PIPELINE : MIDDLE EAST
▼ by ORIANA LERNER , CONTRIBUTING EDITOR
▼
Like Asia , development in the Middle East often gets reduced to a formula . Take one international brand and a gateway location ( especially in Saudi Arabia , the United Arab Emirates or Qatar ). Add one ultra-luxury offering . Blend well and watch occupancy and RevPAR grow steadily .
Like most stereotypes , there is more than a grain of truth in that viewpoint . According to Lodging Econometrics , the Middle East pipeline is more than 80 % in the luxury , upper-upscale and upscale segments ( calculated by room or project count ). Much of that growth is being driven by global chains like Hilton Worldwide , Starwood Hotels & Resorts Worldwide , Marriott International and IHG .
However , the future of development in the Middle East has a less homogenous face . According to Lodging Econometrics , upper-upscale leads the pipeline ( with 34 % by room count ). The buzz surrounding midscale and economy development is continuing to grow with many global brands boosting growth in the mid-tier . “ We have 22 hotels in our system across the Middle East and are looking to grow that by more than 50 % ( by number of rooms ) in the next three to five years ,” says Pascal Gauvin , COO for India , the Middle East and Africa , IHG . “ Keen investor interest has provided the opportunity for us to grow our Holiday Inn brand as well as bring Holiday Inn Express into the market .”
While these projects may not deliver the ego boost of owning an ultra-luxury hotel , their impact on the market could make for some glamorous bottom lines . One reason is size . Last year , IHG signed a deal to open the world ’ s largest Holiday Inn in Makkah in Saudi Arabia with 1,238 rooms .
Some regional brands , like Rotana , have launched midscale offerings to try to get their hands on a piece of that pie . More are likely to follow suit . As Guy Wilkinson , managing partner , Viability , Dubai , points out , the younger population of Saudi Arabia is an especially appealing target market for budget flags — particularly those that can deliver a less in-the-box experience . Even a new wave of smaller , unbranded offers akin to B & Bs are getting young travelers ’ attention and bookings .
Fairmont The Palm , Dubai Skyline , exemplifies the strong investor climate that remains in the region .
www . hotelsmag . com June 2014 HOTELS 55