The hospitality sector in Saudi Arabia is well on its way to recovery post pandemic, according to professional services and investment management company, Colliers.
Events and campaigns such as Riyadh Season, along with growing consumer confidence in travel, have benefitted both Riyadh and Jeddah as key travel hubs in the Kingdom in the second half of 2021, and this is expected to continue having a positive impact on hotel demand in 2022, according to the recently published report.
The forecasted occupancy for 2022 in Riyadh is 65 percent with 54 percent projected for Jeddah, representing a respective12 and 7 percent increase.
In addition to the sector’s strong performance and outlook for 2022 in the kingdom, there have been numerous announcements for new hospitality projects that will drive further growth and development in Saudi Arabia, including:
- Diriyah Gate Development Authority (DGDA) has unveiled its vision for Diriyah Square, the commercial heart of its 190 Billion SAR [US $ 50 Billion] Diriyah giga-project on the edge of Riyadh, kingdom of Saudi Arabia, scheduled to be open by 2024. To date, 16 international hotel brands have been confirmed at the Diriyah Gate Development and it is expected there will be 38 in total.
- The US $15 billion AlUla masterplan will be developed in three phases in 2023, 2030, and 2035. The plan involves a broad range of initiatives across archaeology, tourism, culture, and education, and the arts and reflecting Vision 2030’s goals in economic diversification, local community empowerment, and heritage preservation. By 2035, The site will have 9,400 hotel rooms, and 2 million visitors a year are expected upon completion.
- The AMAALA coastal-based development project will feature 30 hotels and 3,000 hotel rooms. The large-scale mixed-use project is expected to receive around a million visitors a year.
- The US $ 13 billion (SAR 50 billion) mega-development project Asser Tourism Masterplan is set to turn the Aseer region on the Red Sea coast into a tourism hub, set to attract more than 10 million domestic and international visitors by 2030. The project, themed ‘The Arabian Highland’, aims to be a sustainable tourism destination offering midscale experiences. The region, known for its agricultural sector, is gradually turning into a modern tourism and hospitality landmark, emphasizing its high mountain peaks and natural resources.
On the hotel supply side, Saudi Arabia saw a 4 percent increase in the number of branded hotel keys in 2021 with 60,400 keys at the end of the year. In 2022, the total number of branded hotel keys is set to reach 69,300 keys, representing a 15 percent increase compared to the same period last year, outperforming both the UAE with a projected 3 percent increase and Egypt at 8 percent growth. About 8,900 keys are expected to enter the KSA market this year.
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