Saudi Arabia and UAE account for 90% of hospitality investment in the Middle East
The Middle East is witnessing hospitality and residential projects worth $1.9 trillion being developed across the region, with Saudi Arabia, the UAE and Egypt accounting for 90% ($1.7 trillion) of the investment table, according to new findings released as the Future Hospitality Summit takes place in Abu Dhabi, UAE (September 25-27, 2023).
A study by global independent real estate consultants Knight Frank reveals that Saudi Arabia is at the top of the region’s project investment chart, with $1.2 trillion worth of developments in the pipeline, followed by the UAE ($300 billion) and Egypt ($200 billion).
Turab Saleem, Partner and Head of Hospitality, Tourism and Leisure – MENA at Knight Frank, said: “The Middle East was the first region globally to make a complete business recovery after the pandemic.
“While much of the world still faces challenges in its return to normality, this region is set to surpass pre-Covid levels in terms of hospitality and tourism-related revenue and employment.
“The Middle East’s travel and tourism sector witnessed tremendous growth with a 46.9% increase in its contribution to GDP in 2023, the highest of any region in the world. This growth is driven by a 14.5% increase in the number of jobs supported by the sector and a more than $107 billion increase in its overall contribution to the GDP. Moreover, the sector has also created 0.9 million new jobs,” Saleem added.
Quick to market
According to global real estate consultancy Colliers, a significant volume of hospitality-related transactions in the Middle East region is currently at an advanced stage of negotiation, with high-profile properties expected to change hands in the coming months,
James Wrenn, Executive Director and Head of Capital Markets, MENA at Colliers, said: “There’s a strong appetite for the hospitality asset class – particularly in Dubai and Ras Al Khaimah – from regional and international investors, buoyed by strong operating performance last year and the continued enhancement of the UAE as a top-tier international tourism destination.”
According to Wrenn, global sentiment remains subdued as the effects of high inflation, rising interest rates and looming fears of recession have affected the confidence of investors and reduced activity levels.
“Buyers are scrutinising transactions more closely, and there remains a gap between buyer and seller expectations. Across many markets, it is accepted that yields will need to soften further to enable pricing to stabilise in line with interest rates.”
Organised by The Bench and being held at Hilton Abu Dhabi Yas Island Future Hospitality Summit, it is being attended by 1,000+ hospitality investment decision-makers from 350+ leading companies from across the globe.
Attendees are learning about innovative investment trends and groundbreaking insights, all under the theme ‘Focus on Investment’, with content tracks including investment, operating models, innovation, the future of tourism, and ESG.
The Middle East aims to reach 160 million annual tourists by 2030.
Featured image: Future Hospitality Summit 2023 is taking place at Hilton Abu Dhabi Yas Island. Image: FHS
Last Updated on 9 months by Arnold Pinto
