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Monday, Jun 02, 2025

Saudi Arabia leads Mideast hotel construction activity: STR data  

Saudi Arabia leads Mideast hotel construction activity: STR data  

Saudi Arabia leads the Middle East and Africa’s hotel construction activity with over 40,000 rooms under construction as of March, the latest data from hotel industry monitoring firm STR showed.
With 42,033 hotel rooms, the Kingdom accounts for 35.1 percent of 119,505 total keys under construction in the region.

That places Saudi Arabia only after China and the US — which currently have 299,458 rooms and 154,284 rooms under construction respectively — making it one of the biggest hotel construction markets in the world despite a global slowdown.

The report indicated that the Middle East and Africa was the only region to have an increase in total rooms under contract by 6.4 percent to 249,150 in March 2023 compared to the same period last year.

The region has 84,116 rooms in planning and 45,529 rooms in the final planning stages.

The UAE also played a role in the region’s hotel sector growth, with 22,325 rooms in construction, accounting for 18.6 percent of the total number.

The Kingdom has the third highest number of rooms under construction in the world surpassing Europe’s leaders Germany and the UK.

This comes as the Kingdom’s hospitality sector is witnessing steady growth in key performance indicators. For instance, Riyadh’s hotel occupancy rate hit 75.5 percent in February, the highest figure since 2008, according to data released by STR last month.

Compared to 2019, the occupancy in February jumped 23.4 percent, the average daily rate rose 34 percent to SR801.46 ($213.46), and the revenue per available room increased 65.3 percent to SR605.06.

In Abu Dhabi, the occupancy rate reached 75 percent in February with an ADR of $155 and RevPAR at $116, according to JLL.

Saudi Arabia’s hospitality sector is witnessing rapid growth as the Kingdom plans to become a regional and global hotspot for all segments.

Under Vision 2030, the Kingdom’s market is expected to have 310,000 hotel rooms by 2030 with an investment size of $110 billion, Knight Frank data indicated.

Additionally, Saudi Arabia’s hotel segment is projected to generate $2.51 billion in revenue this year and is expected to reach $3.02 billion by 2027, according to Statista.
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