There has been a projection that there will be 158,714 new rooms in 554 hotels in the Middle East. These rooms are already in contract and implementation would start soon.
The latest Pipeline Report from STR (a data provider) shows that the contract figures for the Middle East in October 2016 shows an 11.7% increment in rooms compared to October 2015.
The contract data includes project in the in construction, planning stages and final planning. However, it doesn’t include projects that are unconfirmed.
In the Middle East, data for hotels under construction shows there are 84,477 rooms in 260 hotels in construction, marking a 9.1 % increase year-on-year.
Among key markets in the Middle East and Afirca, Makkah in Saudi Arabia is known to have the most rooms in construction (24,090 rooms in 15 projects).
Apart from Saudi, Dubai is the only other market to report more than 10,000 room in construction (with the city reporting 19,687 rooms in construction across 67 hotels).
HotStats (another data provider) stated that (in a report last week) the challenges faced by hotels in Dubai. It also said that these challenges force hoteliers to cut cost in order to reap higher profits. Lower demand also caused hotels to cut rates and in September 2016, room rates fell at 6.5% year-on-year.