GCC and North Africa Hotel Pipeline Reaches US$90 Billion, Adding 200,000 New Rooms

The hospitality sector in the GCC and North Africa is experiencing significant growth, with an estimated US$90 billion invested in hotel and resort projects. This expansion is projected to add 200,000 new rooms, increasing the region's total hotel supply by 27 percent, as per figures from global consultancy HVS.

Regional Contributions

Saudi Arabia is spearheading this development, accounting for approximately 110,000 rooms currently under development, representing about half of the regional pipeline. Major projects are concentrated in Riyadh, Makkah, Madinah, Diriyah, NEOM, the Red Sea, and AMAALA. Egypt follows as the second-largest market, with around 42,000 rooms in its pipeline across Cairo, the North Coast, and Red Sea destinations. The UAE, despite being a more mature market, ranks third, with new projects in Dubai, Abu Dhabi, and Ras Al Khaimah, including developments like Wynn Al Marjan Island.

Development Trends and Funding

HVS highlights that over 55% of these upcoming hotels are slated for delivery by 2030. Currently, 88,000 rooms are under construction, with another 25,000 in final planning stages. The development approach is evolving, with an increasing focus on mixed-use developments, branded residences, and phased delivery models to optimize project economics and manage risk. Funding structures are also diversifying, moving beyond traditional developer equity and bank financing. In Saudi Arabia, government-backed investment vehicles and strategic public-private partnerships are crucial for large-scale destination projects. Across the wider region, developers are integrating branded residences and mixed-use components to broaden revenue streams.

Market Segmentation and Future Outlook

The pipeline includes a diverse range of hotel products, from pilgrimage-focused accommodation and luxury resorts to branded residences and upper midscale options. While luxury and upper-upscale hotels currently dominate planned supply, there's a notable increase in the upper midscale segment, particularly in Saudi Arabia, with brands like Hampton by Hilton and Holiday Inn Express expanding. HVS stresses that future success will depend on factors beyond just room numbers, including connectivity, infrastructure, talent, operational standards, and guest experience, as destinations compete for international visitors and investment.