-
Rendering of the upcoming Fairmont Rua Madinah – Image Credit Accor
The Middle East’s hotel construction pipeline reached unprecedented levels in Q2 2025, with notable growth in Saudi Arabia, Egypt, and the UAE.
The Q2 2025 Hotel Construction Pipeline Trend Report for the Middle East, released by Lodging Econometrics (LE), indicates a significant surge in hotel construction activities across the region. The report highlights that the hotel construction pipeline has reached a new all-time high, with 650 projects encompassing 161,574 rooms. This marks a 7% increase in projects and a 10% increase in rooms year-over-year (YOY), underscoring the region’s robust growth in the hospitality sector.
Current Construction and Future Plans
As of the second quarter of 2025, there are 337 hotel projects under construction, accounting for 86,447 rooms. This represents a 12% increase in projects and a 7% rise in rooms compared to the previous year. Additionally, projects slated to begin construction in the next 12 months stand at 147 projects with 45,457 rooms, reflecting a 31% increase in rooms YOY. The early planning stage includes 166 projects with 29,670 rooms, showing a modest 2% increase in projects YOY.
New Announcements and Construction Starts
The second quarter of 2025 saw 48 new project announcements, totaling 10,567 rooms. New construction starts reached 32 projects with 8,587 rooms, marking a significant 23% increase in projects and a 38% rise in rooms YOY. The combined total of hotel renovations and brand conversions also achieved record numbers, with 67 projects and 14,768 rooms.
Luxury and Upper Upscale Segments
The luxury chain scale has reached an all-time high with 196 projects comprising 43,942 rooms. The upper upscale chain scale also achieved record project totals, with 150 projects and 38,357 rooms. Together, these two segments account for 55% of the projects and 56% of the rooms in the region’s pipeline, highlighting the Middle East’s focus on high-end hospitality offerings.
Key Countries and Cities
Saudi Arabia leads the Middle Eastern countries with the most significant number of projects, boasting a record 342 projects and 92,187 rooms. Egypt follows with 127 projects and a record-high room count of 28,172 rooms. The United Arab Emirates, Oman, and Qatar also contribute to the region’s pipeline with substantial project counts. Riyadh, Jeddah, Dubai, Cairo, and Makkah are the cities with the largest pipelines, each showing significant growth in hotel construction activities.
Forecast for Hotel Openings
In the first half of 2025, the Middle East opened 14 new hotels with 4,327 rooms. LE forecasts an additional 89 new hotels with 19,269 rooms to open by the end of the year, bringing the total to 103 new hotels and 23,596 rooms by year-end 2025. Looking ahead, LE analysts predict the opening of 94 new hotels with 19,019 rooms by the end of 2026 and another 91 hotels with 22,631 rooms by 2027.
