How does the cost and revenue structure of the hotel industry compare with its counterpart in the West? Introduction The hotel industry enjoyed a sizable growth rate since 1973 to meet the requirements of the massive influx of customers attracted by government investments in building infrastructure. The Gulf governments enticed the private sector to invest in hotel development to meet the shortage of hotel accommodations by providing generous financial support and incentives.

Hotel construction and operating costs in the Arab Gulf States have been very high. While a cost of $ 100,000 to $ 150,000 per room is the international norm, a cost of $ 500,000 per room was not uncommon in the Gulf states. One manager of a luxury Gulf hotel reported that his hotel needs an occupancy rate of 56 % to break even.

Currently, the hotel market in the Gulf states is characterized by exces