Saudi Arabia aims to deliver 310,000 completed hotel rooms in the kingdom by 2030 as part of plans to develop its hospitality market for domestic and international tourism.
Delivery of supply is forecast to cost approximately $110 billion, according to analysis by global property consultancy Knight Frank.
“Delivering the vast number of rooms the kingdom has planned is going to bring with it a number of opportunities,” Turab Saleem, partner and head of hospitality, tourism and leisure at Knight Frank, said.
“However, given this is the biggest hotel supply pipeline ever seen in the region, it will usher in a golden age of hospitality for Saudi Arabia.”
Saudi Arabia is developing its hospitality and tourism industries as part of its Vision 2030 agenda to overhaul the economy and reduce dependence on oil.
The total number of branded hotel keys in the kingdom reached approximately 61,400 in the first quarter of 2022, an increase of more than 4 per cent compared to the same period last year, Colliers said in its quarterly review of Mena hotels. About 2,500 keys have entered the Saudi market since the first quarter of 2021.
Supply in the Saudi market is expected to increase at a compound annual growth rate of 11 per cent from 2022 to 2024, accounting for an additional 23,300 keys in the market, Colliers said.
Saudi Arabia, which aims to host 70 million tourist visits this year after drawing 62 million in 2021, according to a tourism official, will experience growth in a number of related industries to cater to the influx of visitors, Knight Frank said.
“Clearly there will need to be a significant change in the kingdom’s physical infrastructure, but in parallel, new national carriers will be needed to be rapidly established, but most importantly, regulations will need to be developed to manage all aspects of an international and vibrant tourism scene, ranging from hospitality labour to facilitating hospitality investments through streamlined processes,” Mr Saleem said.
Saudi Arabia is setting up an airline that will be based in the capital, Riyadh, while state-owned Saudia will be based in Jeddah, under a transportation strategy announced last year.
“We stand at the precipice of a sea-change for Saudi Arabia’s hospitality landscape — we are moving from vision to reality,” Faisal Durrani, partner and head of Middle East research at Knight Frank, said.
“The $110bn Herculean task of transforming Saudi Arabia’s hospitality landscape goes well beyond the delivery of extra hotel room keys. Care and attention must be taken to deliver the correct quantum of product in the right locations.”
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Hegra After Dark. Photo: RCU Commission -
Hegra After Dark launched in November as a new way to experience AlUla. Photo: RCU Commission -
Saudi Arabian airline flynas launched direct flights from Dubai to AlUla in 2021. Photo: Wikimedia Commons -
The new Habitas Al Ula. Photo: Habitas Al Ula -
Habitas adds 96 much-needed rooms to AlUla's inventory. Photo: Habitas Al Ula -
Luxury eco resort Habitas sits in an ancient oasis in the desert canyons of the Ashar Valley. Photo: Habitas Al Ula -
Habitas Al Ula. Photo: Habitas Al Ula -
A rendering of The St Regis Riyadh, which is due to open in 2022. Photo: Marriott International -
Jason Atherton opened a restaurant in the Maraya Hall. Photo: Maraya Social -
Maraya Social by Jason Atherton. Photo: Maraya Social -
Jeddah Central Project will involve the development of 5.7 million square metres of land overlooking the Red Sea. Photos: Jeddah Central Project -
A sports stadium will act as one of Jeddah Central Project's anchors. Photo: Jeddah Central Project -
The development's beach and promenade. Photo: Jeddah Central Project -
Saudi actress Fay Fouad walks the red carpet for the closing ceremony of the first Red Sea Film Festival. AFP -
Red Sea Film Festival chairman Mohamed Turki poses with British model Naomi Campbell at the event's closing ceremony. AFP -
Zahrah Al Ghamdi, 'Birth of a Place', 2021. This was one of dozens of works by 63 artists on show in Riyadh as part of the Diriyah Contemporary Art Biennale. Photo: Diriyah Foundation -
The first Diriyah Contemporary Art Biennale is on until March 2022. Photo: Diriyah Foundation
Knight Frank’s research also showed a change in the country’s leading hotel room operators by 2030.
By 2030, the Accor Group will be Saudi Arabia’s largest hotel room operator, doubling the number of rooms it manages to almost 28,000, according to the consultancy's estimates.
Hilton hotels will leapfrog from fifth place currently to emerge as the country’s second biggest brand, with almost 19,000 rooms under management by 2030.
“The competition is starting to heat up as hotel operators jostle for a piece of the remarkable hospitality and tourism vision now unfolding in the kingdom,” Mr Durrani said.
“The real crown jewel for hotel operators will be securing a presence in the giga-projects, with Neom and Roua Al Madinah forecast to add around 80,000 keys each.”
The kingdom's giga-projects account for nearly 73 per cent of the hotel supply pipeline across the country, Knight Frank research showed.
Nationwide, it forecasts a 63.2 per cent surge in the number of four- and five-star hotel rooms by the end of the decade.
Knight Frank estimates some $3.4bn is needed to deliver Jeddah’s planned 11,300 rooms, the highest level nationally. Riyadh comes in second, with 11,200 new hotel keys forecast to cost $3.2bn, swelling the capital’s hotel room supply to about 30,000.
