The number of hotel projects planned in the Middle East declined by 17 percent in the third quarter of 2009, according to a new report by a hospitality research firm.
A report by Lodging Econometrics, a US-based hotel real estate research company, found that the total number of projects in the pipeline in the Europe, Middle East and Africa region fell to 1,396 projects in the third quarter of 2009, a decline of 21 percent. The total number of rooms planned fell to 305,170 in the same period, a drop of 18 percent.
The decline in projects and rooms in the Middle East was not as steep. The total project pipeline fell 17 percent to 460 and the number of rooms planned declined 15 percent to 140,061.
The decade-long surge in Middle East pipeline totals peaked in Q2 2008 and has declined in each of five quarters since, the report said.
"The impact of the global recession was late in coming to the Middle East, but now demand is off strongly and room rates have plummeted. This, combined with growing concerns over slowing economies and financing in the region, has dampened developer sentiment considerably over recent quarters," claimed the report.
Dubai had been the star performer in the Middle East and the report said there were 105 projects and 41,233 rooms in its total pipeline, with 65 percent of the projects classed as 'under construction'.
This follows a report last month that Dubai hotels posted the largest drop in room revenues in the Middle East region in October, compared to the same month in 2008.
The emirate posted the largest average daily rate (ADR) decrease, falling 29.3 percent to $264.73, while revenue per available room (revPAR) fell more than 35 percent to $198.22, according to latest research by STR Global.
In the ADR category, Muscat was the next worst performer with a 12.8 percent decrease to $269.79 while the Oman capital city also fared badly with revPAR decreases of nearly 28 percent to $178.39.
