Viability director Guy Wilkinson will present his exclusive GCC hotel industry pipeline research at the Hotelier Middle East Great GM Debate taking place tomorrow. Here’s a sneak peek…
They say 13 is an unlucky number and in this 13th year of my GCC future hotel pipeline survey, the numbers are down for the second consecutive year.
Over the last five years, the total pipeline of confirmed future hotels increased from 199 in 2007 to a peak of 325 in 2009, then fell to 283 last year and 274 this year. In terms of room count, the 2011 total amounts to 77,020 hotel rooms (excluding serviced apartments and villas) compared to 92,026 in record year 2009.
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My team of expert researchers at Viability Management Consultants drilled down to verify the status of each project confirmed to us last year.
We found that no less than 58 projects had been ‘put on hold’ or cancelled altogether since the 2010 rankings, accounting for 15,757 potential rooms. Since the recession started in earnest, back in 2009, we calculate that around 50,000 rooms in total have fallen into this category.
Due mainly to continuing financial uncertainties in various parts of the GCC, many hotel projects have also been delayed. To be precise, 98 projects had been delayed by between one and five years compared to their original programmes declared to us in 2010, and this is without taking into account that in many cases they were already behind schedule by at least a year last year.
However, our investigations revealed that 167 projects were still bang on schedule, which represents 61% of the total, as compared to just 50% in 2010. There were even nine projects that were ahead of schedule, perhaps reflecting an excessive level of pessimism about market prospects on the part of their developers in previous years.
Indeed, the picture in 2011 is far from one of gloom and doom. This year’s drop in planned supply represents just a 9% reduction over 2010 levels of rooms development and a 20% fall compared to 2009. Not bad, considering how badly other sectors and other regions are faring in these days of global financial melt-down.
Viability canvassed no less than 104 hotels chains that are active in our region, compared to 80 last year. Against the odds and against the pundits’ predictions just a few years ago, the UAE continues to be a hot bed of development activity, spurred on by the recent tourism windfall caused by the (hopefully temporary) closure of erstwhile competing destinations such as Bahrain, Egypt and Lebanon, due to continuing unrest.
However, the undisputed contender to the UAE this year is Saudi Arabia, which has more than doubled its hotel pipeline over the past year, jumping from 46 to 95 projects, almost catching up with the UAE’s total of 110 properties, when in 2010, the Kingdom could barely manage a third of the Emirates’ 160 projects.
This year has seen 15 chains each declaring more than 1000 rooms under development, an excellent level and in the great scheme of things, not a million miles short of the peak of 23 achieved in 2009.
And in first place ...
Marriott again tops the all-important rooms-based ranking with an all-time record pipeline of 10,472 rooms, the previous record (9,572 rooms) having also been set by Marriott last year.
Hilton is in second place, up from 11th last year, so things have been going well for the chain, with many takers for its tried and tested core brand in particular. Other management companies in the top 10 in both years include Accor, Fairmont Raffles, the InterContinental Hotels Group, Millennium, Mövenpick, Rezidor, Rotana and Starwood.
Outside the top 10, Best Western jumped from 24th place last year to 11th in 2011, with more than 2000 rooms including six hotels under its four-star Best Western Premier brand, for which hotels are not franchised, but managed directly. Hyatt also moved rapidly up the rankings from 33rd place in 2010 to 14th this year, with four hotels and 1,340 rooms (excluding serviced apartments).
One single extraordinary development in Makkah has been largely responsible for keeping Marriott, Hilton and Hyatt at the top of the rankings. Between them, these three leading operators are planning to open 12 hotels with almost 7000 rooms in the Jabal Omar project, soon to upstage even the almost 3000-unit Fairmont-Raffles-Swissôtel project in terms of front row access to the Holy Mosque.
Hilton will open no less than six hotels with more than 4000 rooms at Jabal Omar, under its Conrad, Hilton, Hilton Suites and DoubleTree brands.
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