Stefan Dubbeling, managing director development EMEA at BWH Hotels, says the Middle East’s hospitality sector is entering a new era where flexibility, authenticity and value are becoming as important as luxury. He discusses the opportunities shaping regional hotel development and how the industry is shifting away from traditional models.
Hotel franchising is expanding rapidly across the region, but it has not yet become the dominant hotel development model. Management agreements still account for approximately 84 percent of branded hotels. Franchises represent only 11 percent, despite contributing around 20 percent of new signings.
Owners increasingly prefer franchising because it offers greater operational control, shorter contract terms and lower overall costs for development. Hotel brands continue to favor asset-light expansion strategies, making franchising particularly attractive for sustainable regional growth across multiple market segments. Consequently, franchising performs especially well within economy, midscale, select service, conversion and secondary city hotel developments throughout the Middle East today. Nevertheless, management agreements remain the preferred structure for luxury resorts, iconic landmark properties and large-scale mixed-use hospitality developments. Looking ahead, franchising has the potential to become the leading driver of incremental hotel growth. BWH Hotels continues to advance this strategy successfully.
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Underserved Markets
Affordable branded extended-stay accommodation remains one of the Middle East’s most overlooked opportunities, particularly across Saudi Arabia’s secondary cities and business hubs. Currently, hotel development remains heavily concentrated within the luxury segment.
This therefore leaves domestic travelers, relocating workers and religious visitors underserved across the region. Practical accommodation, such as studios, one-bedroom units, kitchens, laundry facilities, coworking spaces and flexible weekly or monthly rates, presents significant potential.
Properties near industrial zones, hospitals and universities could successfully address growing demand from long-stay business and domestic travelers. Alternative hospitality concepts, including desert camps, present promising opportunities when delivered to upscale standards. To capitalize on this growing segment, BWH Hotels recently introduced WorldHotels Backdrop.
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While developers chase the high-profile luxury projects, the market is quietly building capacity for a different kind of traveler. The current focus on mega-resorts and opulent amenities overlooks the daily reality of business professionals and families who need functional, long-term housing. This creates a gap in the market that neither traditional hotels nor short-term rentals are fully filling. The success of extended-stay models in other regions suggests that the Middle East is ready for this shift, particularly as the workforce grows and business travel patterns evolve.
Adapting to Expectations
Hotel brands should move beyond standardized accommodation by creating flexible, personalized and locally inspired experiences that better reflect evolving guest expectations worldwide. Technology should simplify booking, payment, check-in and guest communication while preserving genuine human interaction throughout the hospitality journey.
Hotels should also introduce adaptable guestrooms, extended-stay options, coworking facilities, wellness offerings and memorable dining experiences to increase guest satisfaction and loyalty. Incorporating local culture, authentic design and meaningful community partnerships enables brands to differentiate within increasingly competitive hospitality markets. Transparent pricing, practical inclusions and loyalty programs further strengthen long-term guest relationships and trust. Sustainability commitments must be supported by measurable action because seamless convenience, combined with authentic hospitality, defines tomorrow’s successful hotel brands.