Weak economics in some Middle East hotel projects were exposed by the financial crisis followed by the shock of the Arab uprisings in 2011.
“Hotels on their own need to survive and be financially feasible,” Majid Al Futtaim Properties’ executive managing director Salman Haider said.
He said that money was invested in mixed-used programmes where hotels were effectively subsidised by associated residential and commercial developments. “I think we are coming to a stage where we can’t rely on these types of measures,” said Haider, speaking at the 8th Arabian Hotel Investment Conference (AHIC) on 29 April.
Standard Chartered Bank Middle East head of real estate Fergal Harris said events in the past five years have eliminated much of the unwarranted enthusiasm for hotel investment in the region. “We have a more focused Middle East market and one that is now smaller,” Harris said.
AHIC was earlier told that Dubai was consolidating its position as the leading Middle East hospitality hub while countries affected by the uprising were losing ground in the sector.