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$8.9bn INVESTMENT SEEN

Saudi Arabia 'poised for steady tourism growth’

Riyadh, March 3, 2014

Saudi Arabia is set to see a steady growth in its travel and tourism industry with SR33.5 billion ($8.9 billion) likely to be invested in the sector until 2020, according to experts.

The industry has contributed significantly to the kingdom’s GDP and is expected to account for as much as 6.1 per cent of overall GDP by 2017, said data from the World Trade and Tourism Council.

The travel and tourism investments in Saudi Arabia have grown at an average of 5.8 per cent since 2001 and are expected to increase at an annual rate of 6.7 per cent until 2020, it said.

Philip Wooller, area director – MEA, STR Global, pointed out that there are about 66,438 rooms that are in construction in the Middle East and Africa region. Majority of these are classified as upscale (32 per cent) and upper midscale (22 per cent).  

“Among the region’s key markets, Dubai reported the largest number of rooms under construction (10,970 rooms). Five other markets reported more than 2,000 rooms under construction: Makkah (6,927 rooms); Riyadh (5,804 rooms); Doha (4,944 rooms); Abu Dhabi (3,036 rooms); and Jeddah (2,569 rooms),” he added.

Experts also analysed the trends that will have an impact on its ability to attract more tourists at the recently concluded Saudi Arabia Briefing of the Arabian Hotel Investment Conference (AHIC) in Riyadh, hosted by Marriott International.

The Saudi Arabia event followed similar briefings in key tourism markets across the region including Oman and Qatar, said a statement.

Filippo Sona, director, head of Hotels Mena, Colliers International noted that the potential for growth using the serviced apartment business model whose key strength is being able to change the target market profile between long and short stay to suit market conditions in order to achieve revenue maximisation.

“Brand strength is a strong driver of serviced apartment demand with GDS, direct bookings, and hotel website bookings accounting for 40 per cent of total bookings. A strong brand with a regional presence and strong online capabilities is essential to help and drive sales in all three markets,” Sona said.

In Saudi Arabia, there is a definitive gap between locally branded furnished apartment supply and internationally branded serviced apartments stemming from inconsistent service standards, poor construction standards, and a lack of ancillary facilities, he said.

“While some markets have a large amount of forthcoming stock, other markets including Makkah and Madinah have limited stock in the pipeline. 2014 will see the introduction of many new internationally branded serviced apartments concepts such as Fraser Place and Fraser Suites in Riyadh, two Citadines properties in Jeddah and a Residence Inn in Jazan,” he added.

The briefing ended with a panel discussion which dissected development trends from Saudi Arabia’s hotel industry trends from the perspective of owners, operators and lenders.

The 10th AHIC will bring together the Middle East’s most influential hotel investors, developers, operators and advisors on May 4 and 5 at the Madinat Jumeirah in Dubai. - TradeArabia News Service




Tags: Saudi | tourism | investment |

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