The hotel construction pipeline in the Middle East expanded in the first quarter of 2025, reaching 634 projects and 158,656 rooms, according to the latest data from Lodging Econometrics.

This marks a year-on-year increase of 4% in projects and 10% in rooms, reflecting continued momentum in the region’s hospitality development.

Strong growth in active and upcoming hotel projects

Of the total pipeline, 327 projects comprising 84,434 rooms are currently under construction—an 8% rise in projects and 5% in rooms compared with Q1 2024.

A further 158 projects with 47,201 rooms are scheduled to break ground in the next 12 months, a significant year-on-year increase of 19% in projects and 55% in rooms. The early planning stage accounts for 149 projects and 27,021 rooms.

New hotel development activity remains robust, with 41 projects representing 9,068 rooms newly announced during the quarter.

Construction also began on 39 projects with 6,910 rooms—up 63% and 21%, respectively, from the same period last year.

Luxury and upper upscale segments reach new highs

The luxury and upper upscale hotel segments saw record growth in the region’s pipeline. Luxury hotel construction hit an all-time high with 185 projects and 42,268 rooms, while the upper upscale segment reached 153 projects and 37,946 rooms.

These two categories now account for more than half of all pipeline projects and rooms in the Middle East.

Conversions from other property types also set a new record, with 55 projects and 12,436 rooms undergoing brand transformation into hotel operations.

Saudi Arabia leads regional expansion

Saudi Arabia continues to dominate hotel construction in the Middle East, with 319 projects and a record 85,416 rooms in the pipeline. Egypt follows with 125 projects and 28,768 rooms—both figures also representing new highs.

The United Arab Emirates holds 102 projects and 27,279 rooms, followed by Oman and Qatar with 27 and 20 projects, respectively.

On a city level, Riyadh leads with 87 projects and 17,519 rooms, followed by Dubai (56 projects/15,073 rooms), Jeddah (50/10,386), Cairo (45/10,218), and Makkah (24/17,386).

Together, these five cities account for 94% of all projects and 95% of total rooms under development in the region.

New hotel openings forecast to accelerate through 2025 and 2026

The first quarter of 2025 saw the opening of nine new hotels, adding 2,130 rooms.

Lodging Econometrics forecasts an additional 99 hotel openings with 23,505 rooms by the end of the year, bringing the full-year total to 108 hotels and 25,635 rooms.

Looking ahead to 2026, a further 109 hotel openings are expected, contributing 20,806 rooms across the Middle East.

These projections suggest sustained growth in the region’s hotel sector, driven by major tourism, infrastructure, and economic development initiatives.