The Gulf Cooperation Council (GCC) hospitality sector is booming, fueled by a surge in tourism and significant investments in hotel infrastructure. The UAE and Saudi Arabia are leading the charge, ranking among the top 15 most visited countries globally. In 2023, the UAE welcomed 28 million visitors, while Saudi Arabia attracted 27.4 million, solidifying their positions as the 12th and 13th most popular destinations worldwide. This surge in tourism has spurred massive hotel expansions across the GCC.
The region is collectively planning to add a staggering 392,000 hotel rooms by 2030, with Saudi Arabia accounting for a significant 80% of this growth. The Kingdom is projected to add 320,000 new hotel keys by the end of the decade, driven by strategic government initiatives and substantial investments in tourism, leisure, hospitality, and aviation infrastructure. Dubai, a global tourism hub, emerged as the third most visited city in 2023, attracting 17.2 million visitors to its 154,000 hotel rooms. This momentum has continued into 2024, with 9.3 million tourists visiting Dubai in the first half of the year, reflecting a 9% year-on-year growth.
The travel and tourism sector plays a pivotal role in the GCC’s economic transformation. It contributed $223.4 billion to the region’s GDP in 2023, supported by 76.2 million tourist arrivals who spent $135.5 billion, a 45.3% increase compared to 2022. Key national initiatives like Saudi Arabia’s Vision 2030, aiming to attract 150 million visitors by 2030, and the UAE’s Dubai Economic Agenda (D33) are driving the tourism sector’s growth.
While the GCC hospitality sector is flourishing, performance varies across the region. The UAE boasts the highest average hotel occupancy rate in the region, reaching 80% from January to May 2024, with a revenue per available room (RevPAR) of $155. The UAE is the largest hospitality market in the GCC, with 212,000 hotel rooms, 154,000 of which are in Dubai. This supply is expected to grow by 10% to 232,000 rooms by 2026.
Saudi Arabia, with an average daily rate (ADR) of $198 and a RevPAR of $127, recorded a more modest occupancy rate of 64%. The Kingdom’s hotel room supply, currently at 159,790, is forecasted to increase by 29% to 205,500 rooms by 2026. Riyadh, in particular, is poised for significant growth, with its hotel stock expected to rise by 46% to 32,500 rooms by 2026.
Qatar’s tourism sector continues its upward trajectory, benefiting from the successful hosting of the 2022 World Cup. The country witnessed a 58% increase in visitors in 2023, reaching 4 million, with 28% of visitors originating from neighboring GCC countries. Between January and May 2024, Qatar’s ADR increased by 8.3% to $127, with occupancy rates climbing to 70%, resulting in a 44% rise in RevPAR to $90. Bahrain’s hotel market is also on an upward trajectory, with quality room supply projected to reach 20,600 by 2026, up from the current 19,000.
Further bolstering the GCC’s hospitality growth is the burgeoning cruise industry. New cruise terminals across the UAE, Oman, Qatar, and Saudi Arabia have established the Middle East as an emerging cruise tourism hub, generating $200 million in revenue in 2023. The cruise industry in the GCC is projected to grow at an annual rate of 9.9% over the next five years.
As of mid-2024, the GCC’s total hotel room stock stood at 464,465, with 46% located in the UAE and 34% in Saudi Arabia. This supply is expected to rise by 17% to 544,250 rooms by 2026. Leading hotel operators in the region include Accor, with 55,335 existing rooms and 11,436 in the pipeline, and Marriott International, with 49,623 rooms and 10,722 in development, both set for completion by 2026. The GCC’s hospitality sector continues to demonstrate its resilience and growth potential, solidifying its position as a major player in the global tourism landscape.
