Aug. 17–DUBAI — Dubai has been placed ahead of its neighbours in the Middle East and Africa region, with the most number of hotel rooms under construction.

With 24,832 rooms in 85 projects in construction, Dubai overtook the Holy city of Makkah with 23,816 in 18 projects, STR revealed. Riyadh was next with 6,712 rooms in 30 projects.

STR's July 2017 Pipeline Report shows 166,166 rooms in 590 hotel projects under contract in the Middle East and 56,925 rooms in 308 projects under contract in Africa. Under contract data includes projects in the in construction, final planning and planning stages but does not include projects in the unconfirmed stage.

The under contract total in the Middle East represents a 6.6 per cent increase in rooms under contract compared with July 2016. Specifically in the in construction phase, the Middle East reported 95,089 rooms in 301 projects. Based on number of rooms, that is a 14.3 per cent increase in year-over-year comparisons.

The supply expansion, however, has left many experts worried about the hospitality sector's performance. Overall, hospitality markets witnessed a softer performance in the first half of 2017 when compared to the corresponding period in 2016.

The majority of markets experienced a drop in RevPAR due to a slower global economy, as well as by the drop in oil prices. The summer months, typically seen as the low season in the majority of Mena hospitality markets, are expected to experience lower occupancy and room rates compared to the first half of the year.

However, Yousef Wahbah, Mena head of transaction real estate at EY, noted that starting from September, there will be an increase in the hospitality market's performance in some of the Mena cities due to the annual Hajj pilgrimage, as well as regional trips undertaken by families during the long weekends for the upcoming holidays. Regional events and global forums will also bolster the performance of the regional market.

Laurent A. Voivenel, senior vice-president of operations and development for the Middle East, Africa and India at Swiss-Belhotel International, also agreed that the UAE as a whole will witness high hotel occupancies during the Eid Al Adha weekend.

"Beach hotels and family resorts will certainly be the first ones to fill up," he said.

"In addition, to increase in visitors from the neighbouring countries and GCC, a lot of families in the UAE will opt for staycations to explore the local hotels and attractions that will greatly help business. We certainly expect an increase in the volume of business at the various restaurants across Dubai which will greatly help boost numbers at a time when we need it."

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