GCC Hotels accelerates performance despite summer heat, with RevPAR rising 11.7% in August 2025 – STR

MIDDLE EAST – Hotel performance across the six Gulf Cooperation Council (GCC) countries, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, has accelerated despite the ongoing summer heat, according to hospitality analytics firm STR.

In August 2025, revenue per available room (RevPAR) increased 11.7% year over year, driven by both higher occupancy rates and average daily rates (ADR).

This strong performance is part of a continuing upward trend rather than an isolated spike. For the first eight months of the year, the GCC’s RevPAR grew 7.8% year to date.

Occupancy increased by 3.3%, while ADR rose 4.3%, illustrating sustained demand growth paired with improved pricing power across the region.

Two pivotal factors have contributed to these impressive gains, with the supply side warranting first attention.

Historically, the GCC has experienced robust supply growth in the hospitality sector.

However, 2025 has seen a remarkable slowdown in new hotel additions, with supply growth reported at just 0.6% year to date, significantly lower than the long-term average of 4.5%.

This reduction in new supply has curtailed fresh competition, granting existing hotels greater ability to command higher rates and maintain strong occupancy.

Despite the slowdown, pipeline activity remains substantial. Over 67,000 hotel rooms are currently under construction across the GCC, representing a potential 14% increase in supply if all projects come to fruition.

Saudi Arabia dominates this pipeline, accounting for 67% of rooms under development, with more than 45,000 new keys expected, underscoring the Kingdom’s ambitious Vision 2030 tourism and hospitality goals.

Leisure demand forms the second major pillar supporting growth.

Popular leisure destinations such as Ras Al-Khaimah and Salalah have attracted strong drive-to demand, with Abu Dhabi emerging as a global competitor with family-friendly attractions, luxury offerings, and a vibrant events calendar boosting RevPAR above even Dubai during the summer.

Looking ahead, the GCC’s hotel industry anticipates tempered growth as the cooler months approach.

However, upcoming major events, including the Formula 1 season finale in Abu Dhabi, the WFC Rally in Jeddah, and the MDLBEAST Soundstorm festival in Riyadh, are expected to drive sustained visitor interest and hotel demand in the region.

The balance of measured supply growth and vibrant leisure demand continues to position the GCC as a compelling and resilient hospitality market in 2025.

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