X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

When it comes to hotel development in the Middle East, Dubai appears to command the most attention from the global media. Yet other parts of the wealthy region are seeing their own fair share of construction activity, particularly in Abu Dhabi, Saudi Arabia and Egypt.

A record 527 projects totaling nearly 156,000 rooms are currently in the pipeline throughout the Middle East, nearly half of which are in the upscale and luxury categories, according to a report released this summer by Portsmouth, NH-based Lodging Econometrics. Dubai accounts for roughly one-third of those pending projects, with 162 hotels totaling 60,500 rooms, many of which will open during the next two years.

“Dubai has been at it for a while. The other areas got started later,” Patrick Ford, president of Lodging Econometrics, tells GlobeSt.com. He observes that 40% of the world’s construction cranes are now there, attracted to the country’s manmade Palm Jumeirah and dazzling “starchitect” designs of high-rise commercial structures.

Among the projects making international headlines lately is the Trump International Hotel and Tower, a 62-story structure that will contain 378 hotel rooms plus 399 apartments. New York real estate mogul Donald Trump, in his first Middle East development, is working with Dubai-based Nakheel on the $1.1-billion project.

If viewed as a “city state,” Dubai would have the largest hotel construction pipeline of any metropolitan area in the world, from Las Vegas and New York to Shanghai and Beijing, Ford notes. However, he cautions that development activity might need to pause after 2010, with room capacity experiencing a “bubble” caused by the global economic slowdown as well as shortages in both construction materials and labor.

As many as 28,000 rooms are expected to open throughout the region through the remainder of 2008, with at least 43,000 more set to be unlocked in 2009, based on Lodging Econometrics’ research. “The pipeline is front-end loaded,” Ford says.

As Dubai cools down, other parts of the Middle East are expected to do the opposite, though at a smaller scale. For example, Abu Dhabi, which seeks to become the cultural center, has the second-largest pipeline with 73 projects totaling 21,800 rooms by Ford’s count.

Saudi Arabia and Oman have roughly 50 projects each, while Qatar has 35 projects in the pipeline, mostly in Doha. Egypt, which seeks to develop beachfront resorts along its “Red Sea Riviera,” has 31 projects totaling nearly 11,000 rooms, according to Lodging Econometrics.

InterContinental Hotels Group PLC made its first foray into the region this summer with the opening of the 140-room Staybridge Suites Cairo CityStars. It is working with Bukhamseen Group on two additional Staybridge projects in Kuwait, with 120 suites in Salmiya in November 2009 and 150 suites in Farnawiya in January 2010.

IHG has also signed with Aldar Properties for a 165-suite Staybridge in Abu Dhabi that will open sometime next year. That project will be part of Aldar’s $40-billion Yas Island development, which will include a Formula One racetrack along with Ferrari and Warner Bros. theme parks.

Staybridge Suites properties in the region will feature many of the same amenities as found at those frequented by American guests, including fully-equipped kitchens and free WiFi access, says Tom Rowntree, IHG’s vice president-commercial, Middle East & Africa. After-hours receptions hosted by the hotel’s general manager are expected to appeal to business and leisure travelers alike, he says.

“Staybridge Suites’ flexible approach and blend of a domestic environment with traditional hotel services is expected to bridge the gap between conventional hotels and serviced apartments,” Rowntree tells GlobeSt.com in a recent e-mail. “As such, Staybridge Suites will accommodate the needs of a broad range of travelers, from those in town on business or looking for a ‘home-from-home’ experience while on holiday, to those relocating to the area or even seeking temporary housing during household renovations.”

Lodging Econometrics notes that the Middle East hotel boom presents “an extraordinary opportunity” for global brands, with 35% of pipeline projects having yet to select a flag. Middle East-based Rotana Hotels, Inns & Suites has the largest guestroom count in the region’s pipeline, with 33 projects totaling 10,256 rooms.

IHG has eight InterContinental and five Crowne Plaza upscale hotels in the pipeline, while also accelerating its mid-market program in the region with nine new-design Holiday Inns and three Holiday Inn Express, Ford says. Among North American hoteliers, Marriott International Inc. has 23 projects in the pipeline, including seven Ritz Carltons, while Starwood Hotels & Resorts Worldwide plans a total of 21 luxury hotels, including a 342-room project in Dubai that will bear its new Baccarat luxury brand.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.