GCC to spend $1.17b on hotel projects in 2010

DUBAI — Hospitality industry in the GCC remains vibrant despite the general global downturn with the total spend on hotel projects in the pipeline estimated to be more than $1.17 billion this year, a report by research company said on Sunday.

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Published: Mon 17 May 2010, 11:19 PM

Last updated: Mon 6 Apr 2015, 11:08 AM

The UAE, which is witnessing a resilience in the hotel industry, will lead the regional hospitality boom by accounting for $463.8 million investments this year, said a report by a leading research firm Proleads.

The report made for The Hotel Show, which will run in from 18-20 May 2010, said Oman will outstrip Saudi Arabia this year by spending $269.2 million in new hotels projects compared to the Kingdom’s $245.5 million.

However, the trend will change in 2011 when Qatar leads the rest of the GCC with an estimated spend of $100.3 million, followed by Bahrain with $65.3 million and finally Kuwait with $31.7 million.

In its latest report, Proleads revised upwards the expected total spend on active hotel projects under construction but due for completion by 2013 throughout the GCC to $7.8 billion from $7 billion it forecast earlier this year mainly due to new project announcements in Qatar and Saudi Arabia. Most of the new projects are in the UAE ($4.34 billion) followed by Saudi Arabia ($1.74 billion), Qatar ($923 million), Bahrain ($463 million), Oman ($300 million) and Kuwait ($90 million).

A recent study by STR Global also shows that the UAE continued to post the largest number of rooms in the total active pipeline with 52,566, followed by Saudi Arabia with 14,178. The report said that the region currently boasted more than 576,544 hotel rooms with a further 71,331 rooms under construction.

“At a time when the US and countries in Europe are preparing stringent austerity measures, to reduce their budget deficits and repay billions in loans, the Middle East region is powering ahead,” said Ray Tinston, Sales Director, The Hotel Show.

“The fact that there has been an 11.4 per cent increase in the value of projects, once again highlights that the development of the regional hospitality sector continues unabated, it is quite clearly sustainable,” said Tinston.

The latest report by hospitality consulting firm Viability suggests that nearly half of the hotels in the GCC hotel development pipeline have been delayed by between one and four years. About 48 per cent of the hotels surveyed had been delayed. “Overall the GCC hotel development pipeline is down by 20 per cent. There are 282 new properties due to open from 2010 to 2015, down from 325 in 2009, said a report by Viability.

Analysts said several projects have been delayed on concerns about hotel oversupply and the effect that would have on occupancy levels and average room rates. A recent Deloitte analysis of STR Global hotel data revealed that revenue per available room (RevPar) rates in the Middle East dropped to $131.42 during the period year-to-date February 2010, from $151.51 during the corresponding period in 2009.

“However compared to the rest of the world those figures stack up well,” said ,” said Tinston.

Europe recorded an estimated rate of $72.05 with $79.65 in Asia Pacific, during the same period. An important factor going forward will be what happens in the global and regional economies to encourage people to travel and impact hotel occupancies.issacjohn@khaleejtimes.com



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