Despite a period of relatively weak performance in the hospitality sector in recent years, the Middle East and North Africa (MENA) region is poised for a strong rebound in 2024. Developers from the Middle East and North Africa are reportedly aiming to launch hospitality projects valued at over $60 billion, covering all stages from design to tendering, according to Al-Qabas.
Data shows that investment in hospitality construction in the MENA region decreased in 2023 to $6.2 billion, marking the lowest level in three years and falling below the five-year average. However, a notable shift is occurring as a significant number of contracts were awarded in 2024, signaling a change in momentum. Projects worth $5.2 billion have already entered the contracting phase this year, indicating a more effective transition from design to execution than in previous years.
Contract Awards and Country-Specific Activity
Saudi Arabia led the region in total awarded contracts, securing deals worth $4.4 billion. The United Arab Emirates followed, with project awards exceeding $1 billion. Other countries also reported varying levels of project activity, though with more limited contributions to the overall figures.
In 2025, projects valued at $8.6 billion are expected to reach the tendering phase, of which $3.9 billion are currently in the pre-qualification stage and $2.2 billion are under evaluation. Another $2.5 billion worth of projects are anticipated to enter the tender pipeline soon. If these estimates hold, 2025 could become the most active year for hotel-related construction since 2015, with an estimated $410 billion in contract opportunities projected across the region.
Design Phase Projects Show Upward Trend
The value of projects in the design phase reached $15 billion this year, reflecting a 270% increase compared to the same period last year. Notably, Egypt launched a major tourism initiative involving a 2,300-hectare coastal master plan worth $21 billion. This surge signals renewed investor interest and suggests that regional governments are prioritizing tourism as a pillar of economic diversification.
In Saudi Arabia, nearly half of all hospitality investments in the region are concentrated. The kingdom reported $41.6 billion in projects, including a $24.4 billion project currently in the design phase. High-profile developments include the $7 billion Red Sea Island resort and the $3.8 billion Al-Ula tourism heritage project, which is nearing the design phase’s completion.
Major Projects Across the Gulf
The UAE and Oman have emerged as key hubs for ongoing hospitality development. In Dubai, the $1.5 billion Creek Harbour Tower is among the most prominent projects. Other initiatives include a $1.3 billion JW Marriott Resort in Oman and two $500 million luxury resorts under the jurisdiction of Oman’s Ministry of Tourism and Oman’s Tanfeedh program.
These developments reflect a broader regional push to expand tourism infrastructure and attract international visitors. The integration of large-scale projects in smaller markets such as Oman and Lebanon suggests an inclusive strategy to distribute investment beyond traditional hubs.
Forecast: Measurable Growth Expected
Industry observers predict that if only a portion of the $56 billion worth of design-phase projects proceeds to implementation, 2025 will likely witness a major spike in awarded contracts. The second quarter of 2025 is expected to be particularly active, especially as $2.5 billion worth of projects are already in the evaluation stage. Once these reach approval, the pace of hospitality development may significantly accelerate.
The strategic emphasis on high-value hospitality infrastructure across the region suggests that governments and private investors alike see tourism as a cornerstone of future economic stability. This is particularly relevant given the diversification efforts being implemented in major oil-producing nations, which are seeking sustainable alternatives to fossil fuel revenues.
Conclusion
The MENA region is on track to witness a substantial recovery in hospitality-related construction. With project values in the design and tendering phases reaching unprecedented levels, and with several high-profile developments already underway, 2025 is likely to mark a turning point for the industry. Saudi Arabia and the UAE remain at the forefront, but countries across the region are increasingly contributing to this growth trajectory. The upcoming period may offer a window of opportunity for stakeholders seeking to capitalize on regional economic shifts and evolving travel trends.
