New figures show that the number of hotel rooms under contract in the Middle East and Africa expanded during October 2015. Sahel Majali discusses the implications of this news for developers that are looking to initiate hotel construction projects in the region.
Growth of tourism in the Middle East
Economic growth in the Middle East and North Africa (MENA) has held steady throughout 2015. Figures from the World Bank suggest that economic expansion in the region should measure at around 2.8% this year. The economies of countries in the Gulf Co-Operation Council, some of which lie in the Middle East, are expected to grow 3.2% in 2015.
Moderate economic growth has helped the MENA region develop a robust tourism sector. A report from The Authority on World Travel & Tourism (WTTC) shows that the direct contribution of travel and tourism to the MENA region’s GDP was US$73.7 billion in 2014. This is forecast to increase by 4.7% in 2015.
Hotel construction rises
In turn this has lifted hotel construction in the MENA countries to new heights, according to the October report from hotels research firm STR Global. International Construction Magazine reported that the study indicated that the number of hotel rooms ‘under contract’ in the Middle East and Africa grew 29.1% in the year from October 2014 – October 2015.
The STR Global research also found that there were 781 hotels ‘under contract’ for October 2015 in the Middle East and Africa – the equivalent of 195,705 rooms. Meanwhile the number of rooms that are currently ‘under construction’ in the region shot up 43.1% in the same period of time, equating to 407 hotels and 105,177 rooms.
‘Upper Upscale developments’ accounted for the largest number of hotel rooms that are currently ‘under contract’ (30.1%) and ‘under construction’ (32.6%) in the Middle East and Africa. In contrast the ‘economy’ segment accounted for the smallest number of hotels rooms ‘under contract’ and ‘under construction’ in the region during October, both at 0.4%.
Mid Contracting MENA
The MENA countries are attracting more visitors every year. This has driven demand for luxury hotel developments to new heights, incentivising developers to enter the region’s hotel construction industry. The WTTC report forecast that the direct contribution of travel and tourism to MENA GDP would expand to US$121 billion by 2025. This indicates that MENA luxury hotel construction could remain a profitable investment option for developers throughout the coming decade.
Mid Contracting MENA, has been delivering major constructing projects of the highest standards of quality and safety in the region for over 30 years. We’ve worked on a number of prestigious luxury developments such as the International Aqaba Hotel in Jordan, and the Le Royal Beirut Hotel Lebanon. This has provided us with the knowledge, skilled professionals and regional connections developers require to profit from region’s burgeoning hotel construction sector.