The total value of the GCC's 1,153 hospitality projects exceeded Dh544.62 billion ($148.2 billion) in the first quarter of 2017, according to BNC Network, a leading project research and intelligence provider in the Middle East and North Africa (Mena) region.

The GCC's hospitality industry constitutes seven per cent of all active projects in the GCC's urban construction sector. In dollar terms, hospitality projects account for 13 per cent of the total estimated value of the region's urban construction sector, the latest BNC Intelligence, issued by BNC Network, shows.

The latest BNC Intelligence report reflects the growing focus on tourism sector development by the governments of the oil-rich Gulf countries, gradually trying to diversify revenue base and reduce dependence on hydrocarbon.

“With the upcoming mega events such as Expo 2020 in Dubai and the World Cup in Qatar, the GCC governments are obviously preparing themselves for major global events that require additional hotel and tourism facilities that also will help them diversify revenue sources,” Avin Gidwani, chief executive officer of BNC Network, said.

The GCC countries entered into a Customs Union in 2003 as part of a plan to integrate the region’s economy further.

“With the ongoing economic integration process and as the GCC countries prepare to develop a common market and once the physical infrastructure – such as the GCC rail networks connect the major cities – regional tourism sector will get a major boost in the years to come. People from one city will travel to the other for overnight stay and return without having to cross the border formalities – such as the European Union. The region is preparing for such heavy tourism traffic,” Gidwani said.

“There will be a time when people will board a train from Ras Al Khaimah to perform Umrah in Makkah and return to Ras Al Khaimah a day later.”

Sixty-two projects with combined estimated value of over Dh9.1 billion ($2.5 billion) were launched in the first quarter of 2017, BNC Intelligence shows.

In March, there is an increase of one per cent in terms of number as well as in dollar value in the GCC's hospitality projects as compared to February, 2017. In March, seven hospitality projects with a combined estimated value of around $1.1 billion were put on hold in the GCC. The largest hospitality project in dollar terms to be put on hold was Business Park and Hotel located in the heart of Jeddah worth $600 million.

“BNC Intelligence shows around 12 hospitality projects with a combined estimated value of around $945 million moved to construction from other stages during the month. The largest hospitality project in dollar terms to be awarded was extension and renovation of Beach Rotana Hotel located in Abu Dhabi's Tourist Club Area, worth $215 million,” Gidwani said. “Six hospitality projects with a combined estimated value of around $390.5 million were completed during the month.”

UAE Travel and Tourism Industry

The direct contribution of travel and tourism to UAE’s GDP was Dh68.5 billion (US$18.6 billion), or 5.2 per cent of total GDP in 2016 and is forecast to rise by 3.2 per cent in 2017, and to rise by 5.1 per cent per annum from 2017-2027, to Dh116.1 billion ($31.6 billion), 5.4 per cent of total GDP in 2027, according to a latest report by the World Travel and Tourism Council (WTTC).

“The total contribution of travel and tourism to GDP was Dh159.1 billion ($43.3 billion), 12.1 per cent of GDP in 2016, and is forecast to rise by 2.9 per cent in 2017, and to rise by 4.9 per cent per annum to Dh264.5 billion ($72.0 billion), 12.4 per cent of GDP in 2027,” WTTC said in its report. “In 2016 travel and tourism directly supported 317,500 jobs (5.4 per cent of total employment). This is expected to rise by 2.3 per cent in 2017 and rise by 2.4 per cent per annum to 410,000 jobs (5.9 per cent of total employment) in 2027.”

In 2016, the total contribution of travel and tourism to employment, including jobs indirectly supported by the industry was 10.4 per cent of total employment (617,500 jobs). This is expected to rise by 1.8 per cent in 2017 to 628,500 jobs and rise by 2.0 per cent per annum to 770,000 jobs in 2027 (11.1 per cent of total), said the global body.

Visitor exports generated Dh109.8 billion ($29.80 billion), 8.1 per cent of total exports in 2016. This is forecast to grow by 3.3 per cent in 2017, and grow by 5 per cent per annum from 2017-2027, to Dh184.5 billion ($50.2 billion) in 2027, 5.9 per cent of total.

Travel and tourism investment in 2016 was Dh26.2 billion ($7.1 billion), or 7.0 per cent of total investment. It could rise by 11.0 per cent per annum over the next 10 years to Dh74.5 billion ($20.2 billion) in 2027, 11.2 per cent of total 2027, WTTC said.

“According to the Dubai Tourism and Commerce Marketing (DTCM), Dubai Government’s tourism regulatory body, the emirate will need to add 40,000 hotel rooms to the existing hotel inventory of 100,000 hotel rooms and hotel apartments in less than three and a half years – which is more than 13,000 additional rooms per year till the Expo 2020 starts,” Gidwani said. “That’s why major project developers are racing against time to expand the hotel inventory in the emirates as well as introduce new and innovative hospitality concepts in the market.”

Nakheel, the Dubai government-owned property developer, has signed a Dh136 million ($37 million) hotel at Dubai’s Dragon City – its second such project within the same development.

With a total project value of Dh176 million ($47.9 million), the 304-room Premier Inn is one of 16 hotels in Nakheel’s Dh3 billion ($816.7 million) hospitality portfolio and part of a huge new masterplan that is transforming Dragon City into a giant retail, residential and recreational complex of more than 11 million sq ft.

The contract was signed two weeks after Nakheel awarded a construction contract worth Dh184.5 million ($50.2 million) for a second hotel at Ibn Battuta Mall. The 375-room hotel has a total project development value of Dh240 million ($65.3 million). The company is developing two new hotels at the first two of the four Deira Islands – where 128 hotel plots have been sold to investors for the development of hotels and serviced apartments. Nakheel has kept four plots to itself for resort hotels.

Recently Meraas, a Dubai-based master property developer, has announced a major foray into the hospitality sector, with the launch of four hotel brands – Evado, Re Vera, Vivus and MQ, that will strengthen the UAE’s home-grown hospitality sector and complement the growth of the tourism sector. The group has also said it will open two of its hotels – Re Vera and Vivus, on Bluewaters Island, a short hop from Ain Dubai, the world’s largest observation wheel, in 2018.

Schon Properties, a Dubai-based developer, recently announced a deal with Al Hamad Group to deliver 2,550 branded hotel apartments under iSuites – a Dh3.2 billion ($871.2 billion) hospitality development – at Dubai Investment Park. These are some of the projects that reflect the development activities in the hospitality sector. - TradeArabia News Service