Cityscape Intelligence is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Are investment opportunities in MENA’s hospitality industry picking up?

NikkiBeachResortDubai
Signs of recovery, especially in the UAE and Saudi Arabia, could whet an appetite for investment opportunities in the hospitality industry.

In early 2020, hotel construction contracts were estimated to be worth over USD 23 billion and were expected to go to the MENA region by 2023.

But this was before the full global scale of the COVID-19 pandemic took shape. Since then, in a survey of major hotel investors in the MENA region, nearly 80% of respondents were forced to shut shop due to low occupancy rates.

On average, hotel occupancy rates across the MENA region fell 43% per 2020 estimates by Colliers International. In Saudi Arabia, revenue per available room plunged due to the pandemic. Dubai-based hotel operators expect to take 18-24 months before they return to pre-pandemic business.

A year into the pandemic, the hotel and hospitality landscape looks very different. Here’s a look at post-COVID investment opportunities in the MENA hospitality industry.

UAE AND KSA LEAD INVESTMENT OPPORTUNITIES IN MENA'S HOSPITALITY INDUSTRY

The UAE and Saudi Arabia are forecast to rebound the strongest in MENA’s hospitality industry. This is due to initiatives in tourism and infrastructure, Colliers International reported, with high hopes for Egypt’s hotel sector as well.

New hotel properties are set to open in four emirates in the UAE this year. These include Hilton Abu Dhabi Yas Island, St Regis The Palm, Address Fujairah Resort, and Hampton by Hilton Marjan Island. 

While these were already in development, there is also news of a fresh deal for the stalled Marina 101 project. That Expo 2020 is scheduled to take place this year is also expected to boost travel and tourism for the hospitality industry.

Hilton Abu Dhabi Yas Island

In Saudi Arabia, new announcements could give a boost to investment opportunities for the country’s hospitality industry. One such project is the recently announced USD 15 billion Journey Through Time Masterplan in AlUla city. The regeneration project aims to have 5,000 hotel keys by 2035. 

Combined with other similar masterplans, AlUla is expected to have potential for 9,400 keys by 2035. Investors are also looking closely at Saudi hotel investment opportunities, as the country doubles down on infrastructure projects to boost tourism and diversify the economy.

Elsewhere in the MENA region, signs of recovery are becoming apparent despite a tough 2020. In October 2020, hotels in the region recorded their highest ever occupancy levels since the start of the pandemic. 

Opportunities, such as an influx of Israeli tourists, and diversification beyond the metropolitan luxury hotels space, will only aid recovery for MENA’s hospitality industry, buffering the industry against oversupply and travel restrictions.

 

WANT MORE REAL ESTATE INSIGHT? 
Subscribe to the Cityscape newsletter here

Hide comments
account-default-image

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish