RIYADH: By all accounts, it is a boom time for the hospitality industry in Saudi Arabia.
The latest data from hotel industry monitoring firm STR shows the Kingdom leads the Middle East and Africa’s hotel building activity, with 42,033 hotel rooms under construction as of March, accounting for 35.1 percent of the 119,505 being built in the region.
That places Saudi Arabia only after China and the US in the global hotel construction market.
But that’s not all. Under Vision 2030, the Kingdom’s hotel sector is expected to grow further, and have 310,000 hotel rooms by 2030 with an investment size of $110 billion, data released by Knight Frank indicated.
Not surprisingly, the Kingdom’s hospitality industry is witnessing steady growth in key performance indicators.
Take Riyadh’s hotel occupancy rate, for instance. It hit 75.5 percent in February, the highest figure since 2008, according to data released by STR in March.
Compared to 2019, the occupancy in February jumped 23.4 percent, the average daily rate rose 34 percent to SR801.46 ($213.46), and the revenue per available room increased 65.3 percent to SR605.06.
Additionally, Saudi Arabia’s hotel segment is projected to generate $2.51 billion in revenue this year and is expected to reach $3.02 billion by 2027, according to Statista.
“The hospitality industry is undoubtedly poised for accelerated growth and the region is currently leading the travel and hospitality sector globally,” Guy Hutchinson, president and CEO of hospitality group Rotana, told Arab News.
Rotana has seven hotels in the pipeline in Saudi Arabia, including five new properties in Riyadh that are being negotiated. These properties will almost triple the number of rooms the firm operates in the Kingdom to 6,000 over the next four years.
“Today, we are seeing constant infrastructure works taking place at full speed in order to meet the growing demand with more hotel groups expanding their footprint across the Kingdom,” added Hutchinson.
Giga projects in focus
Committed to positioning Saudi Arabia as a leading global hub, public bodies continue to work closely with the private sector to develop world class hotels and resorts across the Kingdom, including the development of giga projects such as Red Sea Global, AMAALA, NEOM, Diriyah Gate and Qiddiya.
“Saudi Arabia’s giga projects represent developments that are unique in scope and vision,” Ludwig Bouldoukian, regional vice president, development for Middle East and Africa at multinational hospitality company Hyatt, told Arab News.
“With construction underway at RSG and Diriyah, we already see significant progress and are very excited for what’s to come,” he added.
He also explained how the Kingdom plays a “pivotal role” in Hyatt’s growth strategy in the Middle East with anticipated room growth of more than 80 percent in Saudi Arabia by late 2025.
Haitham Mattar, managing director for India, tje Middle East & Africa at IHG Hotels & Resorts, also talked up the welcoming environment for companies looking to expand.
“As Saudi Arabia works towards achieving its Vision 2030 goals, the Kingdom’s ambition to introduce new and novel developments is clear,” he said, adding: “NEOM’s The Line, a linear city with no roads, vehicles or emissions, and running on 100 percent renewable energy, is a prime example of this ambition.
“Such projects underline the fact that there is growing demand for innovative experiences and offerings.”
