A booming project pipeline will increase competition in the Middle East’s fierce hospitality market, and a drive to be different will create new challenges for contractors

The pace of growth in the Middle East’s hospitality sector is being driven by Saudi Arabia and the UAE. Evidence suggesting this building boom will continue into the year, which bodes well for contractors engaged in hospitality projects across the region.

Analysts say the number of hotels and resorts in the Gulf’s pipeline has steadily grown for 16 consecutive quarters, with the Middle East boasting close to 600 projects in the hospitality space that are yet to open their doors to customers.

We can expect to see more than 170,000 rooms added to the region’s market, according to Lodging Econometrics. As two of the largest economies in the Gulf, it is no surprise to see that the UAE - driven by Abu Dhabi and Dubai – and Saudi Arabia are leading the continued market growth.

More than 80 hotels are expected to be built in the kingdom’s cities of Riyadh, Jeddah, Makkah, and Al Khobar this year alone. Hilton is expected to be one of the busiest operators and will open three hotels: one each in Jabal Omar development, Riyadh, and Al Khobar. Rotana will also expand into Saudi Arabia as the kingdom continues to undergo a profound economic transformation that opens up exciting business opportunities.

Dubai is expected to lead the high-end segment of the hospitality market to uphold its reputation as a city of unparalleled luxury. Construction Week’s Knowledge Partner, Lacasa, says Dubai is where the major growth opportunities lie for hospitality projects. But construction consultancy WSP has warned that this position will lead to greater competition in the industry, forcing developers to work harder to differentiate their properties. 

Dean McGrail, director of property and buildings at WSP tells Construction Week that cantilevered restaurants, hanging bedroom suites, multi-level swimming pools, and internal waterfalls will be something contractors may have to start building more of in the near future.

We can also expect to see more drones take to the skies above the sites of the hotels under construction in the Middle East, according to ASGC’s chief information officer, Herbert Fuchs. In this Special Report, the contracting giant’s tech leader outlines ASGC’s plans to use technology to become more competitive in every phase of work, including its portfolio of ongoing hospitality projects.
Fuchs says ASGC invests a small – but crucial – part of its annual turnover every year in disruptive technologies, which has allowed it to become “more productive, efficient, and cost-effective” in how it delivers projects, including the Taj Hotel in Jumeirah Lakes Towers and the Waldorf Astoria Palm Jumeirah.

As economic diversification efforts continue to gather momentum in the Middle East, it looks likely that hotel construction will be among the many segments set to benefit from the continued expansion, creating challenges and opportunities for contractors.