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Hotel projects face major delays - report

A new report claims that many of the proposed hotel projects in the Middle East and North Africa (Mena) region will either be delayed or abandoned altogether.

Around 20 percent of hotel room supply in the Mena region, particularly in the GCC, proposed for completion by 2010 will not be ready, Business 24/7 reported on Monday.
And the delay rate for those projects earmarked for completion by 2015 could be as high as 40 percent, according to an industry report by global hotel investment services firm Jones Lang LaSalle Hotel.

The total supply of hotel rooms across the Mena region during 2007-2015 is likely to be in the range of 200,000, around 35 percent less than the total number of proposed rooms.

As would be expected, most of the likely reduction in future supply is experienced in the GCC region, although some delays are also forecast in both the Levant and North Africa region.

In the overall Mena region, Jones Lang LaSalle predict that 680,000 new hotels rooms would hit the market by 2010 against the announced addition of 817,623 keys. By 2015, the Mena region is expected to add 780,000 hotel rooms, a shortfall of around 100,000 keys in the announced projects.

Jones Lang LaSalle attributed the delay to increased competition for resources (especially labour and construction materials), rising costs and tough financing due to global credit crunch.

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