For much of the past decade, international hotel investors looking at the Middle East and North Africa have overwhelmingly gravitated toward the Gulf, driven by mega-projects, sovereign wealth, aviation connectivity and aggressive tourism strategies.
But that equation may now be changing as geopolitical tensions continue to reshape investment decisions across the Middle East and occupancy in key markets such as Dubai, with Moody’s forecasting hotel occupation rates at just 10% in the emirate for the second quarter of 2026. That is pushing attention toward North African hotel markets, particularly Egypt and Morocco.
According to data published in April by Lagos-based advisory firm W Hospitality Group, Africa’s hotel development pipeline has reached a record 123,846 rooms across 675 hotels, up 19% year-on-year. Egypt and Morocco alone account for more than 45% of all rooms under development on the continent, with a 27% year-on-year increase.
Morocco especially has become one of the clearest beneficiaries of the broader shift toward experiential and diversified leisure travel as the African continent’s top tourist draw for a second consecutive year in 2025, recording almost 20 million visitors and generating about $14.8 billion in revenue.
The country is also benefiting from preparations linked to the 2030 FIFA World Cup, which Morocco will co-host alongside Spain and Portugal, accelerating infrastructure and hospitality investment, with the country counting on a $4 billion investment drive to increase hotel capacity by a fifth before the tournament.
The bid to add 25,000 hotel rooms represents “one of the most significant expansions ever undertaken in the kingdom, both in terms of its scale and its pace,” according to Imad Barrakad, head of the Moroccan tourism development agency SMIT, with three quarters of the 700 planned projects to be funded by Moroccan investors. International brands are expected to manage at least 15% of the new capacity, he added.
He described the country as shifting its tourism development focus from “a volume-based approach to one of quality and impact” and said that Morocco is “focused on attracting the right investors, for the right projects, with a long-term vision.”
Morocco investment nationwide
W Hospitality Group says that Morocco now has 75 hotels and more than 10,600 rooms in its active development pipeline, making it the second-largest hotel development market in Africa behind Egypt. Casablanca remains the dominant urban development hub, accounting for roughly one-third of Morocco’s pipeline, with the focus on luxury offers.
The Barceló Hotel Group has continued to expand and now has 10 properties in six cities (Agadir, Casablanca, Fez, Marrakesh, Rabat and Tangier) following the opening of Royal Hideaway Casablanca in December, marking the arrival of the five-star, 310-room Royal Hideaway Hotels & Resorts brand in the African continent.
Meanwhile, the newly opened 55-storey Mohammed VI Tower houses 55 rooms and suites, for the debut of the luxury Waldorf Astoria Rabat Salé. The hotel chain has also signed plans to open a mid-range DoubleTree property and another Curio Collection hotel in Marrakech by 2029. The DoubleTree by Hilton Nador Marina will also be opening in the coastal town in 2028.
“Morocco represents one of the world's most rapidly evolving destinations,” Guy Hutchinson, President, Middle East & Africa for Hilton said of the group’s ambitions.
French hotel giant Accor has also set its sights on Morocco with the new Sofitel Tangier slated to open in 2029 and has established a partnership with local hotel group Risma to launch a tourism academy meant to help produce local talent for the hospitality and travel industries.
Owned by global hospitality group Jin Jiang International, the Radisson chain is also planning openings with new Radisson Blu Hotel & Apartments and Radisson RED properties in Casablanca currently under construction for 2028.
“Morocco is clearly establishing itself as one of the most dynamic tourism markets in North Africa,” according to Réda Faceh, Accor’s vice president development for Northern, Western and Central Africa.
Egypt leads development pipeline
Meantime Egypt dominates Africa’s hotel pipeline with 185 projects and nearly 46,000 rooms under development, representing more than one-third of the continent’s total planned supply. That growth is being driven by strong government tourism targets, large-scale infrastructure investment and aggressive resort expansion.
Cairo remains Africa’s single largest urban hotel pipeline market and its hospitality sector saw the delivery of around 280 keys in New Cairo during the first quarter of 2026, according to JLL, which brought the total hotel stock to approximately 29,000 keys. About 2,560 keys are scheduled for completion during the remaining nine months of the year, maintaining momentum.
Cairo's occupancy rates increased by 1.4% year-on-year to 66.1% through March 2026 and RevPAR posted rose 1.9% to $102.4 over the same period.
Strategic partnerships have emerged as a key trend in Cairo's hospitality sector, driven by Egypt's Vision 2031 and the need to scale tourism infrastructure with global expertise. Notable examples include Accor's collaboration with Contact Developments to launch the Pullman New Capital Hotel & Residences, and IHG's partnership with Jadeer Group to develop Hotel Indigo within a mixed-use project in the New Administrative Capital.
But much of the investor attention is concentrated on Egypt’s resort destinations. The Red Sea coast — particularly Sharm El Sheikh, Hurghada and Ain Sokhna — has become one of the region’s most active resort development zones and earlier this year plans for a $1 billion marina, hotel and mixed-use tourism development called the Monte Galala Towers and Marina were unveiled.
Construction is expected to start in the second half of this year and run for seven years, creating a 10-tower development in a project that will cover 470,000 sq m on the Gulf of Suez, about 35 km south of Ain Sokhna.
JLL’s latest Global Hotel Investment Outlook notes that investors are increasingly targeting “quality assets in prime locations” while pursuing value-add opportunities below replacement cost. However, Egypt continues to face macroeconomic pressures, currency volatility and financing challenges, with further questions over whether its enormous development pipeline can be fully absorbed without short-term pressure on occupancy and average daily rates.
Liquidity is another issue. Much of the investment activity still comes from domestic groups, regional investors and owner-operators rather than large-scale institutional capital. But as investors increasingly move beyond gateway cities in search of growth and yield, emerging leisure destinations are moving higher up international acquisition lists.