A CRUCIAL AND EXEMPLIFYING ROLE IN THIS DEVELOPMENT.
The plunge in oil prices has reinforced the Kingdom’s future aspirations outlined in the recently-announced Saudi Vision 2030, which aims to lay the foundation for a robust economy in which oil revenues are being replaced by the returns from major investments and a powerful private sector.
To rid the economy of oil and boost income from other sources, the government hinted at the privatisation of promising segments, including airports, and is now placing an increased focus on the enhancement of the country’s tourism product.
By 2020, some 25.8 million international trips are expected to take place to Saudi Arabia, up from an estimated 18 million in 2015, marking a massive 43 percent surge in just five years, as per Deloitte’s forecast.
“The Kingdom already sees strong tourism figures and hotel occupancy rates have historically been relatively high,” elaborated Grant Salter, head of travel, hospitality and leisure advisory, Middle East, Deloitte.
In fact, according to HotStats’ report, despite the fast-expanding supply, Jeddah’s hotel sector closed 2015 with an average occupancy rate of 77.2 percent, notably higher than that of Abu Dhabi or Doha, and also recorded the second-best results after Dubai among the region’s leading hotspots in terms of both average room rate and RevPAR.
Capitalising on the strong interest, hotel chains are intensively eyeing further opportunities in the market with both the Holy Cities as well as the industrial areas frequented by businessmen being high on their agenda.
“There are more than 49,000 new hotel rooms under construction or in the final planning across the country to meet the demands of this significant increase in tourists,” informed Salter, noting that these figures were prepared prior to the government’s Saudi Vision 2030 announcement in which tourism is given an even more robust role to bolster the Kingdom’s diversification drive.
“We believe that with this vision, and improvements to the hospitality and leisure offering throughout the Kingdom, there is a good chance that the projected increases will be met, if not exceeded,” predicted Salter.
