A massive $3.63 trillion is being invested in hotels, leisure projects, aviation developments, cruise lines, tourism promotion and supporting infrastructure, across the Middle East.

This is according to the preliminary results of a research programme recently unveiled.

The study covers 13 Middle Eastern countries for the period to 2020 and is to be published in full at the Hotel Show 2008, the Middle East’s leading supplies exhibition to the region’s hospitality sector, taking place at the Dubai International Exhibition Centre from 8-10 June 2008.

The Middle East Industry Outlook 2020 is an update of a groundbreaking research study by Fast Future and Global Futures and Foresight (GFF) on the Future of Travel and Tourism in the Middle East.

The study is sponsored by the Hotel Show, Siraj Capital, Nakheel and Silverjet. Strategic partners on the study are the Pacific Asia Travel Association (PATA) and IMEX Frankfurt.

“This study takes a futures perspective on key trends and drivers shaping the region’s travel and tourism sector to 2020 and beyond and is an invaluable tool to all in the hospitality industry,” said Maggie Moore, Exhibition Director of the Hotel Show 2008, organised by dmg world media, one of the region’s leading exhibition companies.

Fast Future has conducted a detailed validation of development plans with major hotel groups, airlines, airports and travel and tourism boards across the region.

The research identifies plans to invest at least $580 billion in over 900 hotels across the region from Syria to Oman. The study found projected construction costs for the most recent announcements from over 72 developers, investors and operators vary from $10,000 to $5.71 million per room.

“The report highlights the scale of investment opportunities on offer across the sector as well as validating the potential for sector-focused Investment Companies such as RAHALA.  In order to make good investment decisions, reliable data on the industry’s future direction is critical - this is why we are backing this ground breaking study.”  Said Ibrahim Mardam-Bey - Chief Executive Officer of Siraj Capital, sponsor and founding shareholder of RAHALA - a Saudi Arabia based SR 1 billion Hospitality Lodging Investment Company - and one of the founding sponsors of the study.

The largest components of the US$3.63 trillion investment were found to be US$1042 bn for leisure developments and US$1813 bn on tourism promotion and the supporting infrastructure. 

The 19 largest airlines in the region were expected to spend at least $143 billion adding 876 planes to their fleets. The largest buyers in terms of aircraft purchased and total investment are expected to be Emirates - buying 245 aircraft at $60 billion - and Qatar Airways purchasing 150 planes for $52 billion.

The study also looked at 19 major airports and identified a total planned investment of $38.9 billion with the ten largest airports expecting to add capacity for at least 320 million passengers. The two largest spending airports were Dubai World Central (Al Maktoum International) at $8.2 billion and Saudi Arabia’s King Abdulaziz International at Jeddah, which is investing $8 billion.

Following these investments, Dubai World Central would be the region’s largest airport with capacity for 120 million passengers, followed by Qatar’s Doha International which is targeting a capacity of 93 million.

The research also looked at the fast growing cruise market and focused on twelve major cruise lines that between them operate 86 ships in the region. The largest of these operators currently are Royal Caribbean International and Holland America with 21 and 14 ships respectively.  Eight of the Cruise Lines studied have plans for further investment - they expect to add at least 18 ships with a minimum investment of $7.84 billion.

“This report highlights how rapidly the travel and tourism market in the region is developing and emphasises the importance of the high end segment. These are critical reasons why we chose to enter the market with our business class only service. For the future, we think it is essential to develop objective insights on where the travel and tourism market might be heading and this is why we have put our full support behind this crucial study.” Said founding sponsor Lawrence Hunt, Chief Executive of Silverjet - the all business class airline that has recently launched a Dubai - London service.

The research programme will culminate with a major report to be published in June 2008 in time for the Hotel Show. The study began with a Pathfinder Report in May and was followed by a Hotel Outlook 2020 report published in June. The latest report published today marks the start of the next round of research.

The report also highlights six critical factors that could cause turbulence and confusion and have an adverse economic impact in the coming years: the global economic outlook, environmental challenges, human resources, safety and security, infrastructure and information availability and reliability. “We believe that an adverse outcome on any one or more of these factors could act to slow growth or even reduce demand,” said Rohit Talwar, the report’s author and CEO of Fast Future and GFF.
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