Oversupply to impact MENA hotel sector: STR Global
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The Middle East/Africa hotel development pipeline comprises 432 hotels totalling 118,454 rooms, according to the February 2011 STR Global Construction Pipeline Report.”The main activity of hotel development in the region takes place across the United Arab Emirates, Saudi Arabia and Oman,” said Elizabeth Randall, managing director of STR Global.”Selected markets will see more than half of their current supply entering the markets over the coming years. Whilst the long-term prospects for the region are good, the new supply will create more challenging market conditions for the short-term. We see a more diverse offering coming into the markets, which were so far dominated by the upscale to luxury properties”. Among the markets in the region, Abu Dhabi will report the largest increase in supply (89.4%) if every one of the 13,405 additional rooms in its total active pipeline open. Other markets to expect significant increases in existing supply include: Riyadh, Saudi Arabia (77.2% with 4,831 rooms in its total active pipeline); Jeddah, Saudi Arabia (50.5% with 3,033 rooms); Muscat, Oman (49.5% with 1,931 rooms); and Dubai, UAE (49.2% with 28,474 rooms).
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