Saudi Arabia’s hotel inventory grew by 3,800 keys (9%) since Q2 2017, a MENA quarterly review of Q2 2018 by Colliers International said.
In the first half of the year, Warwick Hotels entered the Kingdom’s hotel market with five properties including three in Riyadh, one in Jeddah and al Khobar each. The properties were a mix of newly-built and rebranded properties. Shaza Hotels has opened a new hotel, the 251-key Shaza Makkah. The brand is expanding with two new hotels: Shaza Riyadh scheduled in 2018 and Shaza Jeddah in 2019.
Among its key markets, Dammam/Khobar registered the highest growth in Q2 with a 15% increase in hotel supply. While Jeddah was the only market to experience an improvement in average daily rates (ADR) in the second quarter as well as an 8% year-on-year increase in occupancy.
In terms of occupancy rates, Riyadh saw a 1% increase compared to Q2 2017, while Makkah and Madinah saw a 5% and 6% drop respectively.
For ADR, Riyadh reported a 5% drop, Dammam saw an 8% decline and Makkah and Madinah’s numbers plunged by 12% and 3% respectively.
For the rest of 2018, Colliers notes that key markets in the Kingdom have positive growth in either occupancy or ADR. Riyadh is expected to retain its occupancy and improve on its ADR.
The growth in the market is expected to be driven by the domestic tourism, mostly supported by the investment in the entertainment industry as witnessed in the launch of the Qiddiya project in April earlier this year. The project is slated to open in 2022 with the first Six Flags theme park in the region.
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