Market Trends of Middle East And Africa Commercial HVAC Industry
The Rise of the Hospitality Sector in the Region is Expected to Increase the Demand For HVAC
- Rapid infrastructure development due to economic diversification and increased demand for commercial facilities like hotels and airports due to booming tourism are two significant growth factors for the HVAC market growth. Regarding HVAC systems, hotels have more needs and considerations than almost any other industry. From guest comfort and reliability to overall efficiency and energy savings, meeting the complex needs of commercial hotel heating and ventilation requires a comprehensive approach.
- The hospitality sector in the Middle East and Africa has continued to grow positively and is expected to expand further. There is still a high demand for Saudi Arabia and the United Arab Emirates. With 100 million visitors in 2023, 7 years ahead of schedule, the Saudi Arabian tourism sector achieved a significant milestone.
- Moreover, the region is becoming a compelling choice for global travelers due to ongoing innovation and business travel in the Middle Eastern hospitality sector and its expanding leisure offering, which supports market growth.
- Furthermore, with growing awareness about climate change and an increasing focus on energy efficiency, hotels are increasingly looking to upgrade their HVAC systems, thus creating a high demand for HVAC services in the region.
- Furthermore, several mega projects in the pipeline are expected to create a favorable scenario for the growth of the country's studied market. For instance, in April 2024, Palladium Hotel Group announced the opening of a major project in the UAE in 2026 under the brand name The Unexpected Hotels & Residences. With a budget of over USD 100 million, this major project will be carried out alongside Marjan, one of the leading developers of freehold properties in Ras Al Khaimah, and Almal Real Estate Development, a luxury property developer based in the region.
- Furthermore, several vendors are also expanding their offerings to meet the increasing demand. In April 2024, Midea announced the launch of its newest product, Midea A7 Duct, the compact HVAC system for commercial settings. The system is designed for easy installation in a variety of settings, boasting a slimmer body, less noise, and UV curing technology on the PCB circuit board for better durability under extreme conditions.
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The United Arab Emirates has a Significant Market Share
- Due to population growth, economic activity, and unsustainable consumption rates, the United Arab Emirates is facing an increasing challenge in energy efficiency. It is anticipated that the region's need for HVAC systems and services will increase significantly as a result of the government's emphasis on green construction projects. For instance, by 2030, the government of Dubai hopes to retrofit 30,000 buildings and cut the city's energy consumption by 30%. This program is one of the UAE's many significant energy conservation initiatives and aims to increase consumer demand.
- According to the Dubai Statistics Center, in 2023, the total electricity consumption in the emirate of Dubai in the United Arab Emirates was about 56.52 terawatt hours. The largest share of electricity consumption in 2023 was in the commercial sector, at about 50%. Such consumption of electricity will increase the demand for energy-efficient HVAC systems, further supporting the market growth.
- Moreover, the rapid installation of HVAC systems in shopping malls and retail spaces is likely to augment the market growth between 2024 and 2029. The shopping center market in the UAE is poised for steady growth in the foreseeable future and is driven by factors like urbanization, high consumer expectations, and the preference for immersive retail experiences. The expanding number of middle-class families and rising disposable incomes are boosting consumer spending and, therefore, increasing the number of shopping centers across the country.
- Rising numbers of data centers in the country are also creating a space for the HVAC industry to expand in the region. For instance, in March 2024, Acronis announced the opening of a new Cyber Cloud data center in Dubai, signaling a deliberate push to tap into the region's accelerated technological advancements and increased digitization.
- Furthermore, various players in the market are focusing on expanding their presence in the country to meet the increasing demand, thus supporting the market's growth. For instance, in February 2024, Hira Group announced the launch of an HVAC showroom in Fujairah, UAE. By expanding its product and service offerings, the company is committed to surpassing consumer expectations, and this strategic move is in line with that goal. Strategically situated in Fujairah, the new showroom allows Hira Group to conveniently showcase its products and solutions close to its manufacturing facilities in Ras Al Khaimah.
- Similarly, in December 2023, TICA announced the introduction of its latest invocations in heating, ventilation, and air conditioning (HVAC) at the Big 5 Global Expo in the Middle East, Africa, and South Asia (MEASA). The latest products from TICA are designed to maximize energy efficiency and performance while lowering lifecycle costs. This will help the construction industry become more low carbon as it looks for environmentally friendly ways to lessen its carbon impact.
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