Saudi Arabia anchors $90bn regional hotel pipeline

Saudi Arabia is driving a $90 billion hotel and resort development pipeline across the Gulf and North Africa, accounting for about 110,000 of nearly 200,000 rooms planned across the region, new HVS data show.

The pipeline would expand the region’s existing hotel room supply by about 27 per cent, underlining the scale of investment continuing across major tourism markets despite a more selective financing environment. Around 88,000 rooms are already under construction and another 25,000 are in final planning, while more than 55 per cent of upcoming hotels are expected to be delivered between now and 2030.

HVS said Saudi Arabia represents roughly half of the Middle East development pipeline, with projects concentrated in Riyadh, Makkah, Madinah, Diriyah, NEOM, the Red Sea and Amaala. The mix spans large hotels serving pilgrimage demand, luxury resorts, branded residences and upper-midscale accommodation, broadening a market that has been heavily weighted towards premium properties.

Hala Matar Choufany, HVS president for the Middle East, Africa and South Asia, said the GCC and North Africa pipeline remained among the most significant globally and reflected continued investor confidence in the long-term fundamentals of tourism and hospitality. She said the level of hotel investment also demonstrated the depth of capital supporting regional tourism ambitions.

The data, released ahead of the Future Hospitality Summit World in Dubai, indicate that projects will enter the market in stages rather than through a single wave of openings. HVS said about 44 per cent of the 200,000 planned rooms are currently being built, with much of the balance scheduled for phased delivery through 2030 and beyond.

Delivery timelines differ by market. Saudi Arabia’s large destination projects are expected to unfold in stages extending into the next decade, while the UAE has a shorter-term pipeline, with a significant share of planned supply due between 2028 and 2030. Egypt’s development cycle is spread across several years, particularly in Cairo, the North Coast and Red Sea destinations.

Egypt has about 42,000 rooms in its pipeline, making it the second most active market in the HVS assessment. Development there includes conventional hotels and mixed-use schemes across established tourism centres and newer destinations.

The UAE ranks third and continues to add supply through destination-led projects in Dubai, Abu Dhabi and Ras Al Khaimah. HVS said the market’s relative maturity is shifting attention towards developments designed to widen visitor appeal rather than simply increase room numbers.

The research also points to changes in how hospitality projects are financed. Capital is increasingly being directed towards mixed-use schemes, branded residences and phased developments intended to improve project economics and reduce delivery risk. Funding structures have become more varied, particularly in Saudi Arabia, where major destinations are supported by government-backed investment vehicles and public-private partnerships.

Developers elsewhere in the region are also using branded residences and other mixed-use components to diversify revenue streams and support hotel financing. HVS said this represented a move beyond the traditional reliance on developer equity and bank debt.

Luxury and upper-upscale hotels still account for the largest share of upcoming supply, reflecting sustained investor demand for premium resorts, branded products and integrated destinations. At the same time, upper-midscale development is increasing, particularly in Saudi Arabia, as operators seek to serve a broader visitor base and expand accommodation choices at lower price points.

A separate second-quarter assessment by Lodging Econometrics reinforces Saudi Arabia’s lead, although its methodology and geographic scope differ from HVS. It counted 387 Saudi projects with 105,648 rooms at the end of June, up 13 per cent in projects and 15 per cent in rooms from a year earlier. The same survey put the wider Middle East pipeline at a record 724 projects and 178,003 rooms, with Egypt and the UAE also ranking among the largest markets.