meed-logo

line1 line2 line3
SIGN IN / REGISTER

Region heads for hotel boom

28 March 2024

 

This report on hotel investment also includes: GCC becomes a top tourist destination

Alongside the major infrastructure and construction schemes currently under way in the region, contractors in the Middle East and North Africa (Mena) are looking forward to a significant inbound spree of hospitality-linked project work.

A combination of government-led touristic masterplans – led by expansive and ambitious schemes in Saudi Arabia – alongside private sector investment in individual hotels and resorts has led to the build-up of a $54bn pipeline of hospitality-linked projects in the pre-execution, study and planning stages across the Mena region, according to regional projects tracker MEED Projects.

With this ramp up in planned hotel schemes, the region is now leading the global recovery in tourism projects, in a reflection of broader travel trends that have seen tourist arrival numbers grow to exceed pre-pandemic levels by 22%, according to GlobalData.

Projects under way

The $54bn project pipeline compares to a value of $22.7bn of work currently under execution in the region, and a long-term tally of $95.4bn-worth of hotel and resort project contract awards over the past decade and a half.

In contrast to the pace of activity since 2009, however, the region’s upcoming projects are set to be delivered in a much tighter timeframe. Almost the entire $54bn-worth of planned hotel and resort projects is scheduled or expected for award before the end of 2025 and set to be completed in advance of 2030.

This sets the stage for an intensified period of hotel investment and development over the next five years that could surpass the last investment boom cycle in 2014 and 2015, when hotel project award totals reached $9.1bn and $10bn, respectively.

Since 2009, the average annual value of hotel and resort project awards has been $6.4bn, with activity waxing and waning over the intervening period. Hotel and resort schemes fell away dramatically in 2020 amid the Covid-19 pandemic, with awards reaching a low of $2.6bn in 2021. Activity then recovered in 2022 and 2023 to the above-average values of $6.7bn and $6.6bn, respectively.

So far in 2024, there have been $1.3bn of hotel and resort project awards, but there is a further $5.2bn in work under bid and set to be awarded this year. The award of those projects would take the tally for 2024 up to $6.5bn – a comparable awards total to those of 2022 and 2023. There is then an additional $15bn-worth of projects in design and due for award in 2024 on the basis of announced and expected delivery timeframes.

If the value of projects under bid and just a third of the projects under design and also provisionally due for award in 2024 are let as expected, it will be a record year for hotel project awards in the region.

Saudi investment spree

Looking at the $54bn-worth of projects split by market, the pipeline is dominated by the touristic megaprojects currently under development in Saudi Arabia, which account for $39.9bn or 74% of the total value of upcoming work.

The hotel and resort projects in the kingdom are in turn heavily weighted towards several provinces that have been targeted for touristic development. These include Tabuk Province, which has $12.6bn-worth of upcoming hospitality-linked projects as part of the Neom and Red Sea Project developments; the Medina and Mecca provinces, which together hold $16.4bn-worth of upcoming schemes linked to the annual Hajj and Umrah tourism industry; Riyadh, with $7.1bn-worth of upcoming work, including that linked to the Qiddiya masterplan; and smaller values in Asir, the Eastern Province and others.

In recent months, several hotel schemes have been announced in the kingdom. In late February, Neom announced plans for a Raffles-branded property at its Trojena mountain resort development. The hotel will be located in the Discover cluster of the resort and is slated to open in 2027. The first hotel projects at Trojena are meanwhile well under way, with local contractor Isam Khairi Kabbani Group beginning work in December on the estimated $100m Chedi Trojena, with completion expected in 2026.

In early March, Red Sea Global (RSG) announced plans for a Four Seasons hotel at its Triple Bay development at Amaala, with Dubai-based U+A Architects, owned by the French engineering firm Egis, as project architect. Four Seasons has also announced other upcoming projects in the kingdom, including a Red Sea project at Shura Island, another at Neom’s Sindalah Island and projects on the Jeddah Corniche and at Diriyah, outside of Riyadh. Saudi Arabia’s Kingdom Holding Company has a 24% stake in Four Seasons, alongside majority shareholder Cascade Investment.

March also saw work begin on Neom’s Epicon Towers – a technically complex twin-tower hotel – with enabling works being undertaken by the local Ammico Contracting. Previously known as the Gas Station Hotel, the design for the project was developed by Singapore’s Meinhardt Group, with the Hong Kong-based 10 Design serving as the lead consultant on the project.

These upcoming schemes are set to join $7.8bn-worth of Saudi hotel projects awarded in the past three years, including $1.8bn-worth of awards in Tabuk. In July 2023, RSG awarded a contract at Triple Bay to the local Mas Engineering for the construction of the Marina Lifestyle Hotel & Village. In May, RSG contracted a joint venture of Egypt’s Hassan Allam Holding and the local Rawabi Specialised Contracting to construct the Triple Bay Rosewood Hotel.

Also in Tabuk, Hilton International opened its first Hampton hotel in March, having jointly developed the project with the Riyadh-based Cayan Group. The project was awarded in January 2022 to local contractor BEC Arabia, with Egypt’s Sabbour Consulting acting as project manager.

Elsewhere in the kingdom, the Public Investment Fund-backed Dan Company also tendered three hotels to be operated by Hilton at its Palm One project, a farm-based tourism destination in Al Ahsa. The deadline for bid submissions is 30 April. Hong Kong-based LWK Partners is the lead designer for the project.

Broader regional spending

In a prominent example of government-led hotel and resort development activity outside of Saudi Arabia, Oman has recently been progressing several new touristic masterplans.

Oman’s Heritage & Tourism Ministry issued a tender in February inviting consultants to bid to develop a tourism project masterplan for the Remal Al Sharqiyah dunes of North and South Al Sharqiyah. The tender was issued on 27 February, with a bid submission deadline of 17 April.

Earlier in February, Oman’s Housing & Urban Planning Ministry (MHUP) also revealed the designs for a new $2.4bn development on Jebel Al Akhdar named the Omani Mountain Destination and masterplanned by Canadian engineering firm AtkinsRealis.

The same month, the MHUP also announced the $1.3bn Al Khuwair Downtown and Waterfront project in Muscat, engaging Zaha Hadid Architects for the project design alongside real estate consultant CBRE.

In the UAE, much of the hotel and resort development is proceeding in a more piecemeal manner, with a greater number of smaller, more discrete touristic schemes. One major development in November was Dubai developer Al Wasl’s award of the $1.3bn contract to build The Island to China State Construction Engineering Corporation in the largest construction contract in Dubai since 2017.

The Island is a 10.5-hectare reclaimed island that will feature MGM, Bellagio and Aria branded hotels. The local APCC was the earthworks contractor, with the project being managed by Germany’s Buro Kling Architectural Engineering Consulting and the local Consultant HSS.

Another recent example of UAE project activity was Modon Properties’ award in November of the contract for a four-star sports hotel on Abu Dhabi’s Al Hudayriyat Island to Trojan General Contracting. The UK’s Atkins is the project consultant, with Canada’s Ellisdon as the project management consultant.

What is apparent from all of this activity is the clear strengthening of hotel project development as regional governments pursue tourism investments both as a long-term economic diversification strategy and one that dovetails with robust and rising visitor traffic to the region.

As long as these trends remain, strong ongoing government and private sector investment in hospitality-linked projects can be expected, and with it, the delivery of the region’s $54bn hotel project pipeline by 2030.

GCC becomes a top tourist destination

https://image.digitalinsightresearch.in/uploads/NewsArticle/11640402/main.gif
John Bambridge

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • EtihadWE tenders $150m Ajman substation project

    21 July 2026

    The UAE’s Etihad Water & Electricity (EtihadWE) has tendered a contract to build three new substations in Ajman.

    Estimated to cost $150m, the project involves the construction of three new 132/11kV substations in the Bahya, Rumaila and Liwara districts. It also includes associated 132kV underground cabling works to connect the substations to the existing transmission network.

    The bid submission deadline is 10 August.

    According to tender documents, the project will add distribution capacity to support load growth and improve the security of electricity supply in the emirate.

    The scope of work includes site preparation, construction of three substation buildings and foundations, installation of 132kV GIS/AIS switchgear, 132/11kV power transformers and 11kV switchgear, as well as protection, control, Scada and telecommunications systems.

    Etihad WE is responsible for electricity and water services in Ajman, Umm Al-Quwain, Ras Al-Khaimah, Fujairah and parts of Sharjah. The utility has been investing in new substations and transmission infrastructure as electricity demand continues to increase across the Northern Emirates.

    This includes a 132/33/11kV substation project on Al-Marjan Island in Ras Al-Khaimah. Construction work is ongoing on the project, with Maetal Dubai serving as the main contractor.

    EtihadWE is also finalising a new masterplan that will cover network capacity requirements and expansion priorities for the next 10 to 15 years.

    In June, Abdulla Al-Khemeiri, chief operations officer, told MEED: “We are currently reviewing it, and we need to obtain shareholder approval first. Once it is approved, it will be released, hopefully by the end of the year.” 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17710661/main.jpg
    Mark Dowdall
  • Seven seeks contractors for Dammam water park and hotel

    21 July 2026

     

    Saudi Entertainment Ventures (Seven), a wholly owned subsidiary of the Public Investment Fund, is preparing to shortlist general contractors for the main construction package of its Dammam Water Park & Hotel project in the Al-Hamra district.

    The waterfront development sits on a 324,300-square-metre (sq m) plot.

    A notice was issued to contractors in July, and the client is expected to finalise the shortlist by the end of this month.

    Seven is seeking firms capable of delivering a lump-sum, turnkey solution for both the water park and a 321-key lifestyle hotel. Construction is expected to take 24 months from contract award.

    The water park is designed around five themed zones and will feature what is billed as the world’s first double-tornado/triple-wave waterslide.

    The park will include 21 major rides and attractions, 21 food and beverage outlets, 66 cabanas, parking for 1,100 vehicles and a daily peak capacity of 4,500 guests.

    Slide procurement has already been completed directly by Seven. The selected contractor will be responsible for locally sourcing slide towers, integrating them with rockwork and secondary steel, and installing the units.

    Detailed design and issued-for-construction packages are complete.

    Marine works, piling, dewatering and site utilities are being progressed separately by the existing early works contractor.

    The hotel component covers roughly 31,700 sq m of gross floor area and will offer 321 guest rooms, four F&B outlets, spa and wellness facilities, a family pool, and meeting, incentive, conference and exhibition space.

    The new contractor’s scope includes superstructure concrete works, façade and roof works, mechanical, electrical and plumbing, interior fit-out and landscaping.

    Seven will consider only contractors with demonstrated experience delivering water parks with complex aquatics, theming and rockwork – either directly or through clearly defined subcontractor partnerships – along with a track record in high-end turnkey hotel fit-outs.

    Construction of Seven’s Dammam entertainment complex is currently under way. In October 2023, Saudi Binladin Group won contracts worth around SR5bn ($1.3bn) from Seven to build two entertainment destinations in the Dammam and Al-Khobar areas of the Kingdom’s Eastern Province.

    The Al-Khobar entertainment complex is being built on reclaimed waterfront land. The complex spans around 300,000 sq m and is also known as ‘The Waves’.

    The Dammam entertainment complex spans 360,000 sq m and is being built on reclaimed land on the Dammam waterfront.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17710096/main.jpg
    Yasir Iqbal
  • Al-Ula appoints equestrian village early works contractor

    21 July 2026

     

    Saudi Arabia’s Royal Commission for Al-Ula (RCU) has awarded a contract for early construction works at the Al-Muatadil Equestrian Village.

    The contract was awarded to Al-Khobar-based Al-Shalawi International Company.

    Canadian engineering firm AtkinsRealis is the project management consultant. UK-headquartered Baker Wilkins & Smith and local firm Al-Hoty Company are the cost consultants.

    Dubai-based SSH is the supervision consultant, and UK-based Hopkins Architects is the lead design consultant.

    RCU announced the project plans in March 2023, including the development of an equestrian hub with two arenas that can accommodate 5,000 and 1,400 spectators, respectively.

    The venue will also include grass polo, sand polo and endurance facilities, with capacities of 600, 400 and 600 seats, respectively.

    These facilities will be complemented by visitor amenities, two stable compounds with capacity for 740 horses, and accommodation and retail outlets for event participants and workers.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17710170/main.jpeg
    Yasir Iqbal
  • Contractors await decision on Riyadh airport sewage plant

    21 July 2026

     

    Seven contractors are awaiting a decision on a contract to build a sewage treatment plant at the King Salman International airport (KSIA) development in Riyadh, according to sources.

    It is understood that bids were submitted to King Salman International Airport Development Company (KSIADC) in March, following the tender’s release earlier this year.

    The plant will treat wastewater generated by the airport and surrounding developments, including passenger terminals, runways, residential districts, commercial facilities and logistics areas.

    The facility will have a treatment capacity of 92,000 cubic metres a day. The contract is estimated to be worth SR700m ($187m).

    The bidders (all local) are:

    • Al-Rawaf Trading & Contracting
    • Almajal Alarabi
    • Nesma Water & Energy
    • Safari Company
    • Saudi Services for Electro-Mechanic Works
    • Washnah Contracting
    • Water & Environment Technologies (Wetico)

    The project scope includes the construction of the treatment plant, the installation of preliminary, secondary and tertiary treatment systems, sewage collection and conveyance pipelines, pumping stations, and electrical and control systems.

    US-headquartered Jacobs is acting as the main project consultant. Commercial operations for the plant are scheduled for 2029.

    The sewage treatment plant is one of several water infrastructure packages planned for the airport. KSIADC is also evaluating bids for a separate $30m engineering, procurement and construction contract covering potable water and fire water tanks and an associated pumping station. The same seven companies have submitted bids for that package.

    Earlier in July, MEED exclusively reported that a joint venture of Beijing-headquartered China Civil Engineering Construction Corporation and Dammam-based Mofarreh AlHarbi & Partners had won a deal to undertake the enabling and substructure works for Terminal 6 at KSIA.

    The latest development followed KSIADC’s receipt of prequalification statements from contractors on 1 July for two new packages at KSIA.

    These include the construction of a permanent East-West corridor and landside access roads serving the North and South terminals.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17709281/main.jpg
    Mark Dowdall
  • Dubai Municipality awards Tasreef drainage contract

    21 July 2026

     

    Dubai Municipality has awarded local firm Detech Contracting the engineering, procurement and construction (EPC) contract for the TF-15-C1 package of its Tasreef Rainwater Drainage Network programme.

    It is understood the municipality issued the letter of award for the contract earlier this month, covering the construction of a stormwater drainage system along Al-Wasl Road and communities west of the Dubai Canal.

    The project includes the construction of a gravity-based stormwater pipeline network with diameters of up to 3.5 metres. It is estimated to cost $100m.

    It was tendered in February through the government’s Sewerage and Recycled Water Projects Department, with bids submitted in April.

    The package forms part of the wider Tasreef initiative, which is intended to improve Dubai’s flood resilience.

    The TF-15-C2 package was recently awarded to China State Construction Engineering Corporation for a stormwater drainage network project located along Umm Suqeim Road in the Al-Barsha and Al-Quoz areas of Dubai.

    The project is estimated to cost $162m and includes the construction of about 20 kilometres of new stormwater pipelines. Similar to the C1 package, it is located west of the Dubai Canal and will connect the Al-Quoz 3 and Al-Quoz 4 industrial areas with Al-Quoz 1.

    Separately, Al-Kharafi has won a drainage EPC contract (Ds207) to upgrade an existing pumping station for the municipality, a source said. The package focuses mainly on mechanical works and is valued at about $39m.

    In May, MEED reported that local firm Nael Construction & Contracting had signed a contract with Dubai Municipality to build a sewage and stormwater drainage system in Dubailand.

    The project (DS-204-C1) involves the construction of a drainage system with sewage gravity pipelines of up to 2,200mm in diameter.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17707980/main.jpg
    Mark Dowdall