GULF Arab countries have more than $140 billion worth of hotel projects under construction, with just 19 per cent of these projects suspended or cancelled in the face of a global slowdown, a recent survey revealed.

Of 893 hotel projects surveyed in the Gulf, five per cent had been cancelled, 14 per cent put on hold, and 42 per cent were under execution, showed the survey by research house Proleads Global. The rest were under study, planning, bidding, design, or had been completed.
“Given projected increases in demand from 2013 onwards, more hotels will be required if relatively high occupancy levels are to be maintained,” says Proleads director Emil Rademeyer. “With an average completion period of two to three years, 108,600 rooms should come online by 2011.”
A Tri Hospitality research echoes similar sentiments when it revealed that there are an estimated 86,000 confirmed hotel rooms in the supply pipeline for the GCC till 2011. During the second quarter of this year only three per cent of confirmed pipeline hotel keys in the GCC have been put on hold or cancelled, compared to 28 per cent in the period from Q3 2008 to Q1 2009, according to the study.
Furthermore, only 10 per cent of confirmed pipeline hotel keys have been subject to delays over six months, or subject to further delays, since the opening dates recorded as at Q1 2009. This is in comparison to the 33 per cent from Q3 2008 to Q1 2009.
However, it said in the past nine months the projections for total room supply across the GCC in 2010 have dropped by 24,000 keys, due to cancellations and delays. Total supply in 2010 is now estimated at 327,355 keys, this is equivalent to a 6.8 per cent reduction in total room supply expected by 2010, compared to projections in Q3 2008.
“Despite the combined cancellations and delays since Q3 last year, there have also been some new hotel announcements during this period. However, the consolidation period for properties under development is not yet over as the fate of properties on hold is still largely undecided,” says Emma Davey, associate director, Tri Hospitality Consulting.
Meanwhile, Abu Dhabi has become the second most expensive city in the world to stay in a hotel as room rates continue to rise despite a downturn that has seen rates fall in all other major world cities, including neighbouring Dubai, a recent survey shows.
The survey by corporate travel services firm Hogg Robinson Group (HRG) shows hotel room rates in the UAE capital rose five per cent in the first six months of the year compared to the same period in 2008.
HRG said room rates in Abu Dhabi averaged Dh1,390 ($379) in H1 compared to Dh1,330 ($362) a year ago, against a global trend of falling hotel revenues as holidaymakers cut back amid the downturn.
“Abu Dhabi is now in second place and is the only city in the survey to have achieved an average rate growth of five per cent in real terms,” the HRG report said.
And Dubai, where the rates were down to Dh1,003 from Dh1,313 ($273 from $357) slipped one place to eighth most expensive in the ranking.
However, Dubai beach hotels recorded 97 per cent occupancy, the Dubai Department of Tourism and Commerce Marketing (DTCM) said, adding that five-star city hotels had 76 per cent occupancy during the period, while four-star hotels had 81 per cent occupancy. Dubai currently has 58,147 hotel rooms (40,943 hotel rooms and 17,204 hotel apartment rooms), up 17 per cent compared with a year ago.
Overall, UAE hotel occupancy levels dropped 13 per cent in June year-on-year and revenue per available room (RevPar) fell by more than a quarter due to declining travel amid the global economic turmoil, hospitality research firm STR Global said.
RevPar, the key indicator of performance, declined 34 per cent for Dubai hotels – higher than the national average of 27.4 per cent. The downturn has affected several popular holiday destinations in the region, but hotels in locations such as Beirut (Lebanon) and Amman (Jordan) improved their performance during the month.
Muscat (Oman) saw a drop of 31.3 per cent in occupancy to 40.4 per cent, the largest decrease in the Gulf, while hotels in Riyadh (Saudi Arabia) saw a fall of 20.3 per cent to 63.5 per cent.
Istanbul (Turkey) reported the largest average daily room rate decrease in the Middle East.
Before the current downturn, Dubai and Abu Dhabi hotels had enjoyed high occupancy and room rates, outperforming some of the world’s top cities.