Construction drives Middle East pipeline

INTERNATIONAL REPORT — Nearly half of the Middle East hotel pipeline is currently under construction, according to the latest data from Lodging Econometrics.

Through the third quarter, the pipeline in the region shows upward momentum and stands at 610 projects (up 4% year-over-year) and 149,686 rooms (up 7% year-over-year). Forty-nine percent of those projects are currently under construction (296 projects and 79,978 rooms), while projects scheduled to start construction in the next 12 months saw significant growth, up 36% by projects and 51% by rooms YOY, to end the quarter at 140 projects and 36,260 rooms. Projects in early planning reached 174 projects (up 7% YOY) and 33,448 rooms (up 5% YOY).  Brand conversions continue to be strong in the reach, with record highs of 47 projects (up 31% YOY) and 10,390 rooms (up 37% YOY).

The luxury, upper upscale, and upscale chain scales account for 78% of the region’s total pipeline and also dominate new hotel construction in the Middle East with 477 projects and 119,063 rooms. The luxury chain scale saw considerable growth in the third quarter, reaching a new record-high project count (173, up 7%) and rooms (40,113, up 21%).

The top country in the region was Saudi Arabia, with 317 projects (up 15%) and a record-high 79,984 rooms (up 18%), and Egypt was second with 109 projects and 26,286 rooms, which were also record-highs and increased by 20% by projects and 21% by rooms YOY. The UAE was third, with 86 projects and 23,743 rooms. The top city was Riyadh, Saudi Arabia, with 90 projects and 18,067 rooms, followed by Jeddah, Saudi Arabia, with 53 projects and 11,336 rooms. Cairo was third with 40 projects (up 21%) and 8,905 rooms (up 16%).

Through the end of the third quarter, 51 new hotels and 9,356 rooms opened in the Middle East this year (including 14 new hotels and 2,504 rooms that opened in Q3). LE is forecasting an additional 35 new hotels and 6,916 rooms to open by the end of the year. LE analysts project 107 new hotels and 27,485 rooms to open in 2025, followed by 121 new hotels and 25,030 rooms forecast to open in 2026.