Each week, HotelNewsNow.com provides a news roundup from a different world region. Today’s roundup focuses on the Middle East/Africa region.
The Middle East/Africa hotel development pipeline comprises 494 hotels totaling 126,606 rooms, according to the April 2012 STR Global Construction Pipeline Report. STR Global is a sister company of HotelNewsNow.com.
Among the chain-scale segments, the upper-upscale segment accounted for the largest portion of the total active pipeline with 31.5% and 39,844 rooms. Three other segments each accounted for more than 15% of rooms in the total active pipeline: the luxury segment (20.6% with 26,102 rooms); the upscale segment (+20.1% with 25,486 rooms); and the unaffiliated segment (16.1% with 20,384 rooms).
HotelNewsNow.com featured several reports from the Arabian Hotel Investment Conference in Dubai last month, including:
- Hoteliers remain optimistic about hotel development in the Middle East, despite complications from the Arab Spring.
- Banks remain finicky about lending in the Middle East region.
- Hoteliers are cautiously optimistic over the direction of the region’s hotel sector.
Africa hotel development
Global hotel companies have set their sights on what might be the last frontier for the hotel sector: Africa.
Jalil Mekouar, managing director for the Middle East and Africa with Jones Lang LaSalle Hotels, said the continent provides a wealth of opportunities for the industry, especially as the middle class grows. Development is picking up, sources said.
“We see tangible opportunities in new markets such as Chad and Sierra Leone as well as Angola, Zambia and Mozambique,” Jan Van der Putten, VP operations, Africa and Indian Ocean at Hilton Worldwide, said in an email. “Nigeria, where Hilton has enjoyed a presence for 25 years, continues to prove attractive, and we have plans to open a further two properties in the country within the next two years. Ultimately, Hilton Worldwide’s long-term ambition is to have a hotel in every key city in Africa.”
GCC economy hotels needed
The economy segment in the Middle East might have missed out during the Gulf’s decade-long hotel building boom, but as the economy slowly recovers, sources said the time is right to play catch up.
“It is naturally becoming more urgent because of the increasing appeal of such an investment given the growing demand for mid-market and budget products throughout the economic cycle,” said Elie Younes, The Rezidor Hotel Group’s area VP of business development for the Middle East/North Africa region.
A rising middle class is hungry for more affordable roomnights, sources said, adding that many travelers in the Gulf Cooperation Council are not willing to pay more than $100 to $200 per night, but budget offerings are few and far between.
Qatar National Hotels Company rebrands
Qatar National Hotels Company has rebranded as Katara Hospitality, according to a gulfnews.com report.
The company said its decision to implement a new corporate identity reflected its international expansion plans and was in line with Qatar's 2030 plan for economic diversification.
Katara Hospitality, which counts the iconic Raffles Hotel Singapore and Le Royal Monceau Raffles hotel in Paris among its assets, plans to move forward through a combination of organic growth and a series of mergers and acquisitions.
"Absolutely, it is the right time to look at possible mergers and acquisitions in Europe and the U.S.," said Sheikh Nawaf Bin Jassim Bin Jabor Al Thani, chairman of Katara Hospitality, on the sidelines of the Arabian Travel Market in Dubai. "We are a cash rich company, and we will be investing from that cash. After about five or six years we will start to deleverage our assets because in that time we plan to consume our capital," he added.
A report from HVS’s office in Dubai found airport passenger movements in the region bordered on a double-digit decline during 2011, exacerbated by the relapsing global economic turmoil in the second half of the year.
However, cities throughout the Middle East are not standing idly by, contributing a combined $104 billion in airport expansions. With a 6% share of worldwide tourist arrivals, the Middle East is expected to contribute a greater share as regional airlines continue their projected growth and dominate the airspace.
Development and other news
- Hilton intends to open 14 hotels in Saudi Arabia, according to a report from The National.
- Starwood Hotels & Resorts Worldwide is temporarily moving its global headquarters to the Middle East for a monthlong managerial endeavor in 2013.
- Hyatt Hotels Corporation is planning the 257-room Hyatt Regency Riyadh in Saudi Arabia; the property is scheduled to open in 2013.
- Starwood intends to open 40 hotels in the Middle East/North Africa region during the next five years and is planning three hotels in Dubai: a St. Regis hotel; W Hotel; and Westin, which will comprise a total of 1,675 rooms and are scheduled to open in 2017.
- Starwood also is planning a new-build in Iraq: the 221-room Sheraton Erbil is scheduled to open in 2015.
- The 252-room Fairmont Ajman is scheduled to open in the United Arab Emirates early in 2013.
- Shaza Hotels, in partnership with Kempinski, is planning the 130-room Shaza Salalah in Salalah, Oman.
- Meliá Hotels International has opened the 164-room Meliá Dubai; this is the first hotel under the Meliá Hotels & Resorts brand in the region.
Compiled by Shawn A. Turner.