The Makarim Riyadh Hotel, like the other hotels in the group, caters predominantly to religious tourism. The Makarim Riyadh Hotel, like the other hotels in the group, caters predominantly to religious tourism.

Hotels in Saudi Arabia have performed well in 2012, with a bright outlook for 2013 in spite of additional supply. Experts predict the challenge lies in staffing the hotels rather than filling them

The outlook for Saudi Arabia going into 2013 is a largely positive one based on a strong performance this year, according to consultants and hoteliers alike.

Hotels across the country have performed well in 2012, with a few stars among them, namely the religious cities of Makkah and Medina, as well as Jeddah, which has largely benefitted on the back of religious tourism.

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“Jeddah in particular has performed very well this year. Year-to-date figures have shown occupancy is up around 7% on last year, with average daily rate up nearly 10%.

This has positively impacted the RevPAR and we’re seeing the profits from hotels in Jeddah on the up as well,” TRI Hospitality Consulting’s Chris Hewett tells Hotelier Middle East.

Average occupancy from January to September 2012 in Jeddah stands at 81%, according to TRI Hospitality Consulting Data, with RevPAR for the same period at US $181.82.
While the traditional corporate market has remained as strong as ever in Jeddah, as with the rest of the country, its leisure market is also growing.

“You get a lot of demand from domestic tourism. There were a lot of issues in Egypt and other parts of the GCC at the start of the year and people in Saudi were deciding to remain in the Kingdom.

With Jeddah being the leisure and retail destination in the Kingdom, they would go straight towards Jeddah,” says Hewett, adding that the main motivations for domestic travel are leisure and shopping, with Jeddah beating other parts of the country on both accounts.

Located around half an hour away from Mecca, the city is also benefitting from pilgrims stopping over en route to the holy city, according to MENA Hotels and Resorts director Fadi Mazkour.

“The biggest impact on occupancy is coming from Hajj and Umrah, that sector is unbelievably increasing. The visitors to Makkah and Medina want to stay at least one night on the way there or back usually for shopping purposes. There are the old souks and the modern malls, so people pass by and buy souvenirs before they go home,” he explains.

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