This is the sixth consecutive quarter project counts have dropped in the region. Fluctuations in oil and gas prices, access to vaccines, the new US administration, and lack of tourism are ultimately having an impact on hotel development. The next few years will prove pivotal in this region and LE will continue to monitor and track the impact.

Projects currently under construction stand at 351 projects/113,063 rooms, a two percent by project and three percent by rooms drop year-over-year (YOY). Projects scheduled to start construction in the next 12 months dropped more drastically YOY, and are down 36 percent by projects and 41 percent by rooms YOY to end the fourth quarter at 82 projects/19,206 rooms. Projects in the early planning stage are at 109 projects/24,652 rooms, also a decrease YOY. While hotel construction has dropped YOY, hotel renovations and conversions are on the rise, hitting a project count peak in fourth quarter 2020.

In the fourth quarter, the Middle East opened only 18 new hotels accounting for 6,174 rooms, the highest hotel count in any quarter of 2020 for the region. For the year, the Middle East opened 51 new hotels/16,391 rooms. LE is forecasting 96 hotels/23,322 rooms to open in 2021 and another 138 hotels/39,929 rooms to open in 2022.

Countries with the most projects in the construction pipeline are Saudi Arabia with 186 projects/66,866 rooms and the UAE with 161 projects/45,753 rooms.  Following distantly is Qatar with 60 projects/15,030 rooms, then Egypt with 57 projects/14,168 rooms, and Oman with 34 projects/6,891 rooms. Dubai continues to lead the construction pipeline in the United Arab Emirates with 121 projects/35,837 rooms.

The Provincial region leads the Middle East with the most projects in the region’s construction pipeline with 55 projects/12,295 rooms, followed by Riyadh with 54 projects/11,179 rooms, Doha with 52 projects/12,639 rooms, Jeddah with 43 projects/9,005 rooms, and Makkah with 34 projects/34,387 rooms.