Located adjacent to the Masjid al Haram, Makkah Clock Royal Tower, A Fairmont Hotel stands 76-storeys tall and features a 40-metre Royal Clock, visibl
international Brands
Joining Marriott in targeted expansion in Saudi Arabia over the next three years are major international players in the hotel industry, such as IHG, Hilton, Mövenpick, and Starwood, as well as Middle Eastern companies Rotana and HMH — all of whom are looking to capitalise on the predicated increase of visitors to the Kingdom.
Jean-Paul Herzog, president, Hilton Worldwide, MEA explains that part of the draw of Saudi Arabia is the diverse set of visitors, ranging from business tourists to religious tourists, with varying requirements and budgets.
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The cross-section of visitors to the Kingdom has also opened up Saudi Arabia beyond simply religious travel over the past decade, throwing up other markets of interest to investors and operators.
“In recent years, Saudi Arabia has been proactive in highlighting its numerous attractions including its rich cultural heritage, historic sites, antiquities and resorts spread across the country,” says Herzog.
“Some regions that have attracted considerable interest over the past year include: Jeddah, which is multi-faceted in its offerings —Jeddah has Balad, the old town, with its ancient buildings and traditional souks, as well as the Corniche; Madain Saleh, one of the best known archaeological sites in Saudi Arabia; Abha, located in Asir in the south; and Janadriyah Festival, a national heritage site located 45 kilometres outside Riyadh.”
Of course the most well known market in Saudi Arabia is religious tourism, and many of the recently opened hotels — such as the highly anticipated Fairmont Raffles Hotels International (FRHI) properties; Makkah Clock Royal Tower — A Fairmont Hotel and Raffles Makkah Palace, as well as Mövenpick Hajjar Tower Makkah — have concentrated on this.
The opening of these hotels, as well as the upcoming FRHI property — Swissôtel Makkah, which is set to open in 2011 — has increased the number of rooms in Makkah by 1000, and with other brands following suit in the holy city, there is no doubt that this remains the key market in the Kingdom.
Mohammed Arkobi, vice president and managing director of Makkah FRHI, says: “In Makkah I think there is room for everybody because, after seven years, Makkah can accommodate 10 million people at the same time, so there is a potential for everyone —it is growing and booming very, very fast and I think that the good market for the hotel industry will be Saudi Arabia in the next five to six years.”
This opinion is shared by Raffles Makkah Palace general manager Nasir Saudi, who adds: “Now we have more supply coming up in the area but the demand is always high; and no matter what supply you put in Makkah, the demand will always be high.”
Recession-Proof
However, it is not just the attraction of the holy cities which has piqued the interest of hoteliers in the country — the relatively low impact of the recession on KSA, compared with other countries in the region and globally, has made it an attractive prospect for potential investors.
“For several years the development in Saudi Arabia was not very active, there was not a very high level of development, of hospitality. However, recently, with the boom of the oil we have witnessed and the economy in Saudi Arabia making it the largest and wealthiest country, the growth — whether in demographic or in government — is phenomenal, so based on that the country needs hotels that are of international standard and you don’t find that easily in this region,” explains Golden Tulip senior vice president and managing director MENA, Amine Moukarzel.
“A couple of hotel companies see a great niche in that market place and the Saudi Arabian market place is still in need [of high-quality hotels] and this is definitely due to the healthy economy, to the large country, different cities and large network,” he adds.
As well as existing brands, several new players are planning properties in the Kingdom, with Shaza hotels — a joint venture between Kempinksi and Shaza — choosing Madinah as the location for its first hotel, set to open imminently, and the first Saudi Arabian hotel brand currently being developed by Abdul Latif Jameel Real Estate Investment Company (ALJREIC).
“The tourism industry in Saudi Arabia presents growth potential and is growing at a rapid pace with investments flowing into the country,” says Mohannad Mohanna, chief executive officer, ALJREIC.
“Several big projects are springing up throughout the Kingdom. The tourism industry is receiving huge investments owing to the surging demand, and the huge amount of revenue is generated by the tourism projects rapidly cropping up. Many businessmen and investors are focusing on this sector and are lining up to launch their projects worth billions of Riyal. Abdul Latif Jameel Real Estate is proud to invest in the hotel development and management industry in the Kingdom and is aiming to create the first Saudi-origin hotel brand, create new job opportunities for Saudi nationals and contribute positively to the well being of the community,” Mohanna adds.
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