MENA Hospitality Market Size, Share & Industry Analysis, By Type (Accommodation, Food & Beverage, Travel & Tourism, and Entertainment & Recreation), By Travel Type (Leisure, Business, Religious, and Others), By Traveler (Domestic and International), By Price (Luxury, Mid-Range, and Economy), By Booking Channel (Direct Bookings, Online Travel Agencies, Tour Operators, and Others), and Country Forecast, 2024-2032

The MENA hospitality market size was valued at USD 262.88 billion in 2023. The market is projected to grow from USD 286.06 billion in 2024 to USD 487.36 billion by 2032, exhibiting a CAGR of 6.89% during the forecast period.

Tourism and hospitality are rapidly growing sectors and essential drivers for the economic growth of any region. According to the UAE Ministry of Economy, a government agency, and the World Travel & Tourism Council (WTTC), the travel & tourism sector in the Middle East generated USD 459.9 billion in 2023, contributing 6.7% to the region's total economy.

The Middle East hospitality and tourism industry is economically essential and relies heavily on consumer spending. The increasing tourist spending across the region significantly favors market expansion. According to the World Travel & Tourism Council (WTTC), in 2023, international visitor spending was over USD 179.8 billion, and domestic visitor spending was over USD 205.3 billion across the Middle East.

Governments across the countries are launching various campaigns and initiatives to boost the tourism & hospitality sector. For instance, in March 2024, the Ministry of Tourism Saudi Arabia announced SAR 42 billion (USD 11 billion) in new investment for the hospitality sector, creating 42,000 new room keys and approximately 120,000 job opportunities.

The COVID-19 pandemic severely disrupted supply chain operations within the hospitality sector, notably throughout 2020. Government decisions to shut down theme parks across countries had a disruptive influence on the travel ecosystem, impeding the market growth. However, the global market has recovered during the post-COVID-19 pandemic phase, given the reopening of theme parks and travel destinations worldwide. 

MENA Hospitality Market Trends

Launching Attractive Discounts & Offers to Attract New Consumers

Leveraging seasonal trends and holiday periods can offer lucrative opportunities for hotels to attract new consumers. Promotional campaigns and offers tied to holidays, festivals, and special events encourage bookings and boost occupancy rates, particularly among budget-conscious tourists. Offering themed packages, discounts on extended stays, and complimentary upgrades can enhance the overall guest experience, favoring the MENA hospitality market growth.

With the rise of staycations and domestic tourism, hotels can attract domestic tourists by offering appealing promotions to residents and nearby communities. For instance, in March 2024, Banyan Tree Dubai, a resort in Dubai, launched its exclusive Eid staycation offer for UAE and GCC residents, providing a 20% discount on its rooms, dining, and spa experiences.

MENA Hospitality Market Growth Factors

Increasing Popularity of Religious Tourism to Encourage New Players’ Entry

MENA is known for its rich history, culture, and religious significance, making it a hub for pilgrimages and religious tourism worldwide. Religious tourism, especially sacred sites, including Mecca, Medina, and Sheikh Zayed Grand Mosque, located in Saudi Arabia, Israel, and Jordan, has been a cornerstone of the region's attraction for religious tourists.

Saudi Arabia, in particular, hosts millions of Muslim pilgrims annually during Hajj and Umrah seasons. These pilgrimages are pillars of the Islamic faith, required by Muslims who are physically and financially able to undertake them at least once in their lifetime. The rising number of pilgrims across the region significantly boosts the hospitality industry’s growth. According to the Ministry of Hajj & Umrah, over 13.55 million pilgrims performed Umrah in 2023, with an increase of over 58% compared to 2019.

Governments across countries are actively promoting halal tourism as part of their economic diversification strategies. Moreover, increasing investments in tourism infrastructure, including halal-friendly hotels, restaurants, and entertainment options, and marketing campaigns targeting Muslim travelers are improving the region’s attractiveness as a global halal tourism destination, encouraging new players’ entry into the regional market.

Rising Number of Hotels and their Capacities to Fuel Market Growth

MENA is witnessing a surge in both inbound international tourists and domestic travelers owing to improved visa policies, enhanced transport connectivity, and rising government support. Moreover, the region's growing popularity as a global tourism destination attracts millions of tourists yearly. To accommodate this increasing influx of tourists, the number and capacity of hotels across the region are increasing. According to the UAE Ministry of Economy, a government agency, the number of hotels across the UAE increased from 1,144 in 2021 to 1,189 in 2022.

The hosting of major international events, including FIFA World Cup 2022 and Abu Dhabi Grand Prix 2023, attracts millions of visitors, necessitating an increase in accommodation facilities to meet the demand. Furthermore, several prominent players in the market are launching new hotels and resorts across the region to strengthen their presence. For instance, in December 2023, Hyatt Hotel Corporation, an Illinois, U.S.-based hotel chain, launched its new hotel, Hyatt Park Marrakech, situated in Marrakech, Morocco. According to the company, the new hotel features 130 guestrooms and suites.

RESTRAINING FACTORS

Increasing Real Estate Costs and Rising War Situation across MENA to Limit Market Growth

The surge in real estate costs is a significant market restraint discouraging new players’ entry into the hospitality sector. Real estate costs across MENA are significantly higher in prime locations such as major destination cities, tourist hotspots, and business districts. Moreover, heightened demand for land suitable for hotel development or expansion significantly increases service costs, making it financially challenging for new entrants to acquire suitable properties at affordable rates and operate with narrow profit margins.

Rising wars and conflicts across countries negatively influence the hospitality sector. The Israel-Gaza conflict has created instability and security concerns across MENA. This ongoing war is hampering tourist arrivals owing to safety concerns. The perception of the region as a conflict zone deters potential tourists and can reduce hotel occupancy rates in neighboring countries, including Egypt, Jordan, and Lebanon, in the near term.

MENA Hospitality Market Segmentation Analysis

By Type Analysis

Increasing Number of Hotels across MENA to Boost Demand for Accommodation Services

Based on type, the market is segmented into accommodation, food & beverage, travel & tourism, and entertainment & recreation.

The accommodation segment dominates the market owing to the increasing number of domestic and international tourists seeking leisure and business. In this respect, the rising number of hotels across the region increases the MENA hospitality market share. For instance, according to the UAE Ministry of Economy, a government agency, the number of hotels across the UAE increased from 1,144 in 2021 to 1,189 in 2022.

The food & beverage segment is expected to grow significantly during the forecast period owing to the growing number of unique food festivals, such as Discover Dubai Food Festival, Specialty Food Festival, and Saudi Feast Food Festival, coupled with the presence of a wide range of restaurants & cafes. In recent months, major market players have launched new restaurants and cafes across MENA owing to the increasing popularity of culinary tourism. For instance, in May 2024, Fifth Flavor, a Pan Asian restaurant, was launched in Dubai.

In February 2024, Café Barbera, an Italy-based coffee chain, announced a partnership with Big Apple Sweets, a UAE-based food service operator, to launch over ten outlets across Saudi Arabia. According to the company, the first store was launched in Riyadh, Saudi Arabia, announcing its entry into the region.

By Travel Type Analysis

Rising Availability of Leisure Activities to Bolster Leisure Segment Growth

On the basis of product, the market is segmented into leisure, business, religious, and others. The leisure segment dominated the market in 2023 and is forecast to dominate the MENA hospitality market share in the coming years. This dominance is primarily due to the increasing availability of various leisure activities, including desert safaris, skydiving, and Nile river cruises across various countries, including Egypt, UAE, and Saudi Arabia. For instance, in November 2022, Dubai Parks & Resorts announced a partnership with the Real Madrid football club to launch a Real Madrid theme park in the Middle East.

The religious segment is growing rapidly owing to the increasing popularity of halal tourism among Muslim travelers and the presence of various Islamic sacred and pilgrim sites, including Mecca, Medina, Sheikh Zayed Grand Mosque, and The Blue Mosque. According to the Sheikh Zayed Grand Mosque Centre, the number of visitors to Sheikh Zayed Grand Mosque, Abu Dhabi, increased by 70% in 2023 compared to the previous year.

By Traveler Analysis

Increasing Number of International Travelers to Trigger Demand for Premium Services

Based on traveler, the market is segmented into domestic and international. The international segment dominates the regional market due to the growing number of international tourists and the increasing popularity of the region as a global tourist destination. Furthermore, governments across countries are increasingly launching new initiatives to boost international tourism across the region and attract new international travelers. For instance, in November 2023, the Gulf Corporation Council (GCC) approved a unified tourist visa, allowing travelers to visit Kuwait, Bahrain, Oman, Saudi Arabia, Qatar, and the UAE on a single visa.

The domestic segment is expected to grow significantly during the forecast period owing to the rising availability of leisure activities and growing religious trips across the region.

By Price Analysis

Expanding Middle-class Population to Accelerate Demand for Mid-range Services

Based on price, the market is segmented into luxury, mid-range, and economy. The mid-range segment dominated the market in 2023 owing to increasing disposable income and an expanding middle-class population. Moreover, the rising number of spontaneous short trips among local and regional travelers triggers the demand for the services within the ‘mid-range’ category.

The luxury segment is poised to grow considerably in the coming years owing to the evolving trend of luxury experiential travel and the growing number of high-net-worth individuals.

By Booking Channel Analysis

Growing Demand for Convenience and Flexibility to Boost Demand for Online Travel Agencies

The market is divided into direct bookings, online travel agencies, tour operators, and others based on booking channel. Online travel agencies emerged as the leading segment in 2023 owing to their wide availability, 24/7 accessibility, and convenient and flexible interfaces.

The direct bookings segment is expected to witness considerable growth in the coming years owing to hotels emphasizing user-friendly websites and applications offering special discounts.

COUNTRY INSIGHTS

The MENA hospitality market report analyzes the service demand across Saudi Arabia, the UAE, Qatar, Kuwait, Egypt, and Algeria. Saudi Arabia emerged as the leading domestic market in 2023. Improving hospitality infrastructure favors the Saudi Arabian market growth. For instance, in November 2023, Marriott International, a U.S.-based multinational hospitality chain, announced plans to expand its footprint in the Saudi Arabian market by adding approximately 40 hotels with 11,000 rooms. The Egyptian hospitality sector is growing rapidly due to the increasing number of international tourists. According to the Government of Egypt, the number of tourists in Egypt increased from 11.72 million in 2022 to 14.9 million in 2023. Furthermore, the country’s rich history and culture and the presence of various UNESCO World Heritage Sites, trigger the service demand.

The growing number of international and domestic tourists in the region, coupled with rising government support promoting tourism across countries, drives the MENA market growth. Moreover, the presence of various religious sites, including Mecca & Medina, and various UNESCO world heritage sites, including Uruq Bani Ma’arid, Qal’at al-Bahrain, and Petra, attracts millions of international tourists to the MENA region. Furthermore, the region hosts millions of religious tourists visiting cultural and religious sites, boosting the demand for hospitality services.

KEY INDUSTRY PLAYERS

Key Players Focus on New Openings and Partnerships to Stay Competitive

Prominent industry participants, including Marriott International, Four Seasons Hotels Limited, and Accor, are adopting multiple strategies, including opening new hotels and resorts, partnerships and collaborations, and providing several premium amenities and facilities to enhance their market share and generate revenue streams. Opening new hotels, resorts, and vacation properties at key locations, including the UAE and Saudi Arabia, with high travel and tourism assist industry participants in expanding their customer base and accelerating sales. Prominent market players also offer sizable discounts and offers to attract prospective customers and establish a long-term business relationship with them.

List of Top Hospitality Companies in MENA/ List of Top Hospitality Companies:

• Marriott International (U.S.)


• Accor (France)


• Emaar Hospitality Group (UAE)


• Hyatt Corporation (U.S.)


• IHG Hotels & Resorts (U.K.)


• Jannah Hotels & Resorts (UAE)


• Jumeirah International LLC (UAE)


• Four Seasons Hotels Limited (Canada)


• Minor Hotels (Thailand)


• Hilton (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• April 2024: Rotana, an Abu Dhabi, UAE-based hotel company, launched its new hotel, Dar Rayhaan, by Rotana in Al Khobar, Saudi Arabia. According to the company, the new hotel features 13 rooms and 20 suites with a 24-hour gymnasium, outdoor swimming pool, and complimentary private parking.


• January 2024: IHG Hotels & Resorts, a Denham, U.K.-based hotel chain, in partnership with Firdous Abha Hotel Holding Company and Aleph Hospitality, signed a franchise agreement for a new-build 110 rooms boutique hotel, Hotel Indigo Abha, in Saudi Arabia.


• November 2023: Minor Hotel, a Thailand-based hotel company, announced the launch of its new luxury resort, Anantara Santorini Abu Dhabi Retreat in UAE. According to the company, the new resort will expand its portfolio across the region. 


• August 2022: Waldorf Astoria Hotels & Resorts, a brand of Hilton hotels, made its debut in Kuwait by launching a luxury hotel with 200 deluxe rooms and suites, Waldorf Astoria Kuwait.


• March 2022:  Taj, a brand of Indian Hotel Company, launched its new Taj Exotica Resort & Spa, The Palm, in Dubai. According to the company, the new hotel features 325 rooms and suites with Jiva Spa and various culinary experiences.

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on key aspects, such as leading companies, type analysis, traveler type, traveler, price and booking channels. Besides, it offers insights into the market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors that have contributed to the growth of the market in recent years.

Report Scope & Segmentation