DUBAI—In June 2011, the global credit crisis hit the Middle East hospitality market hard. Many of the world's largest new hotel projects are in cities such as Dubai and Abu Dhabi, and more than a few had to cut back to skeleton crews or postpone work.
Since the start of 2012, higher oil prices have meant more movement for hotels in this region, though political unrest has still kept down travel. However, Dubai received a large spark in February, with Bethesda, MD-based Marriott International Inc. confirming it will open the world's tallest hotel there in the fourth quarter. The 1,608-room JW Marriott Marquis Dubai is being developed by the locally based Emirates Group airline company.
At 1,164 feet, the twin buildings will be the highest dedicated hotel property in the world, at a cost that has reportedly increased to $490 million. "The hotel sends a strong signal about how Marriott views Dubai's growing importance and global influence," a spokesman tells REAL ESTATE FORUM.
The property will also be the biggest hotel in the country by number of rooms when it is completely open next year, in anticipation of garnering much of the country's conference business. Rupprecht Queitsch, general manager, said in a statement that in addition to Emirates Group's plan to bring in leisure travelers, the hotel should attract a lot of business from foreign firms now opening offices in the country. The conference business is expected to contribute $106 billion to the country's GDP. "The hotel will fill a gap in the market where groups of up to 1,000 people can meet, sleep and dine under one roof, in one location," Queitsch said.
While Dubai and Abu Dhabi are maturing markets, the new growth area in the Middle East, and in the world, is Saudi Arabia, says Lodging Econometrics president Patrick Ford. His Portsmouth, NH firm tracks hospitality development pipelines around the globe, and he says the country has the sixth-largest number of new hotels planned. Many of the new properties are in the Makkah province, which includes the cities of Mecca and Jeddah. Both cities are seeing massive new mixed-use development projects, including the $20 billion Kingdom City project in Jeddah.
Hyatt Hotels Corp. recently joined with local firm Naseel Holding Co. to build three new hotels here, including the 400-room Grand Hyatt Jeddah, 240-key Hyatt Regency Jeddah and the 275-room Park Hyatt Riyadh. The projects will double the amount of planned Hyatts in the country to six by 2016. Currently, the only Hyatt property is the Park Hyatt Jeddah-Marina, Club and Spa, which opened in 2009.
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