A new report published by Jones Lang LaSalle (JLL) for The Hotel Show Saudi Arabia 2015 reveals today that the major cities of Saudi Arabia, Riyadh and Jeddah, are forecast to see an increase of 16,000 new hotel rooms by 2018.
Of these, over 50% will be part of new 5-star hotel developments, as international hotel brands put in place ambitious expansion plans. The number of rooms in Jeddah is expected to increase by 2,700 in 2015 alone.
AccorGroup has plans to open nearly 10 hotels by 2018, while current market leader, InterContinental Hotels Group, which has 24 hotels throughout the Kingdom, has announced the opening of a further 9 outlets including the world’s largest Holiday Inn in Makkah.
Pascal Gauvin, Chief Operating Office, India, Middle East & Africa at InterContinental Hotels Group (IHG) said: “Saudi Arabia has been one of our strongest markets and a key focus for us within the region since we entered 40 years ago. Our largest presence in the Middle East is in Saudi Arabia where we have 24 hotels open across our InterContinental, Crowne Plaza and Holiday Inn brands, and a further nine in the pipeline due to open in the next three to five years.”
He continued: “The positive reports we are seeing on projected growth in visitor arrivals contribute to our optimism for the market – industry has forecast a 400 percent growth in domestic tourism to around 640 million nights by 2019, for example. The number of pilgrims expected to visit the kingdom is set to more than double, and reach five million religious visitors this year, which presents a great opportunity for us to continue to expand our footprint in the country. We are in a great position to cater for this growth with the opening of Holiday Inn Makkah in 2016, which will be the largest Holiday Inn hotel in the world with 1,238 rooms.”
According to another new report published by Euromonitor International for The Hotel Show Saudi Arabia 2015, the Saudi travel market is currently booming owing to the launch of the “Umra plus” visa which the Government of Saudi Arabia introduced in 2014, that enables pilgrims to visit any city of the country freely after performing their religious duties.
Inbound tourism has historically been largely dependent on religious tourists travelling to Makkah and Madinah. However, in recent years an ambitious plan to bring in more foreign investment has led to various industrial areas including the King Abdullah Economic City (KAEC), alongside large-scale expansion projects currently being carried out at the Holy Mosques, especially in Makkah.
Ismail AlAkamal, Director at AlKamal International Saudi Arabia, will be speaking on Makkah and Madinah as a unique market for hospitality projects at the first ever Vision Conference at The Hotel Show Saudi Arabia 2015. He said: “One can hardly recognise Makkah’s city center anymore with the sheer amount of demolition and construction work going on. From the Haram expansion, the First Ring Road, King AbdulAziz Boulevard, Haramain High Speed Rail and Makka Metro project to the private sector developments such as the Jabal Omar Development Project, Jabal Al Kabaa Project and many other independent developments around the central Haram area. It is no surprise that most of the private sector development is focused on hospitality with more than 22,000 keys forecasted to enter operation by the end of 2016. Of course, this opens numerous opportunities for all verticals catering for this unique market and at the same time presents a few challenges.”
Grant Salter, Head of Travel, Hospitality and Leisure Advisory at Deloitte, will also be speaking on hotel performance by sector and opportunities for investment at The Vision Conference, Saudi Arabia 2015.