Dubai retains lead in Mideast hotel pipeline

Dubai retained its position as the key growth market for the hotel industry in the Middle East and Africa (Mena) region by accounting for the largest number of rooms under construction.
According to September 2015 STR Global Construction Pipeline Report, with 19,719 rooms in 67 hotels under construction, Dubai sustained its edge over other three key markets with more than 5,000 rooms under construction.
These included Makkah (16,153 rooms in 11 hotels); Doha (7,315 rooms in 30 hotels); and Riyadh (6,131 rooms in 25 hotels).
Across the Middle East and Africa region, there are 763 hotels totalling 191,047 rooms under contract. This represents a 26.3 per cent increase in rooms under contract compared with September 2014 and a 42.1 per cent year-over-year increase in rooms under construction, STR report said.
The "under contract" data includes projects in the "in construction, final planning and planning stages but does not include projects in the unconfirmed stage."
The region reported 103,749 rooms in 401 hotels under construction for the month.
A recent report by JLL Mena said Abu Dhabi is experiencing a positive growth with 5,200 rooms in the pipeline for 2017, with 2,300 set to go live by the end of 2015 alone.
JLL revealed in its  report that 45 per cent of current supply are five-star properties.  
According to Chiheb Ben Mahmoud, executive vice-president, head of hotels and hospitality group Middle East and Africa at JLL,  more than 70 per cent of hotel room supply in Dubai and Abu Dhabi is in the four- and five-star category. The proportion is higher for Abu Dhabi than for Dubai.
The JLL report revealed that hotel construction is already under way and will bring the total room count in Abu Dhabi from 20,700 at present to 26,000 by 2017. Authorities have also increased hotel guest targets for 2015 to 3.9 million instead of 3.5 million. The Abu Dhabi Tourism and Culture Authority reported a 20 per cent increase in hotel guests in the first quarter of 2015 compared to the same 2014 period.
However, regardless of the construction boom, hotels in the Middle East/Africa region reported negative results in the three key performance metrics when reported in US dollar constant currency, according to August 2015 data compiled by STR Global.
Compared to August 2014, the Middle East/Africa region reported a 1.1 per cent decrease in occupancy to 62.9 per cent, a 1.6 per cent drop in average daily rate (ADR) to $134.53 and a 2.7 per cent decline in revenue per available room to $84.57. In Kuwait  occupancy declined 7.8 per cent to 39.6 per cent; ADR was down six per cent to KWD65.75; and RevPAR decreased 13.3 per cent to KWD26.04. August supply growth (+6.2 per cent) in the country outpaced demand (-2.1 per cent). Year to date, however, demand (+8.3) has outweighed supply (+4.1 per cent). 
Oman saw decreases in the three key performance measurements with a 3.7 per cent decline in occupancy to 47.5 per cent, a 6.9 per cent drop in ADR to OMR65.19 and a 10.4 per cent decrease in RevPAR to OMR30.94.  
Doha reported decreases in occupancy (-6.7 per cent to 61.1 per cent) and RevPAR (-5.9 per cent to QAR387.24). ADR in the market was up 0.8 per cent to QAR633.75. Year-to-date supply (+2.4 per cent) has outperformed demand (+0.1 per cent) in Doha, and August produced the market's largest supply increase of 2015 (+6.3 per cent).
- issacjohn@khaleejtimes.com