Viability director Guy Wilkinson reports from the Arabian Hotel Investment Conference 2012, which revealed an ambivalent outlook on the opportunities for hotel developers in the region
Some people collect stamps; for me, it’s GCC hotel pipeline data. Regular readers of this column will recall that last September, my company published a survey of more than 100 chains active in the Gulf, showing a massive 274 hotels with 77,000 rooms under development.
Well, I’ve had a few chances to check first-hand the reality of the data provided by the operators, and confess there may have been just a teensy element of propaganda in their figures.
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I was in Jeddah recently, for example, and drove the entire length of the Corniche — among other principal thoroughfares — in search of building sites for the 16 future hotels we had been officially told were confirmed.
Disappointingly, it turned out that in fact, most of them had either not yet started on site, were not actually signed, or had simply been cancelled without comment.
The reason I mention this is that Jeddah is one of Saudi Arabia’s top cities and the Kingdom is supposedly the GCC’s hottest market for hotel development — right? At last month’s Arabian Hotel Investment Conference (AHIC) in Dubai, we heard many a speaker spout eloquently about the Kingdom’s and indeed the entire region’s continued potential to absorb new hotels.
Accor’s Middle East development director, Olivier Granet said: “The Middle East has over 30 cities with one million inhabitants, but only one-to-two hotel rooms per 1000 inhabitants, compared to a figure of 10 in Europe.”
With talk of massive future pipelines, delegates who attended only the plenary sessions, or who were looking to catch a few key ‘sound bites’ from the panel sessions, might thus have left the conference thinking the message was basically the same as previous years, i.e., “Recession, what recession?”
In reality, for nerdy listeners like myself, the event drilled down quite effectively into the reality that the development potential is restricted to what Fairmont’s development director, Rami Moukarzel, called “pockets of opportunity” only, two of which he identified as being Algeria (“a stable market with a stable political regime”) and Erbil in Iraqi Kurdistan.
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Jun 12, 2012 , Spain
As you state, committed projects are few and far between - and even then, getting all of the relevant information about any project can be difficult at the best of times. The other thing to consider with the region in general is the actual real demand for hotel rooms in general - whilst the numb...