Overview of Pipeline Growth
The Middle East’s hotel construction sector demonstrated resilience in the first quarter of 2026, according to the latest data from Lodging Econometrics (LE). The region closed Q1 with 717 hotel projects and 177,110 rooms in the pipeline, representing a 13% increase in projects and a 12% increase in room count compared to the same period last year. This growth occurred despite the onset of the U.S./Iran conflict at the end of February 2026, indicating that many of these projects were already committed before the escalation of tensions.
Breakdown by Construction Stage
Projects currently under construction in the Middle East total 335 projects with 84,438 rooms. Another 180 projects, representing 52,788 rooms, are scheduled to begin construction within the next 12 months. This segment grew by 14% in project count and 12% in room count year over year. Early planning projects reached a new high, with 202 projects and 39,884 rooms, reflecting a 36% increase in projects and a 48% increase in rooms compared to the previous year. These figures suggest a positive outlook for long-term hotel development in the region.
Growth by Hotel Chain Segment
Luxury hotels led the pipeline with 207 projects and 45,076 rooms, a 7% year-over-year increase in project count. The upscale segment showed even stronger growth, reaching 180 projects and 52,597 rooms, up 15% in projects and 18% in rooms compared to the previous year. These trends indicate that both high-end and upscale hotel brands are expanding their presence in the Middle East.
Country and City Highlights
Saudi Arabia remains the leading country in the region’s hotel construction, with 385 projects accounting for 105,598 rooms. This represents a 21% increase in project count and a 24% rise in rooms year-over-year. Egypt follows, with record numbers of 157 projects and 33,446 rooms, up 26% in projects and 16% in rooms. The United Arab Emirates has 105 projects and 25,148 rooms, while Oman and Bahrain have 26 projects (4,451 rooms) and 12 projects (1,900 rooms), respectively.
Among cities, Riyadh leads with 105 projects and 20,927 rooms, up 21% in projects and 19% in rooms from the previous year. Jeddah follows with 63 projects and 14,764 rooms, showing increases of 26% and 42%. Cairo, Makkah, and Muscat also report significant growth in their hotel pipelines.
Hotel Openings and Forecasts
In the first quarter of 2026, 11 new hotels with 2,516 rooms opened in the Middle East. LE forecasts an additional 80 new hotels with 15,479 rooms to open by the end of 2026, bringing the total to 91 new hotels and 17,995 rooms for the year. For 2027, LE projects 98 new hotel openings with 20,372 rooms across the region.
Outlook
Despite recent geopolitical tensions, the Middle East’s hotel construction pipeline continues to expand. Growth is driven by increased commitments in Saudi Arabia, Egypt, and the United Arab Emirates, as well as strong activity in both luxury and upscale segments. Industry analysts will continue to monitor the situation and provide updates in future quarters.
