Dubai’s hotel capacity growth on a rocketship again; Riyadh’s huge too

Dubai’s hospitality industry expects to see a double-digit growth in capacity in 2013 as the Middle East and Africa region prepares to add 150 new hotels next year, a leading global hotel industry consultancy said.

STR Global Construction Pipeline Report for the region said Dubai would see 28.6 per cent growth in hotel room capacity with 17,409 rooms in the construction pipeline. Hotel construction markets in Saudi Arabia and Oman are also forecast to see strong double-digit growth.

There will be acceleration in new hotel builds in the region in 2013 compared to 2012, the forecast said.

It said year-to-date, 46 hotels opened in the region adding 10,510 rooms.

STR Global predicts that in the remainder of 2012, 72 more hotels are to open in the region offering 18,072 more rooms, with properties in the more upmarket sectors set to dominate.

In 2013, the region is predicted to open 150 hotels offering 37,349 rooms, with the Upper Upscale segment set to add the most rooms with 9,870 rooms in 35 hotels.

A total of 493 hotels totaling 122,942 rooms are included in STR Global Construction Pipeline Report in September.

The total active pipeline data includes projects in the construction, final planning and planning stages.

STR Global data showed that more than 6,400 rooms are in Riyadh’s hotel construction pipeline making it the Middle East’s biggest market for potential growth. It said the Saudi capital’s hotel sector could grow by 84.5 per cent if all 6.413 rooms in the pipeline open while Jeddah’s hotel market is also set for major expansion of 70.7 per cent with 4,225 rooms expected to open. Muscat is poised for 60.9 per cent growth if all 2,634 rooms open and Abu Dhabi is set to see 50.7 per cent with 9,114 rooms in the pipeline.

Jones Lang Lasalle, a property consultancy company said in a recent report that Dubai’s total capacity will witness a big jump from 54,300 rooms currently available with 4,500 additional hotel rooms expected to be completed in 2012, and a total 11,000 units in supply pipeline until 2014.

“The positive upswing in tourism volumes in Dubai has raised confidence levels and following a slowdown witnessed in the last couple of years,” it said.

Cushman & Wakefield has listed Dubai among the top 25 global hotel investment destinations for 2012 in its “Winning in Growth Cities 2012-13” report. It has put Dubai, the only city in the Middle East to feature on the list, at the 16th position in the top destinations for hotel ranking.

Alpen Capital is also very upbeat on the growth prospects of the UAE hotel industry, the second largest in the GCC region after Saudi Arabia.

“While tourist arrivals in the UAE are likely to grow at a compound annual growth rate of 5.3 per cent between 2012 and 2022, hotel supply is expected to increase at 5.3 per cent from 96,992 hotels in Dubai and Abu Dhabi to 125,383 hotels in 2016,” Alpen said in its GCC Hospitality industry report.

Alpen has predicted occupancy rates in the UAE to rise to 75.per cent in 2016 from 71 per cent in 2011as the momentum of tourist arrivals growth picks up. ___

(c)2012 the Khaleej Times (Dubai, United Arab Emirates)

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