Hotel developments lead the way for Middle East

The January 2014 STR Global Construction Pipeline report stated that for Middle East/Africa hotel development pipeline comprises 525 hotels totalling 127,840 rooms.

Among the chain scale segments, the upper upscale segment accounted for largest portion of rooms in the total active pipeline (33.8%) with 43,183 rooms. Three other segments each accounted for more than 15% of rooms in the total active pipeline: the upscale segment (19.7% with 25,213 rooms); the luxury segment (19.7% with 25,150 rooms); and the unaffiliated segment (16.6% with 21,260 rooms).

The upper upscale segment made up the largest portion of rooms under construction (37.5%) with 24,905 rooms, followed by the luxury segment (21.3 with 14,142 rooms) and the upscale segment (19.9% with 13,252 rooms).

Further review of STR Global’s preliminary January data indicates positive revenue-per-available-room growth for Dubai. The emirate reported increase in supply (+5.9%) and demand (+5.5%). However there was a slight dip with a 0.4% in occupancy to 87.5% but the average daily rate increased to AED1,177.74 resulting in a 11.7% increase. Finally, there was also a 11.2% rise in RevPAR to AED1,031.10.

“The growth in demand for January was not able to absorb the additional supply coming into this market, resulting in a slight decline in occupancy,” said Elizabeth Winkle, managing director of STR Global. “ADR, meanwhile, achieved the highest levels of any January since 2008 and remains the main driver for the double-digit growth in RevPAR”.