GCC's hospitality sector has $104.4b projects under way

Aided by upcoming events, robust fundamentals and government efforts, the hospitality sector in the GCC is anticipated to recover on the back of sustained rise in tourist arrivals and a robust pipeline of hotels and serviced apartments.

With the GCC hospitality industry remaining firm on its projected annual 7.6 per cent growth trajectory, the region is pressing ahead with projects with a combined value of $104.4 billion despite the headwinds posed by falling oil revenues, tourism industry experts said.
A bulk of the tourism and hospitality projects underway are in the UAE and Saudi Arabia, collectively valued at $23.5 billion, as the region's hospitality market is expected to grow at a 7.6 per cent compound annual growth rate to $36.7 billion in 2020 from an estimated $25.4 billion in 2015.
Organisers of the upcoming Hotelier Summit UAE & KSA said the regional governments support the tourism sector that they consider as a strong economy growth driver. Several measures have been taken such as building new attractions, involving private investments, and launching several international promotional campaigns. Of the ongoing projects in GCC, 15 of them are either in UAE or Saudi Arabia.
Analysts at Alpen Capital said in the long-term, aided by upcoming events, robust fundamentals and government efforts, the hospitality sector in the GCC is anticipated to recover on the back of sustained rise in tourist arrivals and a robust pipeline of hotels and serviced apartments.
Backed by an active tourism market, the GCC hospitality industry remains firm on its growth trajectory. Though drop in oil prices and currency depreciation is currently affecting demand, the sector's long-term outlook remains strong, Alpen said.
Government measures to bolster tourism activities in the region like encouraging private sector investments, building new attractions, expanding airport capacity, and increasing international promotion campaigns are providing impetus to the growth of the hospitality sector in the region, Alpen said.
A thriving segment of meetings, incentives, conferences, and exhibitions (MICE), spate of technological advancements, and brisk development of midscale hotel properties are amongst the key factors elevating the appeal of the GCC hospitality sector, she said.
The GCC region holds one of the largest hotel development pipelines in the world. Driven by the bright prospects of the tourism industry and government support, international hotel chains as well as domestic players have laid down robust hotel and serviced apartment development plans.
Dubai is likely to witness an addition of nearly 57,000 rooms in hotel and serviced apartments in the five years to 2020, whereas Saudi Arabia has a pipeline of over 47,000 rooms. Addition of such massive capacity is expected to extensively scale up the region's hospitality sector. Large-scale international events, upcoming tourist attractions, and a growing MICE market are likely to accelerate tourist arrivals to the GCC region. International tourist arrivals to the GCC are anticipated to grow by 5.7 per cent annually in the next four years to 2020, Alpen said.
Ganesh Babu, Director, India & Middle East, IDE, organiser of the Hotelier summit, said the event's previous edition in Qatar had such a huge impact and generated a lot of good echoes among participants and in media as well as important business deals. "We could present more than 345 projects and reunite over 120 hotel owners, operators, developers, architects, interior designers, consultants and service providers."
- issacjohn@khaleejtimes.com