Jeddah
With Jeddah going through a similar period of regeneration, efforts have been made to enhance visitor experience for the leisure and religious segments.
The Jeddah Municipality is shortly launching a clean-up and maintenance project for Jeddah Corniche and a project managed by Jeddah Development and Urban Regeneration Company (JDURC) will see the downtown area revitalised with a transit hub, retail zone, family entertainment, restaurants and an exhibition centre forming part of an 850, 000m² community to be completed by 2030.
The hotel industry has been booming in the city, with average occupancy of 72–85% throughout 2013 and average room rate increasing exponentially over the last three years; June rates rose from $211 in 2011, to $226 in 2012 to $263 in 2013.
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Sherif El Mansoury, director of sales & marketing, Rosewood Corniche revealed that in 2013 the hotel achieved 3.7% higher occupancy than in 2012 and average rate increased by 3% with revenue up almost 8.2%.
Confident that this year’s pipeline of five hotels, mostly mid-range and budget – including Novotel Jeddah Tahlia Street and Auris Lodge Suites – “will not affect business”, El Mansoury expects 2014 to see the same levels of occupancy with average rate increasing by 2.9% and a 3% rise in revenues from last year.
Hewett agrees demand will continue to outstrip supply in Jeddah for 2014, adding: “I think the market is still buoyant enough to continue to grow and in the next few years will slow down with more properties coming on to the market”.
Hewett refers to such hotels as the upper upscale Radisson Blu Hotel Jeddah Salamah to open its doors in 2015, and the JW Marriott Jeddah, due to open in 2016.
El Mansoury comments: “When five-star deluxe brands open in 2015 and 2016 it will be very challenging for us to maintain our loyal clients and take new business from the market.”
Despite this, El Mansoury is confident that infrastructure including the opening of a huge conference centre in the middle of next year will create more MICE demand in the city.
Additionally, the $11.1bn Haramain High Speed passenger line will link Makkah and Madinah via Jeddah and King Abdulla Economic City (KAEC). Increased stop over visits made by pilgrims means the city may too benefit from a share of the 40% of KSA inbound tourists who come for religious purposes.
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