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HVS Charts Trends in GCC Hotel Development Costs

Published: 25 September 2023

In this joint publication, we outline the main hotel development expenses and recent trends in hotel development and design.

While data suggests that some 200,000 rooms are under development across the GCC, in the current economic environment, it is important to acknowledge the challenges posed by rising borrowing costs, development expenses, and operational expenditures. These factors are increasingly impacting hotel values and project returns, creating a complex landscape for investors and developers. In order to navigate these challenges and optimize project returns, industry professionals should employ various strategies by carefully analyzing market dynamics, implementing robust financial planning, and embracing innovative solutions. Overall, with strategic planning, comprehensive evaluation and a deep understanding of the investment costs, hotel investment and development in the region can offer attractive returns. Some of the noticeable emerging trends include but are not limited to:

The focus on sustainability and environmental awareness has grown, with rising demand for sustainable and eco-friendly hotels. Investors have an opportunity to develop and operate properties with cutting-edge designs, and significant investments in renewable energy, wildlife conservation, and eco-friendly practices.

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