The Middle East is transforming into a popular travel destination with an abundance of luxury resorts and accommodations, as well as important cultural locations and world-class recreational attractions. The United Arab Emirates (UAE), for example, has the fastest-growing amusement park market in the Middle East North Africa (MENA) region with theme parks like Ferrari World Abu Dhabi and Warner Bros. World Abu Dhabi.
Saudi Arabia has also emphasized tourism in recent years. It aims to reduce its reliance on oil and gas as part of Vision 2030. More than 100 million tourists visited Saudi Arabia in 2023, a mark that the Kingdom had originally hoped to achieve by 2030.
As travelers worldwide have shown an increased interest and willingness to visit the Middle East, countries in the region have been prioritizing luxury hotel and resort development. The region boasts the fastest-growing hospitality sector in the world, according to a recent Lodging Econometrics (LE) study. Below is a look at the current state of the sector and some of the most impressive hotels in the region.
1. Record Development in Q3 2023
The LE study revealed that the Middle East had a record 156 luxury hotel projects ongoing during the third quarter of 2023, up 26 percent from the same period in 2022. Similarly, total hotel construction spanning all categories was up 9 percent year-over-year, to 585 projects and 139,000-plus rooms. A total of 320 of those projects were under construction as of November 2023, while more than 100 projects were slated to begin construction within the next 12 months.
Saudi Arabia led all Middle East countries with 275 projects comprising over 67,000 rooms, while the UAE ranked second with 107 projects and 27,276 rooms. Egypt (91 projects), Qatar (35 projects), and Oman (33 projects) rounded out the top five countries for hotel development in the Middle East. More than half of all hotel projects are in the following five cities: Saudi Arabia’s Provincial region (115), Riyadh (87), Jeddah (51), Cairo (33), and Doha (31). In Q3 2023, 22 hotels were opened.
2. Rising Construction Costs
There’s an abundance of planned hotel developments in the region. However, construction firms will have to navigate rising costs if they intend to complete these projects on time and under budget. According to a recent report from Currie & Brown, a global leader in cost and project management services, construction costs will rise by as much as 3 and 7 percent in the UAE and Saudi Arabia, respectively, in 2024. These projected increases follow similar increases in costs in 2023.
Inflation is the primary reason for these expected cost increases, while other factors include compliance with new sustainability regulations and a shortage of skilled workers and materials. The Currie & Brown report, however, suggests several ways in which construction firms can manage these cost increases.
“By considering sustainability, embracing digital technologies, and developing new ways of working, both will benefit from operational efficiencies,” said Currie & Brown’s Southern Gulf managing director Doug McGillivray. “This will help mitigate the impact of construction cost increases now and in the future, while creating better, sustainable built environments for all.”
3. Hotels Opening in 2024
The LE report stated 110 hotels are expected to open in the Middle East in 2024. Some of the most notable and impressive examples include the One&Only One Za’abeel and Ciel Tower in Dubai and Nujuma in Saudi Arabia. The 229-room One&Only One Za’abeel will feature a 775-square-meter penthouse and the world’s largest cantilever, which will feature more than 10 world-class restaurants. The 82-story Ciel Tower, when completed, will be the tallest hotel in Dubai. Nujuma, a luxury resort with more than 60 beach villas, retail areas, and culinary venues, will be the Middle East’s first Ritz-Carlton Reserve property. It’s located on private islands in the Red Sea.
4. Skyscraper Hotels in Dubai
While Saudi Arabia leads the region in hotel development, Dubai is the global leader in grandiose skyscraper hotels. When completed, the Ciel Tower will surpass the 75-story, 356-meter Gevora Hotel as the tallest hotel tower in the emirate. Capped by a golden spear, the 528-room Gevora Hotel opened in 2018 next to the 333-meter Rose Rayhaan by Rotana, which once held the record as the tallest hotel in Dubai. The emirate has seven of the 10 tallest hotels in the world, including the JW Marriott Marquis Hotel (355 meters) and Burj Al Arab (321 meters).
5. The Abraj Kudai in Saudi Arabia
Rather than trying to compete with skyscraper hotels in Dubai, Saudi Arabia is working to build the world’s largest hotel: the Abraj Kudai in Mecca. The planned $3.5 billion development, situated about 1 mile from the Masjid al-Haram, or the Great Mosque of Mecca, will have a dozen 45-story hotel towers comprising about 10,000 rooms. The 12 towers will be built upon a podium with a complex consisting of a shopping mall, bus station, ballroom, and multiple food courts. The MGM Grand Las Vegas is currently the world’s largest hotel, with 6,800 or so rooms.