The UAE hospitality sector is leading hotel development in the Middle East and North Africa region, with an estimated 12,900 hotel keys expected to enter by the end of the year, reaching a total of 90,600 branded hotel rooms.

According to the Colliers International Mena quarterly report, occupancy rates are expected to increase due to strong growth in demand while increased competition from new hotels will result in a slight rate compressing effect.

In 2017, tourist arrivals to the UAE increased with the return of key source markets such as Russia (estimated 98 per cent growth in arrivals to Dubai in 2017) and India, with Indian visitors increasing to an estimated 2.3 million in 2017 from 2.1 million in 2016.

China as a source market to the UAE is still in early stages but is on a fast growth track. Chinese arrivals grew by double digit in 2017 following the introduction of visa-on-arrival.

Hotel development in the UAE significantly increased last year, with approximately 6,000 hotel room openings in 2017, up 8.2 per cent compared to 2016, the report said.

Leisure demand is also expected to increase with the introduction of new anchors such as La Mer, Dubai Safari Park, Dubai Frame, World's longest zipline (in Ras Al Khaimah) and Warner Bros World Abu Dhabi.

Occupancy rates are expected to increase due to strong growth in demand while increased competition from new hotels will result in a slight rate compressing effect.

2018 will be an interesting year for Saudi Arabia as well, as hotel room supply is expected to hit 55,800, an increase of 11,600 rooms compared to 2017. The surplus in supply is expected to be met by growing demand as the kingdom plans to issue tourist visas, which could result in increased leisure tourism.

In 2017, Saudi Arabia experienced a 13 per cent increase in hotel room supply in 2017, reaching a total of 44,200 hotel rooms from 39,000 keys recorded in 2016). Makkah witnessed the majority of the hotel openings, approximately 3,800 keys. accounting for 73 per cent of the kingdom's new supply.

Increased visa quotas for pilgrims resulted in an increase in demand, growing from 1.9 million pilgrims in 2016 to 2.47 million in 2017.

In 2018, occupancy levels are expected to improve following the issuance of tourist visas.

Other regions also experienced a boost in hotel room openings in 2017, with Muscat witnessing a 20 per cent growth in branded hotel supply. Bahrain is also investing heavily in tourism, with tourism infrastructure reaching $13 billion. In 2018, three new luxury properties are expected to enter the Muscat hotel market - Jumeirah Muscat Bay, Kempinski Hotel Al Mouj Muscat and W Muscat. Jumeirah Royal Saray is also expected to open in Bahrain in February. - TradeArabia News Service