The value of hospitality and residential projects under development in the MENA region has crossed $1.9tn, with Saudi Arabia, the UAE, and Egypt accounting for 90 percent ($1.7tn) of the investments, according to a report by real estate consultancy firm Knight Frank.
The latest data from Knight Frank shows that hospitality projects worth $1.2tn are under development in Saudi Arabia, the UAE accounts for $300bn, and Egypt $200bn.
The report underscores the region’s commitment to attract 160 million tourists annually by 2030.
“The Middle East’s travel and tourism sector witnessed tremendous growth with a 46.9 percent increase in its contribution to GDP in 2023, which is the highest of any region in the world,”
said Turab Saleem, partner and head of Hospitality, Tourism and Leisure – MENA at Knight Frank.
“This growth is being driven by a 14.5 percent increase in the number of jobs supported by the sector and a more than $107bn increase in its overall contribution to the GDP,”
The influx of new hospitality and tourism-related projects in the region is also fostering recent trends that add value and efficiency and yield better investment returns.
MENA’s booming tourism sector
The introduction of simplified visa processes, aggressive marketing campaigns, green initiatives, innovation and technology, increased connectivity with new players in the airline sector, and personalized guest interaction are all playing a vital role in the growth of the Middle East’s tourism industry.
Supporting the growth in the MENA’s tourism sector, global real estate consultancy Colliers said a significant volume of hospitality-related transactions is currently at an advanced negotiation stage, with high-profile properties expected to change hands in the coming months.
“There’s a strong appetite for the hospitality asset class – particularly in Dubai and Ras Al Khaimah – from regional and international investors, buoyed by strong operating performance last year and the continued enhancement of the UAE as a top-tier international tourism destination,”
James Wrenn, executive director and head of Capital Markets, MENA at Colliers.
Saudi Arabia’s real estate projects hit $1.25tn
Meanwhile, Knight Frank said the value of Saudi Arabia’s real estate and infrastructure projects has crossed $1.25tn with the value of commissioned projects reaching $250bn.
The consultancy firm’s Saudi Giga Projects Report revealed that Western Saudi remains a central piece in the transformative vision for the kingdom, with real estate projects valued at $687bn expected to be delivered by the end of the decade.
NEOM, the $500bn megacity, is progressing rapidly, with $70bn of projects now awarded, 45 percent of which has been completed.
Riyadh remains a pivotal focus point for Saudi Arabia’s transformation and currently accounts for 18 percent of all real estate and development projects underway, with a combined value of $229bn.
News Source: Gulf Business