Dubai: Global hotel transaction volumes are set to increase by 30 to 40 per cent in 2011 following a recovery period in 2010.

According to Jones Lang Lasalle's Hotel Investment Outlook 2011, volumes are expected to reach $28 billion to $30 billion.

"With more stock hitting the market in 2011, there will again be an increased depth and breadth of opportunities for investors. Until liquidity improves in the debt markets, however, the most acquisitive hotel investors will likely be those that make all-equity purchases or structure acquisitions with low leverage level," said Arthur de Haast, global CEO of Jones Lang LaSalle Hotels.

In focus: Arabian Travel Market

Within the Middle East, the industry is polarising and certain countries such as Qatar, the UAE, Saudi Arabia and Morocco are expected to do well.

"Long term hospitality development in Qatar, for example, has been bolstered by the 2022 FIFA World Cup. The UAE hospitality investment market seems to show positive signs as demonstrated by the $115 million of financing from Standard Chartered Bank secured for the Fairmont Palm Jumeirah by IFA Hotel Investments in late 2010 as well as by the recent sale of the Ritz Carlton DIFC by Union Properties for $300 million," says Jalil Mekouar, Managing Director of Jones Lang LaSalle Hotels Middle East and Africa.

Along with a boost in hotel investment, the UAE hospitality sector got off to a positive start in 2011 with occupancy rates increasing to 82 per cent in the last two months on the back of increased tourist footfall.

The upward trend is expected to continue throughout 2011, providing the UAE is able to maintain its current image as an area of stability in a conflicted region.

Hotel apartment guests increased 17 per cent while hotel guests (which account for 75 per cent of the total market) grew by seven per cent.

"Project delays and cancellations will continue to contribute to smoother absorption of new supply," says Jones Lang Lasalles' latest Dubai report.

According to STR Global, Abu Dhabi is looking to introduce 14,000 new hotel rooms while Dubai will introduce 20,000 new rooms.

New hotels in the pipeline include Movenpick hotel, Deira, Ritz Carlton, DIFC and Jumeirah Zabeel Saray.