High-end projects dominate Middle East pipeline

INTERNATIONAL REPORT — Luxury projects, as well as upper
upscale and upscale projects, continue to dominate the Middle East hotel
construction pipeline, according to the latest data from Lodging Econometrics.

At the end of the second quarter, the region’s hotel
construction pipeline had 607 projects and 147,088 rooms, representing a 2%
increase in projects and a 1% increase in rooms.

There are 300 projects and 80,867 rooms currently under
construction in the region, while projects scheduled to start construction in
the next 12 months have seen a significant rise year over year, with 145
projects (up 42%) and 34,706 rooms (up 45%). Projects in early planning at the
close of the second quarter stood at 162 projects with 31,515 rooms.

The luxury chain scale leads with 162 projects and 36,342
rooms, followed by the upscale chain scale with 158 projects and 42,956 rooms,
and the upper upscale chain scale with 148 projects and 36,213 rooms. Those
three chain scales account for 77% of the projects and 79% of the rooms in the
region’s pipeline.

Saudi Arabia leads the country rankings with all-time highs
of 320 projects and 79,756 rooms. Two cities in Saudi Arabia lead the city
rankings, with Riyadh first with 89 projects and 17,784 rooms, Jeddah second
with 58 projects and 12,248 rooms, and Cairo, Egypt third with 39 projects and
8,789 rooms.

In the first half of 2024, 35 new hotels and 6,308 rooms
opened in the Middle East, and LE projects an additional 66 new hotels and
13,723 rooms to open by the end of the year. Looking ahead, LE projects new
hotel openings in the Middle East will increase slightly in the coming years,
with 102 new hotels and 25,914 rooms opening in 2025 and 121 new hotels and
24,766 rooms expected to open in 2026.