• THE ENGINE: HOTEL MARKET
THE PIPELINE HAS CLEAR HOTSPOTS Developers are still busy. Lodging Econometrics counted a record 15,922 projects and almost 2.44 million rooms in the global pipeline at the end of 2025. More than one million rooms were already under construction, with 389,175 rooms forecast to open during 2026. The map is heavily concentrated. The US and China account for 62% of all pipeline projects, with Dallas leading the world by project count, followed by Atlanta, Chengdu, Guangzhou and Phoenix. India is growing quickly too, ending 2025 with a record 906 projects and more than 118,000 rooms, up 31% and 35% respectively. Europe has a different profile but remains active, with 1,731 projects and more than 255,000 rooms in development at the end of the first quarter of 2026. The UK leads by project count, followed by Türkiye, Germany, France and Portugal. London has the region’s largest city pipeline, ahead of Istanbul and Lisbon. The composition matters as much as the volume. Upscale and upper-midscale hotels account for the largest share of global development, serving the broadest range of business and leisure travellers. At the same time, luxury and upper-upscale pipelines have reached record levels, showing that developers still see considerable appetite for distinctive, high-value experiences. THE MIDDLE EAST AT FULL SCALE The Middle East entered 2026 from a position of rate strength. STR’s year-to-date March data placed regional occupancy at 65%, with ADR at $209, the highest level among the world regions in its comparison and 5% ahead year on year. The figures reflect the region’s premium hotel mix, high-spending leisure demand, strong events calendars and concentration of internation- ally branded properties. The construction story is just as powerful. The Middle East pipeline closed Q1 at a record 717 projects and 177,110 rooms, rising 13% by project count and 12% by room count. More than 84,000 rooms were already under construction, while early planning reached a record 202 projects and 39,884 rooms. That early-stage pipeline rose 36% by projects and 48% by rooms, offering a clear signal of long-term developer confidence. Luxury leads the regional pipeline with 207 projects and 45,076 rooms. Upscale is expanding even faster, reaching 180
projects and 52,597 rooms after double-digit annual growth. The combination points to a broader hotel market, with high-end resorts and branded residences growing alongside accommodation designed for business travel, families, religious tourism, domestic trips and secondary cities. Branded residences have become another major regional trend. Savills says the number of schemes across the Middle East and North Africa increased 187% over five years. Dubai had 64 completed devel - opments and 87 in the pipeline, making it the world’s leading city for completed and planned branded residences. Major international groups continue to expand across Saudi Arabia, the UAE, Egypt, Oman, Bahrain and Qatar. Their plans span island resorts, city hotels, conversion brands, extended stay, wellness, lifestyle and economy accommodation. Regional tourism strategies, airport expansion, entertainment districts, pilgrimage flows and growing events calendars provide multiple demand streams. This breadth gives the region a strong foundation for continued growth through 2027 and beyond.
Above: Taif is one of Saudi’s underserved markets, with just 10,200 licensed accommodation keys as of mid-2025
“The money is gravitating towards assets that are difficult to replicate”
40 | SPOTLIGHT RIYADH
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