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Movenpick Hotel Dubai Media City ... to open in 2017.

Local, global brands drive GCC boom

01 November 2015

As business and tourism continues to flourish in the Gulf, key players are responding to demand with as many as 533 new hospitality projects set to open before the end of the decade.

The number of hotels planned in the coming years in the Gulf region is at an all-time high with some 533 hotels and hotel apartment buildings representing 135,591 keys to be opened by 139 international and regional operators across the six GCC states mostly by 2018, says a leading research report.

The UAE city of Dubai tops the city rankings with nearly 40,000 keys in the pipeline, followed by Makkah and Riyadh in Saudi Arabia and Doha, Qatar, in the 14,000 to 15,000 range. The survey by Viability, a Dubai-based hospitality and property consultancy, shows an unprecedented acceleration in growth in 2015 figures, with the hotel rooms in the pipeline growing by 47 per cent and the number of hotels jumping by 52 per cent, compared to 2014, also a record year.

Guy Wilkinson, director of Viability, comments: “Some 77 companies we surveyed confirmed new hotel projects. This is 55 per cent of the total.

“In the main chain ranking, which is by the number of confirmed keys under planning or development, there were an impressive 26 operators with more than 1,000 rooms each under development, compared to the previous peak of 23 companies in 2009. The average number of keys per property under development was 254.”

Amongst the top chains making this list, Hilton Worldwide beat the rest. The operator has 15,583 keys in the pipeline, the largest ever registered in the survey’s history. The nearest an operator ever got to that was 10,472 rooms set by Marriott International in 2009. Hilton’s 47 pipeline hotels put it in pole position in the ranking by number of properties as well.

The second and third places in the rankings measured by both keys and properties went to AccorHotels (9,849 keys in 41 properties) and Marriott (8,707 in 34), respectively.

The top 10 list by keys was completed by Millennium and Copthorne Hotels, Starwood Hotels and Resorts, Rotana Hotels, InterContinental Hotels Group, Rezidor Hotel Group, Golden Tulip Hotels, Resorts and Suites, and Wyndham Hotels and Resorts. Abu-Dhabi-based Rotana was the only local chain in the top 10.

However, a number of increasingly strong regional players have made it to the top 20. These include three Dubai operators — The Address Hotels + Resorts (at No 13), Auris Hotels (14), Jumeirah Group (15), Katara Hospitality (formerly Qatar National Hotels, 19) and new Abu Dhabi chain Jannah Hotels and Resorts at No 20.

Wilkinson says the pipeline is still dominated by luxury products, with some 59 per cent of the pipeline keys to be rated five-star, 31 per cent four-star, and just 10 per cent three-star.

The newly opened Marriott Makkah ... the Holy City has 31 chain hotel projects, many boast large capacities of between 500 and 800 keys.

In country-wise ranking, the UAE has pipped Saudi Arabia with more than 55,000 keys or 41 per cent of the total, compared to the kingdom’s 52,000 (38 per cent). All the other GCC states together account for the remaining 21 per cent. Amongst the last four, Qatar boasts the region’s third largest, comprising more than 14,000 keys, or 10 per cent of the total.

Not surprisingly Dubai has topped the city rankings. The hot tourist destination has 39,571 pipeline keys, compared to 28,419 last year. The second, third and fourth places are pretty well neck and neck, with Makkah promising almost 15,000 keys, and Riyadh and Doha producing just over 14,000 each. Jeddah also has a major pipeline comprising almost 12,000 keys.

In the bottom half of the top 20, the presence of smaller towns in the UAE, Oman and Saudi Arabia — namely Al Ain, Fujairah, Salalah, Jizan, Ajman and Al Ahsa — signals the spread of the pipeline well beyond the large cities.

“Looking at the top eight markets, which are all major cities with around pipeline 5,000 keys and above, it is impressive to note that Hilton has the largest pipeline in four of them — Dubai, Makkah, Riyadh and Doha — with more than 3,000 keys in each of the first two, and over 2,000 in the latter two,” says Wilkinson.

In terms of overall projects, Hilton has no less than nine projects in Dubai alone, while Emaar and Starwood have eight each. The 1-million-sq-ft Al Habtoor City project boasts almost 1,600 Starwood keys under the St Regis, Westin and W brands (see separate report). Dubai has a total of 132 projects in the pipeline.

Other mega hotels include the Royal Atlantis, facing Atlantis across the water park with 1,050 keys, and Atana by Auris, an 828-key property. The region’s first Tryp by Wyndham hotel will offer 672 ‘condo suites’ (hotel rooms for sale freehold).

Exciting ‘lifestyle’ brands coming up in Dubai include Bulgari, Hard Rock, Hotel Indigo by InterContinental, ME by Meliá, Nikki Beach, Palazzo Versace and Paramount — the latter associated with Damac.

In second place, Makkah has 31 chain hotel projects, many boast large capacities of between 500 and 800 keys. Three of Hilton’s five pipeline hotels there are in this range. Millennium and One to One both have four future properties in Makkah, which will also soon host the world’s largest Holiday Inn – the 1,238-key Holiday Inn Makkah – in 2016. The current largest is the 1,224-key Holiday Inn Macao Cotai Central.

“Many of the notable hotels will be part of the 38-tower Jabal Omar project, with a projected capacity of more than 34,000 guests during normal demand, and in excess of 100,000 people during the peak Ramadan and Hajj seasons,” says Wilkinson.

The world’s future largest hotel, the 10,000-key Abraj Kudai in Makkah, is yet to appoint an operator.

In Riyadh, there are seven operators with five or more hotels in their pipelines, with Hilton again at top place with eight, including the 864-key Hilton Riyadh Hotel and Residence.

Upper upscale brands coming in include Biltmore, Fairmont, Grand Millennium, Park Hyatt, Shaza, Sofitel and Wyndham Grand. Riyadh is also setting lifestyle trends, with the Nobu and Studio M hotels opening this year, to be followed by Hotel Indigo next year.

In Doha, Hilton’s eight future properties will include the region’s first property under its Curio lifestyle brand, at the Mall of Qatar. “The Qatari capital stole a march on Dubai in terms of its ‘hip’ factor when the Gulf’s first W hotel opened there a few years back, and it may well stay ahead when The Mondrian by Morgans debuts next year, ahead of its sister hotel, Delano Dubai, which opens its doors in 2017,” says Wilkinson.

With six pipeline properties totalling 1,645 keys, Katara is busy expanding its recently re-spelt Murwab brand. All eyes are on Katara’s 614-key ‘Iconic Towers’, in which the crossed swords of the country’s seal will be architecturally translated into twin arched towers.