Regional hospitality industry continues to spend heavily on hotels during 2010 despite turbulent global economy. Cash expenditure in the GCC hospitality industry is set to reach more than $1.17 billion this year, according to the organisers of The Hotel Show. This is despite a tumultuous global economy with major developed economies recording budget deficits and colossal sovereign debt.

The report was produced by the renowned Dubai -based research company Proleads for The Hotel Show, which is the Middle East’s leading dedicated trade event for the hospitality and leisure sector and next takes place at the Dubai International Exhibition and Convention Centre from 18-20 May 2010.

The Proleads figures show estimated cash expenditure this year on hotel projects under construction across the GCC will top $1.17 billion. Unsurprisingly the bulk of that spending power is in the United Arab Emirates with $463.8 million, however what is surprising is that Oman will eclipse Saudi Arabia this year spending $269.2 million as opposed to the Kingdom’s $245.5 million. Qatar then leads the rest of the GCC with an estimated spend of $100.3 million, followed by Bahrain with $65.3 million and finally Kuwait with $31.7 million.

“These figures really show that there is no shortage of ambition or cash flow,” said Ray Tinston, Sales Director, The Hotel Show. “At a time when the US and countries in Europe are preparing stringent austerity measures, to reduce their budget deficits and repay billions in loans, the Middle East region is powering ahead.”

Earlier this year Proleads reported that active hotel projects under construction but due for completion by 2013 throughout the GCC stood at $7 billion. In their latest report that figure has grown to $7.8 billion, an increase of $800 million, mainly due to new project announcements in Qatar and Saudi Arabia.

Overall, most are in the United Arab Emirates (US$4.34 billion) followed by Saudi Arabia (US$1.74 billion), Qatar (US$923 million), Bahrain (US$463 million), Oman (US$300 million) and Kuwait (US$90 million).

“The fact that there has been an 11.4% increase in the value of projects, once again highlights that the development of the regional hospitality sector continues unabated, it is quite clearly sustainable,” said Tinston.

Naturally there are still concerns about hotel oversupply and the effect that will have on occupancy levels and average room rates. Indeed last month, a Deloitte analysis of STR Global hotel data revealed that revenue per available room (RevPar) rates in the Middle East was estimated at $131.42 during the period year-to-date February 2010, compared to $151.51 during the corresponding period in 2009.

“However compared to the rest of the world those figures stack up well. Europe recorded an estimated rate of $72.05 with $79.65 in Asia Pacific, during the same period. An important factor going forward will be what happens in the global and regional economies to encourage people to travel and impact hotel occupancies,” said Tinston.

Now in its eleventh year, The Hotel Show is the Middle East’s most important event on the hospitality calendar hosting the latest products, services and technologies for the hotel, catering and leisure industries. In 2009, the show attracted 8,474 key industry decision makers from 77 countries.

The Hotel Show is divided into four zones: Interiors & Design; Operating Equipment & Supplies; Security & Technology; and The Resort Experience, covering all things outdoor including furniture, accessories and design and includes Hotel Spa, an important sector with more than 60% of all spa activity in the Middle East taking place in hotels. Alongside the show, are high level seminar programmes – The Seven Star Conference, now in its fifth year, and the Middle East Spa Summit.