Last updated: 01:00 PM ET, Mon May 02 2016

Choice Hotels Signs Master Agreement to Enter Middle East

Hotel & Resort | Patrick Clarke | May 02, 2016

Choice Hotels Signs Master Agreement to Enter Middle East

PHOTO: Dubai, United Arab Emirates. (Photo by David Cogswell).

Choice Hotels International is poised for significant growth in the Middle East.

The Rockville, Maryland-based hotel company announced it has inked a master development agreement with Equinox Ventures Ltd to debut and develop a trio of brands in the United Arab Emirates and Saudi Arabia in the coming years.

Under the agreement, the joint venture between Equinox Group Ltd and Al Tayyar Travel Group will introduce the Clarion, Comfort and Quality brands across the two Middle East nations.

The agreement is projected to result in approximately 25 hotels comprising 8,000 rooms in the UAE and Saudi Arabia by 2021.

Why the Middle East?

Choice Hotels isn't the only U.S.-based hotel company eyeing the Middle East, with both Starwood Hotels and Resorts Worldwide and Marriott International also revealing ambitious expansion plans last week. And the reason for that is growing demand, especially among midscale brands.

"Currently, markets such as Dubai, Riyadh, Jeddah and Makkahare are undersupplied in mid-market hotel accommodations, providing an opportunity for a strong hotel brand such as Choice to bring its portfolio to the market," said Equinox Group Ltd. president Shuja Zaidi in a statement. "We believe that the next wave of growth and expansion in our region belongs to the mid-market segment. To prepare for it, it was only natural that we partner up with one of the largest and most globally recognized brands with a portfolio that spans from mid- to upscale properties and can offer travelers what they need."

READ MORE: Is Choice Hotels Considering Entry into Sharing Economy?

Citing Phocuswright, Choice Hotels reveals that the region's travel industry is forecasted to rise to $98 billion by 2017. If reached, the figure would represent a massive jump from $71.8 billion in 2014.  

A fast emerging middle class in the Middle East as well as a spike in inbound business and leisure travel is behind the promising forecast.

Aggressive International Expansion

Choice Hotels' latest master development agreement highlights the company's aggressive approach to expanding its brands internationally.

READ MORE: Marriott Unveils Expansion Plans for Middle East, Africa

After all, the announcement represents the company's fifth portfolio expansion in the Europe, Middle East and Africa market within the past six months.

Choice Hotels signed an agreement to develop its Comfort and Quality brands in Germany, Austria and Hungary, launched its Ascend Hotel Collection in the U.K. and France and has established a growing development pipeline in Turkey.

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