Breaking Travel News has been covering the transformation of tourism in the Middle East for long enough to remember when many of today’s realities were dismissed elsewhere as overly ambitious plans.
Dubai becoming one of the world’s great tourism and as Al Khaimah emerging as a serious luxury destination. Branded residences becoming a major asset class. Governments putting tourism at the centre of economic diversification
The easy mistake today is to swing too far in the other direction and assume that every ambitious project will work simply because so much has worked already.
After three days at FHS World 2026,
After three days at FHS World 2026, that is where I think the conversation has become considerably more interesting.
BTN recorded 37 interviews with government ministers, investors, hotel CEOs, developers and destination leaders against a backdrop of extraordinary numbers. Around US$90 billion of hotel investment and 200,000 rooms sit in the GCC and North Africa development pipeline, while more than 200 investors representing over US$6 trillion in assets under management gathered in Dubai.
We have moved beyond asking whether this region has the ambition or capital to build. It clearly has both. What matters now is what gets built, what generates demand and what ultimately delivers a return.
Government support remains a genuine competitive advantage
One of the most important conversations we had
One of the most important conversations we had was with H.E. Abdulla bin Touq Al Marri, UAE Minister of Economy and Tourism, who was recognised with the FHS Leadership Award for his role in initiatives including the Emirates Tourism Council and UAE Tourism Strategy 2031.
H.E. Abdulla’s presence, alongside the support of other senior dignitaries and government leaders, was significant. In other parts of the world, tourism can still find itself fighting for attention against supposedly more important industries. That is emphatically not the case here.
The UAE Tourism Strategy 2031 targets a tourism economy worth AED450 billion, but what interested me in our interview was where H.E. Abdulla sees the next opportunities. He identified longevity and medical tourism as one of the most compelling investment areas for the UAE over the coming five to ten years.
We were hearing versions of the same story
We were hearing versions of the same story from developers and operators. Wellness is moving into residences, healthcare is beginning to overlap with hospitality, and the definition of luxury is shifting towards longevity, privacy and quality of life.
That alignment matters. One of the lessons from covering tourism markets around the world is that private capital can do a great deal, but it struggles when infrastructure, a directions
The Gulf has understood this better than most.
Capital has become more discerning
There is plenty of money looking at hospitality, but the days when an ambitious rendering and a global brand were enough to make an investment case are disappearing.
Saudi Arabia alone has approximately 100,000 new rooms
Saudi Arabia alone has approximately 100,000 new rooms in its pipeline, equivalent to around 27 per cent of existing inventory. We remain hugely positive about Saudi tourism, but nobody should pretend absorbing that much supply will be straightforward. The hotels need guests, the restaurants need customers, and destinations need sufficient reasons for travellers to return once the novelty of visiting somewhere new has passed.
That is why some of the investment conversations at FHS were more important than the headline pipeline figures.
Camil Yazbeck of Accor noted that hotels have moved from number 11 to number three among 15 global real estate asset classes. Brookfield’s Jad Ellawn made the complementary argument from a capital perspective: when assets in mature Western markets are trading at cap rates below financing costs, investors will naturally look for markets offering better economics.
The Gulf has a compelling case
The Gulf has a compelling case. Saudi Arabia is committing approximately US$120 billion to tourism investment, alongside around US$31 billion in Oman, US$27 billion in the UAE and US$22.5 billion in Qatar.
But Hamza Farooqui of Millat Group provided the line I think developers should remember: “Capital doesn’t want dreams and stories. Capital wants certainty.”
BTN has covered plenty of dreams and stories over the years. The next stage is about cash flow, occupancy, rate, yield and return on invested capital. That isn’t less exciting. It is evidence of a market maturing.
The hotel is no longer the whole investment
Another thing that became obvious through our conversations
Another thing that became obvious through our conversations was how inadequate the word “hotel” is becoming to describe many of the projects being developed across the region.
BTN spoke with Marc Dardenne of Modon Hospitality as Modon unveiled Affinity, a resort brand organised around five experiential worlds: Family, Adults Only, Adventure, Wellness and Urban.
The launch interested us because it reflects a much broader change. Developers are no longer necessarily starting with a hotel and adding amenities around it. They are creating mixed-use destinations in which hospitality, branded residences, F&B, wellness, retail, entertainment and culture work together commercially.
That is an important distinction
That is an important distinction. A hotel can make money from its rooms. A successful destination can create value across every component of the development.
Philippe Zuber of Kerzner described the changing definition of luxury as a move away from status towards time, privacy, experience, innovation and longevity. I think he is right. Another expensive building filled with expensive materials is not, by itself, innovation.
The product has to become more interesting.
Branded residences need to prove the premium
This is particularly true of branded residences, where the numbers are becoming extraordinary.
There are more than 2,000 completed or pipeline branded residence projects globally, MENA is forecast to grow by 249 per cent over the next five years, and the average global branded residence premium has reached 44 per cent.
BTN has watched the branded residence boom accelerate
BTN has watched the branded residence boom accelerate across Dubai and spread into Abu Dhabi, Saudi Arabia and other regional markets. There is clearly enormous consumer appetite for the product.
But I am increasingly interested in what happens next.
Jeff Tisdall of Accor One Living said at FHS that “the brand is simply no longer enough.” That is probably overdue.
If a buyer is paying a 44 per cent premium, the industry has to demonstrate what that premium buys beyond a logo, concierge and branded toiletries. The real measure of success will come several years after handover, when owners discover whether the service proposition has survived and the secondary market establishes what somebody else is prepared to pay.
That is when we will find out which brands genuinely create residential value.
Wellness is becoming much more than a spa
Our conversation with Amit Arora of Arada brought
Our conversation with Amit Arora of Arada brought another fast-moving part of the market into focus.
Wellness-branded residences can command premiums of around 30 per cent, while stays at wellness properties can be around five days longer on average. More importantly, the development conversation is moving towards air and water quality, light, acoustics, MEP systems, sleep, nutrition and diagnostics.
That is a substantial departure from the old hospitality definition of wellness, which too often meant allocating some basement space to a spa and putting a healthier option on the breakfast menu.
Combined with H.E. Abdulla’s comments on longevity
Combined with H.E. Abdulla’s comments on longevity and medical tourism, I think this is one of the areas worth watching most closely. There is government interest, consumer demand and a potentially significant real estate premium. Those three things rarely go unnoticed by capital for long.
Never underestimate the importance of the airline seat
One of the defining moments of FHS was watching Sir Tim Clark receive the Lifetime Achievement Award from H.H. Sheikh Ahmed bin Saeed Al Maktoum for more than four decades of contribution to global a
Jonathan Worsley captured Sir Tim’s impact on Dubai brilliantly: “Every hotel room in the city is easier to fill because of the seats that he puts in the sky.”
We sometimes talk about hotel pipelines as though
We sometimes talk about hotel pipelines as though demand simply appears once the keys are handed over. It doesn’t. Connectivity creates markets.
Dubai’s hospitality industry cannot be separated from Emirates. Abu Dhabi’s tourism ambitions cannot be separated from Etihad. Saudi Arabia can build some of the most spectacular resorts in the world, but their commercial success will still depend on getting sufficient numbers of people there conveniently and at the right price.
The same applies to infrastructure, attractions and events. A hotel room has limited value in isolation. It becomes considerably more valuable when it sits inside a functioning tourism economy.
That, more than any individual mega-project, is what
That, more than any individual mega-project, is what the Gulf has been particularly good at building.
Across our conversations with H.E. Abdulla bin Touq Al Marri, Marc Dardenne, Raki Phillips, Agnès Roquefort, Amit Arora, Carlos Diez de la Lastra, Jonathan Worsley and many others, nobody needed to convince us that the opportunity is enormous. We can see the investment, the infrastructure and increasingly the results.
What interested BTN at FHS World 2026 was something more fundamental. The conversation is finally becoming as much about performance as pipeline.
That is a healthy development for a region with US$90 billion and 200,000 rooms riding on what happens next.
Watch the complete Breaking Travel News interview series from FHS World 2026:
https://www.breakingtravelnews.com/videos/playlist/fhs-world-2026/
Source: www.breakingtravelnews.com
