UAE tops list with 55,000 hotel rooms in pipeline

With another 55,165 additional rooms planned, the UAE is leading the regional race for the largest number of hotel keys in active pipeline according to a July 2010 STR Global Construction Pipeline Report.

Dubai lands itself in the top spot as the most active city in the Middle East and Africa, with 32,686 rooms in active pipeline, of which 17,162 are in the In Construction phase.

The capital comes boasts half of that figure with 14,641 rooms in total active pipeline and 8,544 rooms in the In Construction phase.

The STR Global report indicates the MEA hotel development pipeline comprises 455 hotels, totalling 126,273 rooms for the region.

After the UAE, Saudi Arabia comes in second place with 17,283 rooms in the total active pipeline and 8,714 rooms in the In Construction phase.

Upper Upscale leads

Among the Chain Scale segments, the Upper Upscale category made up the largest portion of rooms with 27.2 per cent or 34,364 rooms in total active pipeline for the region, busting the myth that midscale and economy hotels were finally making inroads in MEA.

In fact, STR’s report indicates that midscale properties without food and beverage boasted a mere 1,015 in the region’s total active pipeline, making it the lowest in the ranks. Coming in close were economy hotels, with an existing supply of 12,926 rooms and a total active pipeline of 5,332 rooms only.

Rounding up the top three spots for STR were the Unaffiliated segment, comprising 25.5 per cent of the region’s total active pipeline or 32,167 rooms, followed by the Luxury segment at 21.5 per cent or 27,187 rooms.

Budget brands in future

Yet, despite STR’s report, hotel chains are still keenly investing in the economy model for long term gains, with the Abu Dhabi-based Rotana Group earlier announcing plans to open 25 properties of its three-star Centro brand by 2014 in the region, with five hotels based in the UAE alone.

Another five have been signed across Oman, Saudi Arabia and Lebanon, while 15 others are under negotiation for the group.

Omer Kaddouri, Chief Operating Officer of Rotana told Emirates 24|7 at the time: “We are firm believers that the midscale to economy hotels market is underserved in this region and this will indeed work in the favour of our expansion plans.”

Similarly, retail giant Landmark Group announced 12 mid-market hotels by October, after unveiling its Citymax budget hospitality concept earlier this year, signalling a Dh1 billion investment across these dozen properties, or an estimated 2,500 rooms, according to group chairman, Micky Jagtiani.

Talking about his business model at the time, Jagtiani said: “The mid-market brand has proven its resilience in these tough economic times, and we expect a good return on profits once our hotels are fully operational.”

He explained that while the luxury hotels market in the UAE was cluttered, there was still scope for the budget brand to grow here, adding: “The country is now attracting the low-cost traveller with budget carriers such as flydubai and Sharjah’s Air Arabia. We are simply creating a brand that caters to such a market.”

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