Aboudi Asali, executive VP at JLL, brings over 25 years of hospitality expertise, leading hotel advisory services in the MENA region. We leverage his extensive knowledge to explore all aspects of hotel investment and development throughout the region, exposing the challenges and opportunities that exist.
How would you describe the current state of the hotel investment market in the MENA region and where do you see the most growth potential?
In recent years, hotel markets within the MENA region have experienced some of the strongest global performance growth, especially Saudi Arabia and the UAE. Additionally, in 2023, Dubai’s hotel transaction volumes ranked second across EMEA, just behind London but ahead of Paris globally. Moreover, Dubai secured sixth place globally, marking a significant milestone for the emirate’s growing hospitality sector and international appeal. Typically, Abu Dhabi holds the second-highest position, followed by Cairo, Riyadh and Muscat in performance rankings. However, in 2023, Riyadh’s average hotel rates surpassed Dubai’s by approximately 10 percent, due to increased demand and lower supply. Consequently, the sector is seeing considerable interest from both domestic and regional investors across various submarkets and asset types. In light of this, we expect the trend to continue accelerating, with UAE, Saudi Arabia and Egypt remaining prominent on investor radars.
What are the challenges of hotel development and investment in the MENA region?
Despite the relative strength of the hotel sector within the MENA region, developers and investors face several notable challenges today. Specifically, from a development perspective, construction cost inflation and elevated capital costs are the most significant hurdles developers must address. Furthermore, for investors of existing assets, especially those exploring leveraged investments, high interest rates and strong asset valuations pose major concerns. In particular, international investors are finding the current economic environment challenging, given the rising costs and market uncertainties. As a result, both developers and investors must carefully navigate these evolving conditions to achieve successful outcomes.
How do you foresee the impact of geopolitical factors on hotel investments in the region?
Geopolitical factors can significantly impact tourism, especially in the short term, creating fluctuations in regional markets. However, certain markets have demonstrated strong resilience to such influences, particularly Dubai, which is experiencing another record year in 2024. Moreover, despite these challenges, investors tend to focus on the long-term viability of their investments rather than immediate disruptions. As a result, they usually factor in geopolitical risks during their underwriting process to ensure future returns. Therefore, while short-term impacts are inevitable, strong markets like Dubai continue to thrive, supported by strategic investor foresight and planning.
What trends are shaping the future of hotel advisory services in the MENA region?
Since Saudi Arabia’s ambitious plans to become a top global tourism destination, JLL Hospitality has served as a key strategic advisor to stakeholders. This momentum is expected to continue for JLL, especially as many of the Kingdom’s mega projects advance into more detailed analyses of each hotel asset. Additionally, this includes identifying the right brands, operators, and investors to ensure long-term success. Moreover, as markets in the region mature, there is a noticeable rise in demand for professional advisory services across the private sector. This growth extends to asset management and transaction advisory, reflecting evolving market sophistication.
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