UAE led the region's construction activity with 39,070 and 32,373 hotel rooms respectively, the report showed.

The Fifa World Cup being held in Qatar promises booming business for UAE hotels in the last quarter of 2022 as thousands of fans flock to the Gulf country due to limited accommodation in the neighbouring host country.

The UAE’s major local and international hotel chains expect to be at or near full capacity during the four-week football tournament, amid strong forward bookings for November and December, top hospitality executives said.

Saudi Arabia aims to deliver 310,000 completed hotel rooms in the kingdom by 2030 as part of plans to develop its hospitality market for domestic and international tourism, according to a recent report by global property consultancy Knight Frank. Delivery of supply is forecast to cost approximately $110 billion, it said.

In the Middle East and Africa, the number of hotel rooms under planning in September increased about 19 per cent year-on-year to 74,510, STR data showed.

However, the region's construction activity dipped about 3 per cent to 130,956 rooms, while those under final planning decline 6 per cent to 38,147 rooms during the month, the report said.

Europe recorded the biggest decline in overall hotel pipeline activity among the world regions in September, compared with the same month in 2021, the data showed. STR did not provide an explanation for the decrease.

The total number of hotel rooms under contract on the continent declined about 8 per cent to 505,057 rooms, the London-based company said.

In Europe, the number of rooms under construction declined 14 per cent to 197,884, while those under final planning dropped 16 per cent to 144,277, STR data showed.

Germany and the UK led Europe in terms of total rooms under construction, with 38,676 and 29,471 rooms, respectively.

The Americas recorded the second-biggest drop in overall hotel pipeline activity globally in September. The region's total number of hotel rooms under contract declined 5 per cent year on year to 740,443 in September, STR data showed.

The number of hotel rooms under construction in the region decreased by around 9 per cent to 207,585 during the period. Those under final planning dropped 18 per cent to 203,069.

“The US holds the majority of rooms in construction in the region. After the US, Mexico (14,077 rooms) and Canada (7,126 rooms) have the highest number of rooms in construction in the region,” STR said.

In Asia-Pacific, the total rooms under contract declined about 4 per cent to 904,249 in September.

The region's hotel rooms under construction increased nearly 2 per cent to 485,250, while those under final planning dropped 26.3 per cent to 131,427.

“Among countries in the region, China has the most rooms in construction (311,859), followed by Vietnam (28,692),” STR said.

Global capital investment in travel and tourism fell by about a quarter, to $805 billion in 2020, from $1.07 trillion in 2019, as the Covid-19 pandemic devastated the industry, according to data from the World Travel and Tourism Council. Investments in the sector declined a further 7 per cent in 2021 to reach $750bn.

Investment in hotels represents a key component of overall investment and the development of the broader travel and tourism sector.

Updated: October 23, 2022, 7:53 AM