Middle East and Africa (MEA) Leads Hotel Pipeline Growth in Q3
SUMMARY – MIDDLE EAST AND AFRICA LEAD GLOBAL HOTEL PIPELINE GROWTH, WHILE EUROPE AND AMERICAS EXPERIENCE DECLINES. COVID-19 IMPACTS TRAVEL AND TOURISM INVESTMENTS, HIGHLIGHTING THE IMPORTANCE OF HOTEL DEVELOPMENT.
The Middle East and Africa emerged as the sole region globally to witness an increase in hotel pipeline activity during the third quarter, according to data from hospitality industry analytics provider STR.
In September, the Middle East and Africa experienced a 2% rise in total hotel rooms under contract, reaching 243,613, as reported by STR’s monthly data. According to STR, the majority of hotel pipeline growth in the region is concentrated in the Middle East.
UAE Hotels Benefit from FIFA World Cup
According to the report, Saudi Arabia and the UAE were at the forefront of hotel pipeline activity in the region, with 39,070 and 32,373 hotel rooms respectively. The FIFA World Cup, held in Qatar, promises a thriving period for UAE hotels in the last quarter of 2022. With limited accommodation in the neighboring host country, thousands of fans are expected to flock to the Gulf country.
During the four-week football tournament, major local and international hotel chains in the UAE are expected to operate at or near full capacity, according to top hospitality executives. Strong forward bookings for November and December contribute to this optimistic outlook.
READ: Hotel pipeline down globally, except for Middle East & Africa
Saudi Arabia plans to deliver 310,000 completed hotel rooms by 2030, aiming to develop its hospitality market for domestic and international tourism, according to a report by global property consultancy Knight Frank. The estimated cost for this supply delivery is approximately $110 billion.
In September, the number of hotel rooms under planning in the Middle East and Africa increased by 19% year-on-year to 74,510, as per STR data. However, construction activity in the region decreased by 3% to 130,956 rooms, with those under final planning declining by 6% to 38,147 rooms during the month.
Europe Sees Decline in Hotel Pipeline Activity
Europe witnessed the most significant decline in hotel pipeline activity among global regions in September, as reported by STR. The company did not provide an explanation for this decrease.
The total number of hotel rooms under contract in Europe decreased by 8% to 505,057 rooms. The region’s total rooms under construction were led by Germany and the UK, with 38,676 and 29,471 rooms respectively. Construction activity in Europe declined by 14% to 197,884 rooms, and those under final planning dropped by 16% to 144,277 rooms, according to STR data.
Americas Experience Decrease in Hotel Pipeline Activity
The Americas recorded the second-largest decline in overall hotel pipeline activity globally in September, with the region’s total number of hotel rooms under contract declining by 5% year-on-year to 740,443, as per STR data.
During the period, the number of hotel rooms under construction in the Americas decreased by approximately 9% to 207,585, while those under final planning dropped by 18% to 203,069. The majority of rooms under construction in the region are located in the US, followed by Mexico and Canada.
Asia-Pacific’s Hotel Pipeline Activity
In Asia-Pacific, the total number of hotel rooms under contract declined by around 4% to 904,249 in September, according to STR data. While hotel rooms under construction in the region increased by nearly 2% to 485,250, those under final planning decreased by 26.3% to 131,427. China has the highest number of rooms in construction in the region, followed by Vietnam.
Impact of Covid-19 on Travel and Tourism Investments
Global capital investment in travel and tourism experienced a significant decline due to the Covid-19 pandemic. Investments fell by about a quarter to $805 billion in 2020 from $1.07 trillion in 2019. Data from the World Travel and Tourism Council indicates a further 7% decline in investment in 2021, reaching $750 billion. Investment in hotels plays a vital role in the overall development of the travel and tourism sector.
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