Calm after the perfect storm

by ArabianBusiness.com staff writer Friday, 01 June 2007

Impressive Middle East hotel investment is expected to continue again this year, but maybe at a reduced growth rate, according to experts at the Arabian Hotel Investment Conference.

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Jones Lang LaSalle Hotels global chief executive Arther de Haast noted that since a low point in 2002, global hotel investment has increased seven times over.
"In 2004 we described the market as being in a ‘perfect storm'," he said. "This storm has now continued for three years. Although it may abate in 2007, this is only because there are fewer investment opportunities available."

After investing US $3.5 billion in hotel developments internationally last year, Middle Eastern investment was expected to reach $7 billion this year, with the biggest investors outside their borders being the UAE, Qatar and Kuwait.

"The region will continue to achieve sustained growth in the hotel sector," de Haast predicted, citing the growth in air-based travel to the region, the rise in branded real estate, increased religious tourism, growing demand for leisure travel and higher international involvement in Middle East-based business as key drivers of growth.

"We foresee the current situation will remain favourable; the growth in demand can support the growth in supply in the future," he said, adding that there may be a reduced rate of RevPAR growth.



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