MARKET UPDATE
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Labour Margin – 12 Month Rolling
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outside free zones, meaning foreigners could set up businesses just like the locals. Competition began in earnest.
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MIDDLE EAST PROMISE & PROFITS For three years running, the Middle East has been the singlemost-profitable region globally and has grown marginally year on year from 2023 to 2025. Tour and wholesaler demand segments drove the highest ADR
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Gross Operating Profit Margin – Rolling 12 – Middle East
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growth in the Middle East, while government-related bookings declined sharply, with ADR dropping over 12 % year-overyear— underscoring a structural shift away from public sector dependence toward higheryielding leisure and negotiated segments.
One might think that government spending is propping up the numbers artificially; it’ s not. The government segment is the only
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one to have contracted, while all other segments, particularly leisure, have experienced consistent growth.
Riyadh leads the region in food & beverage profitability, reaching a 48 % margin in 2025— outperforming peer markets such as Dubai( 41.3 %) and Jeddah( 36.9 %). Prices are high and costs are contained, leading to a new global performance standard in F & B profitability. This threeyear upward trend highlights Riyadh’ s rising commercial strength despite limitations like alcohol restrictions.
Egypt continues to operate with the region’ s most efficient labor model, reporting a labor margin of just 11.5 % in 2025, compared to 28.3 % in Qatar and 22.3 % in Saudi Arabia. These disparities reflect differing wage structures, employment policies and talent competition across markets. Today, both Saudi Arabia and the UAE are emerging as top destinations for hospitality professionals seeking longterm career growth and opportunity.
A deep dive into asset classes across the region reveals a picture that defies social media stereotypes— it’ s not all about glamor and luxury. Midscale properties lead the market in terms of overall profitability and are the most lucrative and fastest-growing segment. What is impressive, though, is how consistent all others are within the range, with upscale to ultraluxury hotels maintaining stable gross operating profit margins in the mid to low 40 % range.
The region is undeniably thriving with Dubai and Riyadh leading the charge, and from all social, business, leisure and other significant indicators. Barring any major disruption, there are no signs of this momentum slowing. The Middle East has firmly established itself as the world’ s leading hospitality region— and it is poised to continue advancing on this trajectory.
76 hotelsmag. com Sept / Oct 2025