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Hospitality takes a hit
Hotel projects in the GCC are being cancelled or put on hold; only 39 percent of the total will be built on time.
March 25, 2009 3:14 by Dana El Baltaji
A staggering 33 percent of hotel projects planned in the GCC are on hold for longer than six months, and only 39 percent will meet their completion dates, TRI Hospitality Consulting revealed on Wednesday in a report.
The consulting firm also claimed that 13 percent of projects are on hold and 15 percent have been cancelled, reports Arabian Business.
The cancellations and construction delays showcase the effects of the financial crisis on the region’s once booming hospitality sector.
“It is expected that several projects, particularly those not yet under construction, and due to open from 2011 will be subject to further delays or be cancelled,” Emma Davey, associate director of TRI Hospitality Consulting said. “The main pressure on new developments is availability of project financing.”
“The future hotel supply situation will continue to change as developers watch the performance of local and global economies,” she added.
In early March, Maggie Moore, Director of The Hotel Show in Dubai, announced that a total of 61 hotel developments worth $8.8 billion (AED32.3 billion) are due for completion before the end of 2010; 35 hotels will be built in the UAE.
“These are challenging times for everyone but these latest figures show that hotel suppliers continue to have an expanding market in the Middle East,” Moore said at the time.
It is unclear, however, whether the 61 hotels are part of the 39 percent the TRI Hospitality Consulting claims will be built on time, or if that number has now dwindled.