According to STR data for December, there is a gap for economy and mid-scale brands in the middle East, comprising currently only 19% of branded hotel supply in the region, while in contrast there exists a bulging pipeline for luxury hotels until 2018.
It is believed that up to 40% of leisure travellers in the region seek budget hotels. Dubai’s decision in 2013 to waive a 10% “municipality fee” for developers of 3- and 4-star hotels is starting to encourage operators to fill that gap, while Saudi Arabia announced plans in June to loosen strict visa requirements to investors. Another possible segment might include theme parks, since 3 billion people live within a four-hour flight of the UAE, and a recent report suggested that the leisure and entertainment market potential in the UAE could reach 45 million visitors by 2021.
Hilton Hotel & Resort, Doubletree by Hilton, Radisson Blu, Rotana Hotels Inns & Suites and Aloft by Starwood make up the top five brands growing in the region.