The hospitality industry in the Gulf Cooperation Council (GCC) region will see steady growth following its sharp post-pandemic recovery, with revenues expected to reach $34 billion by 2026, according to investment banking advisors Alpen Capital.

The latest report by the advisory firm said the industry will return to pre-pandemic levels in 2022, registering 74.8% year-on-year growth, with revenues of $26.3 billion.

The industry will record a compound annual growth rate (CAGR) of 6.6% for the coming years, as hospitality adjusts to steady growth following a rapid post-pandemic recovery, the report said.

Upcoming events such as the FIFA World Cup in Qatar and easing of visa restrictions will contribute to the sector’s growth, Alpen Capital said, as regional governments actively support business, leisure and entertainment development.

“The pandemic has accelerated the adoption of technology and digitization for operators looking to streamline procedures as well as improve overall level of customer experience,” said Sameena Ahmad, managing director, Alpen Capital (ME) Limited.

“The demand for mid-scale hotels, service apartments and Airbnb [accommodations] is also on the rise as it offers flexibility and affordability.”

The largest markets, Saudi Arabia and the UAE, will have CAGRs of 8% and 5.5%, said Alpen, with Kuwait forecast to record a 7.1% growth, Oman 6.3% and Bahrain 2.9%. Qatar’s growth is expected to normalise after the World Cup at 4.3% between 2023 and 2026.

Average occupancy rates across the GCC are expected to rise from 57% in 2022 to 62% in 2026, with the average daily room rate to increase from $145 to $151 in 2026. Revenue per available room will increase from $83 to $93 by 2026, the report concluded.

(Reporting by Imogen Lillywhite; editing by Cleofe Maceda)