Regional hospitality industry has been at the forefront of hotel performance recovery and is witnessing unprecedented growth according to market insights released ahead of the Future Hospitality Summit in Dubai
Dubai, UAE. 7 September 2022. Global independent real estate consultants, Knight Frank and premium data benchmarking, analytics and marketplace insights provider for the hospitality industry, STR, have shared key hospitality investment insights ahead of the Future Hospitality Summit (FHS) taking place at Madinat Jumeirah in Dubai from 19-21 September 2022.
Set to reach – and potentially surpass- pre-pandemic levels of more than 100 million tourist arrivals and over USD 270 billion in revenue contribution in 2022, according to data from Knight Frank, the Middle East’s travel & tourism sector has all the positive indicators to reach the goal of 160 million tourists in 2030, driven by the region’s giga projects that will open up even more amazing tourism destinations and further boost travel and tourism.
“The region is going through a fascinating transformation in the hospitality sector, with over 600,000 hotels rooms in the planning and development stage. This quantum of development, which has not been seen before in the Middle East or even globally, is set to change the shape of the region’s tourism industry in the years to come and will help to further raise the region’s profile as a one of the world’s key hospitality players,” said Turab Saleem, Partner & Head of Hospitality, Tourism & Leisure – MENA at Knight Frank.
The successful management of mega events has proven to be a key driver in the growth in tourism and hospitality, with the UAE welcoming almost 24 million visitors to Expo 2020 Dubai – amid the global pandemic — boosting international traveller confidence as stated by Knight Frank. With 65,000 hotel rooms under development in Dubai, tourism contribution is set to reach 15% of GDP by 2030: the highest in the region and among the highest in the world, with an international average of 9%.
The Middle East has been at the forefront of hotel performance recovery throughout the pandemic according to data from STR, and that momentum continues in 2022 and beyond.
Looking at the Future Hospitality Summit’s host city Dubai, Philip Wooller, Senior Director Middle East & Africa at STR said: “Dubai is having a tremendous year with hotel RevPAR for the year-to-date period up to July, 23% higher than 2019. With most destinations in the region rebounding and in many cases surpassing pre pandemic performance levels, investor interest remains high, of which the proof is in the hotel pipeline. The success of Expo 2020 in Dubai and a keen interest in Saudi Arabia and the transformative Vision 2030, have boosted investment and fueled the hotel pipeline in the region. With the first mega projects nearing their first phases of completion and new ones being announced, the Kingdom is now firmly among the fastest growing countries globally for hotel development.”
The hospitality market in Qatar is expected to reach USD 54 billion by 2030, according to Knight Frank. “Hosting the FIFA World Cup is a great opportunity for Qatar to develop its tourism sector to new heights. The country has allocated USD 45 billion worth of funds for tourism and travel growth by 2030. Presently, there are over 56,000 hotel rooms under development with an estimated value of USD 7 billion with international brands representing 62% of the inventory in the pipeline,” said Saleem.
The Kingdom of Saudi Arabia, which has USD 110 billion worth of hotel projects planned for completion by 2030 and a total of 310,000 hotel keys under development, has one of the most ambitious tourism targets in the region with the goal of 100 million tourists by 2030.
The pandemic undoubtedly cast uncertainty upon the hospitality landscape with hotel investment impacted over the past few years, but market sentiment has significantly improved and, given the GCC’s aggressive growth plans in tourism and hospitality which are well-supported by its national airlines, the outlook for the sector is bright.
“Hotel performance for the Middle East region is getting close to a full pre-pandemic recovery in 2022 which would be an outstanding outcome,” added Wooller. “Hotel rates are the main driver of RevPAR so far with occupancy also closing in on 2019 levels. Meanwhile, anticipation is high for the upcoming World Cup in Qatar and the effect it will have on both national and regional hotel performance.”
The region’s hospitality investment outlook, hotel performance and tourism plans will be discussed in detail at FHS in Dubai next month, with more than 120 top level speakers and over 40 sessions in a range of different formats including keynote presentations, workshops and panel discussions.
