insights
This report investigates the current and future state of the leisure construction industry in the GCC
This report investigates the current and future state of the leisure construction industry in the GCC, while also considering how the industry is changing as it migrates from prosperity through recession and back to prosperity.
The thinking behind this approach boils down to two questions:
- Will people travel to and within the GCC?
- Is there enough accommodation?
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Population age demographics and other factors predict an inherent growth in future tourism. While visitor figures are set to slightly decline during 2009, growth in visitor numbers to the GCC is projected once more post 2013.
The relationship between demand and supply in the hotel industry is measured by Occupancy levels. It was found that given increasing demand, more hotels will probably be required to maintain the occupancy level status quo.
Proleads has investigated 513 projects that has, or is constructing 893 hotels. It was found that
- Despite the global economic crises, USD 19.9b is projected to be spent in the GCC during 2009 on hotel construction.
- Although not many new projects have been launched of late, a number of big projects have been launched during 2008. Given the spending cycle of projects, these projects will result in large amounts of cash flow, even in 2009.
- A number of projects are projected to be completing during the third quarter of 2009.
- The UAE has seen a large amount of cash flow being cancelled or placed on hold in the hotel construction industry in the first quarter of 2009.
- The UAE has seen the most cash flowing in the hotel construction industry, while cash flow levels are growing in Saudi Arabia, Bahrain and Qatar. The economic slowdown has affected the hotel construction industry negatively, but the situation is set to recover in spite of cancelled and completed projects mainly due to the spending cycle of numerous projects started early 2008. This effect will however not be sustained as projects are completed.
- The industry is projected to restore its ability to replace cash flow late 2010.
- Despite pressure under the economic slowdown, cash flow will recover slightly before stabilizing during 2010.
Table of content
EXECUTIVE SUMMARY
PROBLEM DEFINITION & APPROACH
UNDERSTANDING DEMAND
__The end Customer
__The Construction Industry
UNDERSTANDING SUPPLY
__Project Status Changes
__Active Cash Flow
__Cash Flow Replacement
__Projection |
List of figures
Figure 1: GCC Age Demographics
Figure 2: Visitors to the GCC
Figure 3: Occupancy levels in the GCC
Figure 4: Hotel construction project status
Figure 5: Hotel construction project status in terms of rooms
Figure 6: New projects in the GCC
Figure 7: Completed projects in the GCC
Figure 8: Projects cancelled in the GCC
Figure 9: Projects placed on hold in the GCC
Figure 10: Historic cash flow in the GCC
Figure 11: Cash flow replacement in the GCC
Figure 12: Cash flow projection in the GC |
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