Middle East to Drive Global Hospitality Expansion with $1.9 Trillion in Projects
The Middle East is poised to become a pivotal force in the global hospitality and residential sectors, with projects worth a staggering $1.9 trillion driving transformative growth, according to a report released ahead of a major industry conference.
Saudi Arabia, the UAE, and Egypt are leading this transformative wave, representing a substantial 90 percent of the total investment, equivalent to $1.7 trillion, as revealed in research conducted by real estate consultants Knight Frank.
These insights come ahead of the eagerly anticipated Future Hospitality Summit, scheduled to take place in Abu Dhabi from September 25 to 27.
The report highlights Saudi Arabia’s prominent position in regional investment, with projects valued at an impressive $1.2 trillion. The UAE and Egypt follow closely, with investments amounting to $300 billion and $200 billion, respectively.
These ventures reflect the Middle East’s ambitious aim of attracting 160 million tourists annually by 2030.
Turab Saleem, Partner and Head of Hospitality, Tourism, and Leisure for the Middle East and North Africa at Knight Frank, emphasized the region’s remarkable growth in the travel and tourism sector. In 2023, this sector saw a remarkable 46.9 percent increase in its contribution to the gross domestic product, the highest of any region worldwide.
Saleem noted, “This growth is being driven by a 14.5 percent increase in the number of jobs supported by the sector and a more than $107 billion increase in its overall contribution to the gross domestic product. Moreover, the sector has also created 0.9 million new jobs.”
Global commercial real estate experts Colliers also provided insights into the current landscape, revealing numerous advanced-stage negotiations in the hospitality sector. Several high-profile properties are poised for acquisition in the coming months.
James Wrenn, Executive Director and Head of Capital Markets, MENA, at Colliers, stated, “There’s a strong appetite for the hospitality asset class—particularly in Dubai and Ras Al Khaimah—from regional and international investors, buoyed by strong operating performance last year and the continued enhancement of the UAE as a top-tier international tourism destination.”
Hala Choufany, President of global hospitality consulting firm HVS, expressed optimism about the industry’s growth in the region.
Choufany said, “The number of quality hotel rooms in the region grew fivefold from about 100,000 in 2010 to 540,000 in 2022, with occupied room nights growing from 27 million to 135 million. An additional 180,000 keys are expected to enter the region over the next five years, which is forecast to increase occupied room nights to 184 million by 2028.”
She added, “Today, the Middle East is expected to achieve higher growth compared to other regions, presenting attractive financial returns and providing long-term investment opportunities.”
The upcoming Future Hospitality Summit in Abu Dhabi promises valuable insights from over 100 industry leaders who will delve deep into the investment opportunities within the region’s burgeoning tourism sector. The summit is being held under the theme “Focus on Investment,” and it is expected to be a pivotal event for the industry.
