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Formula 1 significantly impacts markets such as Bahrain, Jeddah, Qatar, and Abu Dhabi. – Image Credit Unsplash
Kelsey Fenerty of STR writes in her analysis on LinkedIn that the Middle East’s hotel industry, particularly in the six GCC countries, has significantly evolved over the past decade. This transformation is largely due to supply growth, changing demand drivers, and major events shaping the region’s hospitality landscape.
Supply and Demand Dynamics
Between 2014 and 2024, the Middle East hotel industry’s supply grew at an annualized rate of 3.5%, which is almost equal to the demand growth of 3.4%. Development activity has transitioned from traditional markets like Dubai and Abu Dhabi to emerging markets like Riyadh and Jeddah. Despite a slowdown in Dubai’s development, Riyadh experienced a modest supply growth of 2.4% in 2024, with luxury hotel rooms growing by 8.6%.
Impact of Events
Events have increasingly driven demand and RevPAR growth in the Middle East’s hotel industry. Formula 1, for example, significantly impacts markets such as Bahrain, Jeddah, Qatar, and Abu Dhabi. Other events like GITEX, an annual tech and startup show in Dubai, drive demand growth. Informal events like school holidays, particularly in Doha, spike occupancy and ADR.
Varying Event Impacts
The impact of events on hotel performance varies greatly. Some events, like the MDLBEAST Soundstorm music festival in Riyadh, have a mixed performance impact, but there are indications of gradual growth in occupancy alongside the event’s popularity.
Discover more on LinkedIn.
