New figures from the Arabian Hotel Investment Conference 2018 forecasts that $14bn in construction contracts will be awarded in 2018..
More than $14 billion in hotel construction contracts will be awarded in 2018, according to a new forecast from the Arabian Hotel Investment Conference 2018.
According to MEED projects, an online projects tracking service, the value of new hotel investments in the region could reach record highs in 2018.
“After a relatively subdued 2017 up to end of November which has seen $5.45 billion worth of new hotel construction contracts awarded, the value of hotels due to be awarded next year is more than $14 billion,” said Ed James, Director of Content and Analysis at MEED Projects. “This total would comfortably exceed the US$8.5 billion awarded in 2016 and the previous record of $11.9 billion awarded in 2015.”
“On the back of its forecasted performance, investment in hotels will comprise about 7 percent of the total $200 billion scheduled projects spending in the MENA region next year, making it one of the most important construction subsectors,” James added. “On a country basis, the UAE will be by far the largest market, with an expected $8.4 billion worth of contracts, followed by Saudi Arabia at $1.9 billion and Qatar at US$1.7 billion.”
The figures will be discussed at the upcoming 14th AHIC event in Ras Al Khaimah on April 17 to 19.
“These new figures are exciting for the Middle East hospitality investment community, which gathers annually at AHIC,” said Jonathan Worsley, Chairman of Bench Events and Co-Founder of AHIC. “With oil prices now trading significantly higher than the January 2016 lows, we expect to see signs of recovery and stability in most regional economies.”
“There is still enormous potential for hotel development in this region, particularly as the industry seeks to diversify and we foresee significant growth in the mid-market and serviced apartments segments, particularly in the UAE and Saudi Arabia,” he added.
Haitham Matter, the CEO of the Ras Al Khaimah Tourism Development Authority – which is a partner of AHIC 2018 – said that hotel investors need to rise to the challenge of changing traveller demands and the specific requirements of groups such as millennials, families and baby boomers, as well as halal travellers and those from emerging markets such as China and India.
“Investors need to understand these requirements and must also take into consideration from the outset which type of technology will drive the sector in the future – they need to consider this right at the beginning or risk becoming rapidly irrelevant,” he said.
“The biggest risk for hotel investors is not embracing the changes and challenges outlined above and expecting traditional business to keep on coming. It’s no longer a case of build it and they will come. It’s more a case of build what they want, and they will come,” he added. There’s a lot of competition on the global scene for the business of the new emerging markets. The hotel guest is now very much in the driving seat from the very design and product development phase.”For all the latest travel news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.