The value of project investments in the Gulf hotel industry amounted to about $27 billion, according to Hotelier website specialized in hotels around the world.
The site indicated that new hotel projects worth $3.5 billion have been awarded in the region since the beginning of 2020.
Ed James, director of content and analysis at MEED Projects, said: “Despite the challenges presented by Covid-19, the hotel industry is still optimistic about its medium-term outlook.”
“Some $3.5bn worth of hotel construction contracts have been awarded across the GCC over the past 18 months during the height of the pandemic, indicating that investors expect the market to return to normality in the next two to three years when the new projects are due to open.”
Hotelier says that the relatively new term “giga projects” is dedicated to the most ambitious and costly tourism projects in the world. Many these are located in the Gulf countries, the site said, pointing out that tourism projects fall within the Gulf plans for economic diversification.
He added that the countries of the region plan to reduce dependence on oil revenues and move towards new economic sectors such as travel and tourism.
Hotellier said that Saudi Arabia is leading the initiative in the tourism sector in the region through Vision 2030, which has begun to bear fruit in giant projects such as NEOM, the Red Sea project, Diriyah Gate, Al-Mualla and Al-Ula. All of these mega projects will include hotels and tourist resorts.
The hotel sector is at the forefront of the sectors affected by the repercussions of the Coronavirus pandemic, globally and in the Gulf. The closure measures implemented by governments to limit the spread of the pandemic have dropped this sector’s income to unprecedented levels.
With the outbreak of the pandemic in the region in last March, most Gulf hotels and restaurants were forced to reduce the salaries of their employees, give them leave of up to 90 days, and lay off many to reduce financial losses incurred by the cancellation of reservations, and the cessation of tourism.
In another context, the National Center for Statistics and Information in Oman said, at the beginning of this year, that hotel revenues in the Sultanate fell by 62.9%, until last December.
The center’s data showed a decrease in hotel revenues until the end of December 2020 from 3 to 5 stars to 85.77 million riyals ($222.80 million). This is compared to 229.5 million riyals ($596.32 million) at the end of December 2019.
The occupancy rate reached 26.4% at the end of last December, as the number of guests reached 842,491 guests, a decrease of 52.5% until the end of last year.