Dubai, Abu Dhabi to dominate new hotel openings

The Middle East will see 99 new hotels and 25,829 hotel rooms open in 2009, followed by 110 hotels and 31,725 rooms in 2010, with a majority of these openings in Dubai and Abu Dhabi, according to Lodging Econometrics, a global firm tracking all hotel real estate, including the development pipeline and the sale and transfer of lodging real estate.

"The global economic crisis, which has affected credit availability and caused decreases in consumer and business travel, resulting in occupancy and room rates declines throughout Emea, is having a serious impact on lodging development," Lodging Econometrics said in its report.

"New openings in the Middle East and Africa are poised to accelerate each year into 2011," the report said. It said total new openings in Europe for 2009, at 277 hotels and 38,879 rooms, will be down 10 per cent from 2008. Whereas, guest rooms are expected to bounce back and set a new high in 2010, with 278 new hotels and 47,464 rooms scheduled to open.

Further, at 477 hotel projects and 142,702 hotel guest rooms, the Middle East's total pipeline has fallen 14 per cent and 13 per cent, respectively, from a peak in the second quarter of 2008, as per the findings.

Also, with more than 53 per cent of the region's total projects currently under construction, new hotel openings in the Middle East are expected to accelerate in 2009, 2010 and into 2011 "as large, iconic projects come online", the report said.

The pipeline in Dubai alone stood at 124 hotel projects and 48,558 guest rooms, representing 34 per cent of all guest-room developments in the region, according to the report.

It said Dubai's average hotel project size is 392 rooms, "one of the highest for any country or market worldwide, second only to Las Vegas".

At the same time, Dubai-based market research firm Proleads had said recently the economic slowdown has resulted in the cancellation of about 6,500 rooms in the UAE in 2009, with about five per cent of the 893 planned hotel projects been cancelled.

The UAE, meanwhile, accounts for a majority – 62 per cent – of the planned 893 projects in the GCC, followed by Saudi Arabia at 17 per cent.

According to Proleads data, while 14 per cent hotel projects in the UAE are on hold, 15 per cent are in design stages, eight per cent planned and nine per cent completed.

The Proleads data further revealed that currently Gulf countries are constructing 306 new hotels, with 108,600 rooms budgeted at $140 billion (Dh514bn). "With an average completion period of two to three years, 108,600 rooms should come online by 2011," Emil Rademeyer, Director of Proleads, recently told Emirates Business.

He said the UAE hotel sector will see about $20bn of cash flow into hotel projects under execution in the UAE in 2009.