According to a new study, cash expenditure in the GCC hospitality industry is set to reach more than US $1.17 billion this year, according to the organisers of The Hotel Show.
This is despite a tumultuous global economy with major developed economies recording budget deficits and colossal sovereign debt.
The report was produced by Dubai-based research company Proleads for The Hotel Show, which takes place at the Dubai World Trade Centre from May 18-20.
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The Proleads figures show estimated cash expenditure this year on hotel projects under construction across the GCC will top $1.17 billion.
The bulk of that spending power is in the United Arab Emirates at $463.8 million however, Oman will eclipse Saudi Arabia this year spending $269.2 million as opposed to the Kingdom’s $245.5 million, although that will not prevail beyond 2010.
Qatar then leads the rest of the GCC with an estimated spend of $100.3 million, followed by Bahrain with $65.3 million and finally Kuwait with $31.7 million.
“These figures really show that there is no shortage of ambition or liquidity,” said Ray Tinston, sales director, The Hotel Show. “At a time when the US and countries in Europe are preparing stringent austerity measures, to reduce their budget deficits and repay billions in loans, the Middle East region is powering ahead.”
Earlier this year Proleads reported that active hotel projects under construction but due for completion by 2013 throughout the GCC stood at $7 billion. In their latest report that figure has grown to $7.8 billion, an increase of $800 million, mainly due to new project announcements in Qatar and Saudi Arabia.
Overall, most are in the United Arab Emirates ($4.34 billion) followed by Saudi Arabia ($1.74 billion), Qatar ($923 million), Bahrain ($463 million), Oman ($300 million) and Kuwait ($90 million).
“The fact that there has been an 11.4% increase in the value of projects, once again highlights that the development of the regional hospitality sector continues unabated, it is quite clearly sustainable,” said Tinston.
There are still concerns about hotel oversupply and the effect that will have on occupancy levels and average room rates. Indeed last month, a Deloitte analysis of STR Global hotel data revealed that revenue per available room (RevPar) rates in the Middle East was estimated at $131.42 during the period year-to-date February 2010, compared to $151.51 during the corresponding period in 2009.
“However compared to the rest of the world those figures stack up well. Europe recorded an estimated rate of $72.05 with $79.65 in Asia Pacific, during the same period. An important factor going forward will be what happens in the global and regional economies to encourage people to travel and impact hotel occupancies,” said Tinston.
For more information about The Hotel Show, please visit www.thehotelshow.com
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