Seen on arabianbusiness.com - May 25, 2009
More than $140bn of new hotel projects should be complete in the Gulf within two years in anticipation of an accelerated surge in demand for hotel space from 2013 onwards, according to new research released on Sunday.
But even more hotels will have to be built in the region from next year to be ready in time to meet the expected sudden uptake in demand, said the study by Dubai-based research house Proleads.
Based on an average completion schedule of two to three years, a total of 306 new hotels - accommodating 108,600 rooms - should come online by 2011, it said.
“Given projected increases in demand from 2013 onwards, more hotels will be required if relatively high occupancy levels are to be maintained,” said Emil Rademeyer, director of Proleads.
The report forecasts that occupancy levels at hotels in the GCC will recover to the highs of 2008 by the end of next year.
However, it acknowledges with the region’s hospitality industry feeling the pinch from the global economic slowdown, 2009 will prove to be a challenging year.
The research also sheds light on the scale of the impact the slowdown has had on the region’s hotel construction sector.
“The economic slowdown has resulted in much more cash flowing out of the hotel construction sector than into it,” said Rademeyer.
“This year, active cash flow is estimated to drop to below $20bn.”
However, he said the industry was projected to restore its ability to replace cash flow by late 2010, with more cash flowing into the industry than out of it by 2011.