Market Report, "Lodging in Saudi Arabia", published

From: Fast Market Research, Inc.
Published: Fri Oct 30 2015

Hotels performed reasonably well in 2014 growing by 7% in current value terms. Although domestic tourism suffered due to Ramadan coinciding with the summer holidays, as well as increased outbound tourism, inbound tourism continued to drive demand for hotel rooms. The occupancy rate therefore remained strong at 72%. Pilgrims continued to flock the holy cities of Makkah and Madinah, despite the issuance of less Umra Visas in 2014, as well as heavy construction activities around the holy mosques. One of the key reasons for the high demand for hotel rooms was the fact that the Government of Saudi Arabia launched Umra Plus visa in early 2014. It is an extended visa through which pilgrims can visit any city of the country freely after performing their religious duties. This has been seen as an effort to boost local tourism as previously pilgrims were not allowed to visit cities other than the holy cities of Makkah, Madinah and Jeddah. As a result, occupancy rates improved not only in the holy cities but also in the cities of Jeddah, Taif, Khobar and Riyadh.

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Industry Prospects

Hotels is expected to perform strongly over the forecast period with a constant 2014 value CAGR of 4%, compared to 1% in the review period. The country is currently undersupplied with hotel rooms. The demand for more hotel rooms is expected to continue growing given the large-scale expansion projects currently being carried out at the holy mosques, especially in Makkah, which will result in increased capacity for pilgrims. On the other hand, domestic tourism is also expected to pick up pace as Ramadan moves away from the summer season, enabling locals to pursue their travelling during the peak holiday season, thus driving growth. Owing to this increasing demand, many hotels have already put in place ambitious expansion plans. Accor Hotels LLC has plans to open 26 hotels by 2018, whereas Intercontinental Saudi Arabia Hotels, which already leads with 24 hotels in the country, has announced plans to open a further nine outlets over the forecast period, which should maintain the company’s leading position in the long run. Of the announced hotels is the 1,238 room Holiday Inn in Makkah, to open in 2016, which will be the world’s largest Holiday Inn.

Report Overview

Discover the latest market trends and uncover sources of future market growth for the Travel Accommodation industry in Saudi Arabia with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Travel Accommodation industry in Saudi Arabia, our research will save you time and money while empowering you to make informed, profitable decisions.

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