Meed | Region’s hotel projects pipeline balloons

Region’s hotel projects pipeline balloons

4 April 2025

This package also includes: Beaches and luxury drive regional tourism

Despite a somewhat lackluster 2024 performance in the region for hospitality-linked project award activity, Middle East and North Africa (Mena) contractors are eyeing more than $60bn in projects in design and bid that are set to proceed to market in the near future.

Last year, project awards in the Mena region’s hospitality-linked construction segment declined slightly to $6.2bn, falling below the contract award values in both 2022 and 2023, while remaining above that of the three preceding years and the average for the past five years.

Also positively, the awards value for 2024 was commensurate with the value of projects in the bidding phase this time last year, when $1.3bn-worth of projects had been awarded and $5.2bn-worth of projects were in the bidding phase. This indicates that projects in the segment are delivering and not stalling.

Top projects

Saudi Arabia dominated the overall project activity in the segment with a total contract award value of $4.4bn. This was followed by the UAE at $1bn and a handful of other countries with a combined $700m in value – making for a significantly skewed project activity landscape.

The largest single project to be awarded was the $762m Keturah Creekside Resort, a Ritz-Carlton Residences scheme in Dubai that is being developed by the local Mag Property Development. The main contract was awarded to Cecep Techand Middle East, a Dubai-based contracting subsidiary of a Chinese state-owned enterprise that is generally better known for its involvement in utility projects.

The next largest award was for the $508m Six Senses Falcon’s Nest Hotel in the Wadi Safar area of Saudi Arabia’s Diriyah gigaproject. This contract was awarded by Diriyah Company to a joint venture (JV) of Qatar’s UCC Holding and local construction group Al-Bawani.

Diriyah Company also let the contracts for four other hotels at Wadi Safar – Aman, Chedi, Faena and Oberoi-branded properties worth a combined $826m – to the same JV.

Three further Diriyah projects worth a combined $519m were awarded for the building of a Capella hotel, a Raffles hotel and a Ritz-Carlton Residences to a variety of other contractors.

Significant gigaproject-linked contract awards were also made on the Amaala development within Red Sea Global’s project portfolio, and for a hotel complex at Qiddiya, the Riyadh-adjacent entertainment city.

The largest contract awarded in a third country was a $125m Avani-Tivoli hotel and residences project in Bahrain let to local contractor Cebarco by Bahrain Real Estate Investment Company (Edamah) as part of the Bilaj Al-Jazayer development.

Project pipeline

Looking ahead in 2025, there are $8.6bn-worth of projects in the bidding phase, with $3.9bn at the prequalification stage, $2.2bn in bid submission and $2.5bn in bid evaluation. If all of this value is awarded as expected, alongside the $410m in awards so far this year, then 2025 could turn out to be the best year for hotel project activity since 2015.

There is also a much larger groundswell of projects in the design phase. This time last year, the value of projects in design was $15bn, but that value has swollen by 270% to $56bn in the past 12 months, led by Egypt’s launch of South Med, a 2,300-hectare tourism masterplan valued at $21bn.

Launched by Talaat Moustafa Group, the South Med project is situated 165 kilometres (km) to the west of Alexandria on Egypt’s northern Mediterranean coastline and 60km east of Ras El-Hekma, an area earmarked for development by Abu Dhabi following a $24bn deal for the land rights.

Between the two masterplans, Egypt’s northern coast promises to generate a significant amount of construction work in the years to come, and developments in the area are also accelerating as the stretch of coastline grows in significance as a source of interest for investors. Local developer Sodic, which in 2021 become a subsidiary of UAE developer Aldar, launched its own plans in September to deliver a $500m Nobu hotel and residences complex just east of the Ras El-Hekma area.

In Saudi Arabia, which accounts for $41.6bn or 50% of the hospitality project pipeline in the Mena region – including $24.4bn-worth of projects in design – the pending work is led in value terms by the $7bn in-design second phase of the Red Sea Project. There are also four packages of work worth a combined $3bn in design for the towers and podiums of the Mukaab project – the cubic centrepiece of the New Murabba development in Riyadh. Meanwhile, a further $3.8bn of projects are in design or bid – split $1.8bn and $2bn, respectively – at the Rua Al-Madinah development.

The next-largest areas of pending hospitality projects in the region are in the UAE and Oman. The UAE’s pipeline is led by Emaar’s $1.5bn Dubai Creek Harbour Tower and a $1.3bn JW Marriott Resort & Residences planned by private developer Wow Resorts for Al-Marjan Island in Ras Al-Khaimah. In Oman, the projects are led by the $500m third phase of the tourism ministry’s Yenkit Hills development and a $500m Trump resort being developed by Omran, the UAE’s Dar Al-Arkan and the US’ Trump Organisation.

If even a small fraction of the $56bn of hospitality-linked projects in the design phase in the region proceeds to execution in 2025, it could swell the awards total to record levels. After a somewhat sluggish performance in Q1, awards activity could pick up markedly from Q2 onwards, given the $2.5bn in projects that are already in bid evaluation and are set for imminent award.

Beaches and luxury drive regional tourism

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John Bambridge

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Saudi Energy, formerly Saudi Electricity Company, has announced revised electricity tariffs, which will take effect on 1 January 2027.

The revised tariff schedule, published on the company’s official website, covers residential, commercial, industrial, agricultural, charitable and government customers.

The largest percentage increase in consumption rates is 16.7%, for residential customers using up to 6,000 kilowatt-hours (kWh) a month. Residential customers will pay 21 halalas/kWh for monthly consumption of up to 6,000kWh, up from 18 halalas. For consumption above 6,000kWh, the rate will rise from 30 to 33 halalas/kWh, a 10% increase.

The industrial tariff will increase by 15%, from 20 to 23 halalas/kWh. Commercial customers, private healthcare facilities and private educational facilities will pay 25 halalas/kWh, up from 22 halalas, for consumption up to 6,000kWh a month, and 35 halalas/kWh above that level, up from 32 halalas.

Tariffs for charities and government customers will also increase. In addition to consumption-based charges, customers will pay a fixed monthly fee based on the capacity of their electricity meter. This replaces the previous separate charge for meter reading, maintenance and billing, with VAT applied to the revised tariffs.

Electricity investment

The new tariffs coincide with changes to water consumption tariffs announced by the National Water Company, also effective from 1 January 2027.

King Salman Bin Abdulaziz Al-Saud directed support measures following a proposal presented by Crown Prince and Prime Minister Mohammed Bin Salman Bin Abdulaziz Al-Saud.

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The tariff changes come as Saudi Arabia plans substantial investment in its electricity infrastructure. In September 2025, Saudi Energy announced plans to invest SR220bn ($58.7bn) in power infrastructure projects between 2025 and 2030.

A June 2025 report by Fitch Ratings forecast negative free cash flow of about SR16bn a year over the period and rising leverage, reflecting the financial demands of the programme.

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Dubai Municipality confirms AED3bn Tasreef drainage awards
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Dubai Municipality has confirmed it has awarded four contracts worth AED3bn ($817m) to expand the emirate’s stormwater drainage network by about 100 square kilometres under phase three of the Tasreef programme.

The projects will cover Jumeirah, Umm Suqeim, Al-Quoz, Al-Barsha, Al-Wasl and Al-Marmoom. The works include constructing and extending main stormwater drainage lines with diameters of up to three metres.

The four packages are part of Dubai’s AED30bn Tasreef programme, which aims to increase the emirate’s stormwater drainage capacity by 700% and reduce costs associated with pumping stations, network operations and maintenance by 20%.

The contracts have been awarded to China State Construction Engineering Corporation (CSCEC) and three local firms: Arifco Group, Nael Construction & Contracting (NCC) and Detech Contracting. Dubai Municipality did not state which projects the awards relate to.

According to sources, the contract awards include packages TF-15-C1, TF-15-C2 and TF-13-C1.

The first package, TF-15-C1, involves the construction of 21 kilometres of main and secondary drainage lines along Al-Wasl Road and in surrounding areas. It will cover Za’abeel 2, Al-Wasl, Jumeirah 1 and 2, Al-Bada’a, Al-Satwa and Dubai World Trade Centre. The estimated $100m contract was awarded to Detech in July, as exclusively reported by MEED.

The second package, TF-15-C2, covers the corridor between Sheikh Zayed Road and Al-Khail Road. It includes about 14km of main drainage lines serving Al-Quoz Industrial Areas 1, 3 and 4, and Al-Barsha 1. In July, MEED reported that CSCEC had won the engineering, procurement and construction contract for this project.

The third package, TF-13-C1, covers Al-Marmoom, where 23km of drainage infrastructure will be developed. According to a source, Arifco has been awarded this contract.

The final package covers Jumeirah and Umm Suqeim, where about 42km of main drainage lines will serve Umm Suqeim 1, 2 and 3; Umm Al-Sheif; Jumeirah 3; Al-Safa 1 and 2; and Al-Manara.

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Earlier, in February, the municipality confirmed it had awarded contracts for five new projects under phase two of the programme to expand and strengthen Dubai’s stormwater drainage network.

These included two contracts awarded to Detech and one to CSCEC for stormwater drainage infrastructure. In addition, two consultancy contracts were awarded for the study and design of drainage systems in selected areas across the emirate.

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Previously, in April 2025, an earlier package of awards was announced under phase one of the Tasreef programme. The overall masterplan aims to expand Dubai’s rainwater drainage capacity by 700% by 2033.

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Nakheel awards $259m Dubai Islands buildings contract
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The package covers 617 residential units across eight buildings, ranging from one to four bedrooms, together with basement structures, infrastructure and community amenities including swimming pools, sports courts and fitness centres.

Phase two comprises 360 homes across four buildings, with main construction scheduled for completion in late 2028.

Phase four includes 257 homes across four buildings, with completion targeted for the second quarter of 2029.

The award follows an earlier contract valued at about AED800m ($218m) awarded to local contractor Metac General Contracting Company for phases one and three, covering 537 homes across seven buildings.

Together, the two contracts total more than AED1.75bn ($476m) and account for all 1,154 planned homes across the 15 buildings of Bay Grove Residences.

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The pipeline forms part of the government’s 2026-31 programme, presented to parliament last week.

The Marrakech-Agadir link is estimated to cost close to MD55bn ($5.5bn) and will cover a 240-kilometre (km) route through the High Atlas Mountains via Chichaoua. Civil engineering structures, including tunnels and viaducts, are expected to account for nearly 70% of the alignment.

In September, the government issued a decree declaring the Marrakech-Agadir and Chichaoua-Essaouira rail corridors to be of public utility, paving the way for land acquisition and expropriation procedures.

Under the long-term masterplan Plan Rail Maroc 2040, Essaouira is expected to connect to the network via a separate line branching off at Chichaoua, designed for operating speeds of up to 200km an hour. The mainline to Agadir is designed for speeds of up to 320km/h.

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The plans follow Morocco’s ongoing MD134bn ($13.4bn) 2024-30 rail investment programme, which focuses on completing the Kenitra-Marrakech high-speed line ahead of the 2030 Fifa World Cup.

The programme also includes developing regional express network services across five regions, electrifying the Fez-Oujda line and completing a freight rail link to the Nador West Med port.

Work on the Kenitra-Marrakech line had reached about 30% by May 2026, with commercial services targeted to begin in September 2029.

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Saudi Arabia’s Sports Ministry has tendered a contract covering early works at King Salman International Stadium in Riyadh.

The scope includes enabling works, site preparation and initial construction activities.

The tender was issued on 11 October, with a submission deadline of 19 November.

The stadium will cover about 660,000 square metres (sq m) and seat 92,000. Facilities will include a 150-seat royal suite, 120 hospitality suites, 300 VIP seats and 2,200 dignitary seats.

The wider development will include sports facilities covering more than 360,000 sq m, including two training fields and fan zones; a closed sports hall; an Olympic-sized swimming pool; an athletics track; and outdoor courts for volleyball, basketball and padel.

The stadium is set to host the final of the 2034 Fifa World Cup and will serve as the Saudi national football team’s main base.

US-based architectural firm Populous is the lead architect for the stadium.

Construction of the stadium is expected to be completed by 2029.

The stadium will be located next to King Abdulaziz Park.

Firms submitted prequalification statements for the main design-and-build contract in February.

Saudi stadium plans

In August 2024, MEED reported that Saudi Arabia planned to build 11 new stadiums and refurbish four facilities for the 2034 Fifa World Cup.

Eight stadiums will be located in Riyadh, four in Jeddah and one each in Al-Khobar, Abha and Neom.

A further 10 cities will host training bases: Al-Baha, Jazan, Taif, Medina, Alula, Umluj, Tabuk, Hail, Al-Ahsa and Buraidah.

There are expected to be 134 training sites in the kingdom, including 61 existing facilities and 73 new venues.

Saudi Arabia was officially selected to host the 2034 Fifa World Cup during an online convention of Fifa member associations at the Fifa Congress on 11 December 2024.

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