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Dubai and Abu Dhabi new hotel openings
The Middle East will see 99 new hotels and 25,829 hotel rooms open in
2009, followed by 110 hotels and 31,725 rooms in 2010, with a majority
of these openings in Dubai and Abu Dhabi, according to Lodging
Econometrics, a global firm tracking all hotel real estate, including
the development pipeline and the sale and transfer of lodging real
estate.
In its lodging forecast report and construction pipeline
report on Europe, Middle East and Africa (Emea), Lodging Econometrics
said in the first quarter of 2009, a total of 68 new hotels with 11,924
guest rooms opened in the Emea region, with about 60 per cent of these
new guest rooms in Europe and 28 per cent in the Middle East.
"The
global economic crisis, which has affected credit availability and
caused decreases in consumer and business travel, resulting in
occupancy and room rates declines throughout Emea, is having a serious
impact on lodging development," Lodging Econometrics said in its report.
"New
openings in the Middle East and Africa are poised to accelerate each
year into 2011," the report said. It said total new openings in Europe
for 2009, at 277 hotels and 38,879 rooms, will be down 10 per cent from
2008. Whereas, guest rooms are expected to bounce back and set a new
high in 2010, with 278 new hotels and 47,464 rooms scheduled to open.
Further,
at 477 hotel projects and 142,702 hotel guest rooms, the Middle East's
total pipeline has fallen 14 per cent and 13 per cent, respectively,
from a peak in the second quarter of 2008, as per the findings.
Also,
with more than 53 per cent of the region's total projects currently
under construction, new hotel openings in the Middle East are expected
to accelerate in 2009, 2010 and into 2011 "as large, iconic projects
come online", the report said.
The pipeline in Dubai alone
stood at 124 hotel projects and 48,558 guest rooms, representing 34 per
cent of all guest-room developments in the region, according to the
report.
It said Dubai's average hotel project size is 392
rooms, "one of the highest for any country or market worldwide, second
only to Las Vegas".
At the same time, Dubai-based market
research firm Proleads had said recently the economic slowdown has
resulted in the cancellation of about 6,500 rooms in the UAE in 2009,
with about five per cent of the 893 planned hotel projects been
cancelled.
The UAE, meanwhile, accounts for a majority - 62
per cent - of the planned 893 projects in the GCC, followed by Saudi
Arabia at 17 per cent.
According to Proleads data, while 14 per
cent hotel projects in the UAE are on hold, 15 per cent are in design
stages, eight per cent planned and nine per cent completed.
The
Proleads data further revealed that currently Gulf countries are
constructing 306 new hotels, with 108,600 rooms budgeted at $140
billion (Dh514bn). "With an average completion period of two to three
years, 108,600 rooms should come online by 2011," Emil Rademeyer,
Director of Proleads, recently told Emirates Business.
He said the UAE hotel sector will see about $20bn of cash flow into hotel projects under execution in the UAE in 2009.
"The
economic slowdown has resulted in much more cash flowing out of the
hotel construction sector than into it. The industry is projected to
restore its ability to replace cash flow by late 2010 with more flowing
into the industry than out of it by 2011," said Rademeyer.
Africa
will see 42 new hotels and 8,864 rooms come online in 2009, with a
further 54 hotels and 10,072 rooms in 2010, according to the report.
It
said the total pipeline in Africa is 174 hotel projects and 35,253
rooms, a three per cent decline by projects and four per cent by rooms
from the peak.
With 47 projects and 9,175 rooms, Morocco makes
up 27 per cent of the continent's total pipeline projects, followed by
South Africa with 25 projects and 4,250 rooms; and Nigeria with 16
projects and 3,939 guest rooms.
Europe's construction
pipeline, on the other hand, stands at 912 projects and 153,189 rooms
at the end of the first quarter of 2009, down 11 per cent from 2008's
second-quarter cyclical peak.
"Of the total pipeline, 457
projects and 78,155 rooms are under construction, which is the lowest
level seen since the third quarter of 2007.
"Project and room
counts in the 'start construction' in the period up to March 2010 and
'early planning' stages remain high, as project migration towards
'under construction' is significantly slowed by the lack of attractive
financing," the report said.
At 19 projects and 5,056 rooms,
construction starts in the Middle East witnessed a decline of 50 per
cent from their peak "as lending and operating concerns are now
belatedly impacting real estate development here, as they did much
earlier in other parts of the world", the report said.
It
added: "Construction starts in all three regions are continuing their
downward trend that began a year ago, as the lack of available capital
keeps a brake on project migration up the pipeline towards 'under
construction', causing a backlog of 'stalled' projects. In Europe,
construction starts are at a low of 68 hotel projects and 10,839 rooms
and are expected to trend lower."
Meanwhile, cancellations and
postponements in the Middle East moderated in the first quarter of 2009
to 32 hotel projects and 8,178 guest rooms.
Dubai saw nine projects cancelled, six of which were "under construction".
Overall,
project cancellations and postponements remain at high levels, said the
report. "The availability of financing is so restrictive and lodging
operation declines are impacting so significantly that, of the 116
cancellations and postponements reported, 51 or 44 per cent were
already under construction and abruptly halted," it said. Of the 78
projects and 12,120 rooms cancelled or postponed in Europe, 22 projects
were in the United Kingdom and 14 in Spain. Out of Europe's total 78
cancellations, 36 projects were already under construction, as per the
Lodging Econometrics' findings.
The report further stated that
in the first quarter of this year, all three regions reached trend line
lows for new project announcements (NPAs) into the pipeline, as the
lending and operating environment continued to impact developer
sentiment.
It said: "About 79 new projects and 12,514 rooms were announced in Europe, 36 of which are in the UK.
"In
the Middle East, 22 new projects and 6,801 rooms were announced, with
five each in Egypt, Saudi Arabia and Abu Dhabi. And 18 projects and
2,642 rooms were announced in Africa, four in Morocco."
The Emea
Construction Pipeline Reports include development for the three stages
of construction, three-year forecasts for new hotel openings, two years
of prior new openings and current supply, according to Lodging
Econometrics.
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