Revenue per available room of Jeddah hotels in November lowest in a decade

Above, the Jeddah Hilton hotel. STR said Jeddah hotels’ RevPAR was pegged at SR321.06 in November, 25.4 percent lower from a year ago. (Courtesy Jeddah Hilton)
Updated 13 December 2017
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Revenue per available room of Jeddah hotels in November lowest in a decade

DUBAI: The revenue per available room (RevPAR) of Jeddah hotels last month was the lowest for a November since 2007, industry monitor STR said in its preliminary report yesterday.
RevPAR, arguably the most important of all ratios used in the hotel industry, is derived by multiplying a hotel’s average daily room rate (ADR) by its occupancy rate. The performance metric provides a snapshot of a hotel’s business performance by incorporating room rates and occupancy levels.
STR said Jeddah hotels’ RevPAR was pegged at SR321.06 in November, 25.4 percent lower from a year ago and 26.9 percent lower from SR439.60 a month earlier.
“Preliminary November 2017 data for hotels in Jeddah, Saudi Arabia, indicate significant supply growth and steep performance declines,” STR said.
Among other industry indicators, the occupancy rates in Jeddah hotels was 17.4 percent lower to 45.7 percent while average daily rate during the month was down 9.7 percent year-on-year to SR702.62.
Hotel room supply was up 9.8 percent in November, but demand went down 9.3 percent, STR noted.
The property consultancy JLL in its previous report said that a potential 900 keys could be available by the end of this year with some hotel projects scheduled to be completed, including the 445-room Hotel Galleria By Elaf.
“Over the next two years, a number of midscale hotels are also expected to open under the Ibis and Premier Inn brands,” JLL said.
“The diversification of the hotel market will make Jeddah a more attracted place to visit to broader range of visitors.
The Saudi government recently launched a multi-billion project that aims to develop 34,000 square kilometers of the Red Sea coastline and 50 reef-fringed islands into luxury resorts and luxury residences.
Construction is scheduled to begin in 2019, with the first phase of the project set to be completed by 2022.


More Saudi sectors opened to foreign investment

The Cabinet amended the sectors excluded from foreign investment at the meeting chair by King Salman. (SPA)
Updated 24 October 2018
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More Saudi sectors opened to foreign investment

  • The amendment allows foreigners to invest in labor services and jobs, including recruitment offices; audio and video services; road transport services; and brokerage services for real estate

RIYADH: Saudi Arabia will allow foreigners to invest in audiovisual services, land transport and real-estate brokerages, the Cabinet decided on Tuesday.

The Cabinet amended what it described as types of activity that had been previously excluded from foreign investment, after concluding its weekly meeting chaired by King Salman.

The amendment allows foreigners to invest in labor services and jobs, including recruitment offices; audio and video services; road transport services; and brokerage services for real estate.

Meanwhile, about 320 foreign institutions have registered as qualified foreign investors in the Saudi stock market, the exchange’s chairwoman told the Future Investment Initiative in Riyadh.

Sarah Al-Suhaimi, chairwoman of the Saudi Arabian stock exchange (Tadawul), said 200 more are expected to register.

Global index provider MSCI classified the Saudi equity market as an emerging market in June, a move expected to attract billions of dollars of passive funds.

Al-Suhaimi said she expected the number of qualified foreign investors to increase before and after the inclusion in the index, which is expected to happen in phases coinciding with index reviews in May and August 2019.