Thursday 20 February 2020

Riyadh hotels see occupancy boom in 2019

RIYADH, 21 days ago

Hotel occupancy in Riyadh, Saudi Arabia. increased significantly in 2019 and is expected to grow further in 2020, supported by growing tourism and fuelled by key events, such as the G20 Summit and major sporting and entertainment events, according to new data released by global real estate consultancy firm CBRE.

The sector was boosted in the last quarter of 2019 due to Riyadh Season, which witnessed over 11.4 million tourists. Furthermore, passengers arriving at King Khalid International Airport exceeded 1.1 million during the first month of Riyadh Season from October 11 – November 11 2019. On December 1, 2019, the kingdom assumed the presidency of the 2020 G20. This event marks the first time that the kingdom will host the G20 summit. More than 100 meetings will be held through November 30, in addition to the Leaders’ Summit which will commence on November 21.

CBRE reported that the kingdom’s hospitality sector, which has witnessed significant change bolstered by the expansion in the entertainment sector, is expected to experience a further boost from the opening of Qiddiya, which is scheduled for 2023.

According to CBRE’s Market Snapshot, supply stood at 17,700 keys in Riyadh in 2019 with 4,500 keys expected to enter the market by 2023. Meanwhile occupancy has risen by 5 per cent year-on-year.

The entertainment and F&B sectors will also continue to drive growth and innovation in Riyadh’s retail sector, CBRE’s report revealed. There is expected to be an increased focus on ‘Shoppertainment’, with around 10 cinemas opening in the capital since 2018 and wider plans to open more than 350 cinemas across the country by 2030. In 2019, Al-Akaria announced the establishment of a joint venture with Triple Five to develop the world’s largest mixed-use entertainment and shopping complex at Al Akaria’s Widyan complex in Riyadh.

Riyadh’s point of sale transactions increased 73 per cent in volume and 29 per cent in value in November 2019 compared to November 2018, demonstrating the growing retail activity in the kingdom. On January 1, 2020, it was announced that retail shops may opt to remain open 24 hours a day and seven days a week, which is expected to have a positive effect on the sector going forward.

Simon Townsend, head of strategic advisory at CBRE MENAT and general manager, CBRE Saudi Arabia, said: “The recent economic and social initiatives and legislation introduced by the Saudi Government have already had an extremely positive impact on the country’s real estate sector. We are already starting to witness impressive growth across major real estate segments including residential, hospitality and retail, and this upwards trajectory is likely to continue in the short to medium term.  Increased government spending on large-scale infrastructure and mega-projects is expected to further stimulate the overall market, with a positive trickling down effect on other complementary sectors."

"Performance remains soft, and oversupply remains a challenge; however, the innovative spirit employed by the Government and private entities alike demonstrates the encouraging direction that the real estate market is moving in and the promising opportunities that are continuing to arise. Furthermore, significant infrastructure projects are nearing completion, such as the Riyadh Metro, which will add to the positive sentiment both from an occupier and investor perspective. Overall, the country is making great leaps in its efforts to become a global business hub and world-class tourism destination, and the market is expected to continue to react positively to the efforts of the public and private sectors alike,” he said. - TradeArabia News Service


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