Oil price fall to drive growth in Saudi trade

Oil price fall to drive growth in Saudi trade
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Oil price fall to drive growth in Saudi trade
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Updated 19 January 2016

Oil price fall to drive growth in Saudi trade

Oil price fall to drive growth in Saudi trade

JEDDAH: With the development of economic cities (ECs) occupying a pivotal position in the Saudi economy, the role assumed by the private sector in sharing major part of the work has become all the more important.

In fact, the objective of ECs is to grow the national economy and the private sector is developing each city, which will serve as an anchor and a growth engine for the city, around which other businesses will be located, says Bader bin Hamoud Al-Bader, CEO of Dur Hospitality Co.
“And these businesses and industrial sectors will be the demand generators for the hospitality sector developments to be located in these cities,” Al-Bader told Arab News in an interview, adding that Dur currently has a project with Knowledge Economic City in a joint venture project to develop 200 key hospitality development projects.

The text of the interview:

Q: What future do you see for the hospitality sector and how much worth is this sector in the Kingdom?
A: The hospitality sector in Saudi Arabia is significantly booming with 108 upcoming four- to five- star hotel projects featuring 23,000 rooms, placing the Kingdom among the world’s top 10 countries for hotel projects under development. This industry is expected to continue its growth, in light of the efforts exerted by the Saudi Commission for Tourism and National Heritage (SCTNH) to make tourism a unique industry in the Kingdom by developing tourism, as well as archaeological and heritage sites for attracting internal and external travelers to the Kingdom. This is in addition to the government’s heavy investment in improving transport infrastructure in major cities to attract more business tourists and increase the flow of domestic tourists. Thus, hospitality is a vital and productive sector that contributes to the diversity of the national economy, as per the strategy adopted by the Saudi government. Accordingly came Dur Hospitality’s renewed vision and updated investment inclinations that focus on developing the hospitality industry with both its hotel and residential sectors, especially economy hotels. There is considerable potential for the economy hotel segment, especially in emerging cities such as Tabuk, Jubail and Yanbu where we have already started developing three- to four-star hotels to tend to the need of the middle income sector that is significantly growing.

Q: Is the Saudi hospitality sector attracting foreign investment?
A: While we don’t have enough data on foreign investment in the hospitality sector, we can say generally that the Kingdom attracts the third largest foreign direct investment (FDI) flows in Asia after Turkey and the UAE. We can also confirm from our experience at Dur with international hotel operators and other hospitality brands that foreign investors are looking to enter the Saudi market. This is especially so considering the positive outlook of the economy and the huge infrastructure projects under development across the Kingdom. They have been looking for the perfect local partner with extensive hotel operation and development experience. Accordingly, we have completed this year the signing of the Master Development Agreement with the Intercontinental Hotels Group (IHG), in addition to our long strategic partnership with Marriott International.

Q: Will the falling oil prices impact hospitality sector projects in Saudi Arabia?
A: While it is prudent to note that the falling price of oil may result in marginal decreases in domestic hotel demand in the Kingdom, we anticipate that any negative effect will be offset by many positive factors, including the expected tourism growth due to increasing international demand. Expectations are high as international air carriers are willing to lower their airfares considering the drop in oil prices. Also, internal tourism is expected to develop greatly with the completion of the huge infrastructure and transportation projects in the Kingdom, which will facilitate the transportation between major cities and touristic resorts. And of course the increasing number of religious visitors is expected to reach 30 million in the coming five years, which will surely have a positive impact on tourism in the Kingdom.

Q: Does the hospitality sector create jobs for Saudis?
A: The tourism sector in all its subsectors generates numerous jobs for jobseekers in Saudi Arabia. The GCTA estimates that the number of direct jobs in key tourism sectors in the Kingdom rose by 5.9 percent to 794.9 K in 2014, compared to the preceding year’s direct jobs of 750.9 K. Accommodation alone is responsible for almost 14 percent of this number. GCTA also estimates that the tourism sector is expected to create around 1.4 million direct and indirect jobs in 2017, 1.8 million in 2020 and 2 million in 2025. However Saudi nationals constitute only 27.4 percent of the tourism industry professionals, according to the GCTA 2014 report. And despite the huge efforts by the industry leaders to attract more Saudis to this vital sector, we still encounter challenges and obstacles that we hope to overcome in the future. As for our strategy in 2016, we are hoping to reach 35 percent Saudization across our company properties.

Q: What projects Dur Hospitality has in the holy cities of Makkah and Madinah and what percentage of the hospitality investment is in these cities?
A: We operate Makarem, our own spiritual brand, specialized in serving the visitor of the two holy cities of Makkah and Madinah. Makarem Ajyad Makkah is already established, while the Madinah city project is in the pipeline. Our hospitality investment in the holy cities is about 25 percent of total properties.

Q: With Dur Hospitality investing in creating Makarem brand, could you tell us whether this is a successful brand?
A: Makarem, Dur Hospitality’s hotel brand, delivers specialized hospitality services dedicated to the holy cities of Makkah and Madinah. Makarem has proved throughout the years that no one can compete with their local expertise and this is our benchmark.

Q: Dur Hospitality believes in solid and prosperous partnerships. How do your partnerships work?
A: Partnerships lie at the heart of our business; we aspire for key partnerships in everything we do and we commit to adopting the highest standards of service and quality. This has ensured the success of these partnerships. We have some partnerships in potential projects in the pipeline such as our new development in Madinah city in addition to other projects throughout the Kingdom in which they are all solid and successful.

Q.What is the total investment of Dur Hospitality in various projects across the Kingdom?
A: SR1.8 billion.

Q. In what way does Dur Hospitality support the future of the hospitality industry?
A: We are constantly seeking to participate in developing the hospitality industry and improving its services by providing excellent quality hospitality services that are elevated to the status of our families and guests in the Kingdom. Thus, we will be investing SR1.5 billion in developing 14 new hotels, in major cities and upcoming cities such as Jubail and Tabuk to achieve a planned portfolio of 20 hotels and six residential properties by 2023.

Q. Will the creation of economic cities boost the Kingdom’s hospitality sector?
A: The objective of economic cities (ECs) is to grow the national economy and raise the standard of living for Saudis by enhancing the competitiveness of the economy, creating new jobs, improving Saudis’ skill levels, developing regions and diversifying the economy. The private sector is developing each city around at least one globally competitive cluster or industry, which will serve as an anchor and a growth engine for the city, around which other businesses will be located. These businesses and industrial sectors will be the demand generators for the hospitality sector developments to be located in these cities. Dur currently has a project with Knowledge Economic City in a joint venture project to develop 200 key hospitality development projects in Madinah city for a total investment of SR150 million.


Revenue management systems key to success of Saudi health reforms says KPMG

Revenue management systems key to success of Saudi health reforms says KPMG
Updated 2 min 57 sec ago

Revenue management systems key to success of Saudi health reforms says KPMG

Revenue management systems key to success of Saudi health reforms says KPMG
  • The Kingdom’s Ministry of Health (MoH) is transitioning from being an all-in-one payer, provider and regulator of health services to becoming a regulator

RIYADH: Robust revenue cycle management systems will be essential for Saudi Arabia’s new health care model, KPMG said in a report.
The Kingdom’s Ministry of Health (MoH) is transitioning from being an all-in-one payer, provider and regulator of health services to becoming a regulator, governing corporate payers and providers.
A key aspect of this transformation is the separation of the payer and the provider functions in the public health care sector, KPMG said. To facilitate future reimbursement to public health care providers, the Ministry of Health has set up the Program for Health Assurance and Purchasing (PHAP).
In addition, the Council of Cooperative Health Insurance (CCHI) has also firmed up regulations for private insurers.
With the introduction of mandatory health insurance underway in the public sector in the Kingdom and the wish to standardize across the public and private sector, Saudi health care providers will need to develop new capabilities to be able to generate revenue under the new reimbursement system, KPMG reported.  
“One of the key implications for health care providers of this introduction is the transformation of how health care service providers are reimbursed. Providers will primarily be paid on a per-patient basis, rather than via allocated budgets from the government,” said Emmeline Roodenburg, head of health care at KPMG in Saudi Arabia.
Patient acceptance and registration; billing and claims management; patient treatment and documentation; and coding and grouping are the four key operational elements of the Revenue Cycle Management (RCM) under the new mechanism.
While the risks that come with having a poor RCM function can be managed and mitigated, if they are left unchecked then the consequences could include revenue losses and fines for inaccurate invoicing, KPMG said.


Fashion retailers launch dedicated Gulf online stores

Fashion retailers launch dedicated Gulf online stores
Updated 5 min 54 sec ago

Fashion retailers launch dedicated Gulf online stores

Fashion retailers launch dedicated Gulf online stores
  • The website will feature new collections of the fashion line, as well as exclusive deals for online shoppers

DUBAI: Global fashion brands are launching dedicated online platforms as the pandemic upends shopping habits in the region.

Brands are launching dedicated channels as online shopping booms across the region.

Germany-based Hugo Boss has become the latest brand to open a regional online store serving Saudi Arabia, the UAE, Kuwait, Bahrain and Oman.

Customers can now shop through those dedicated online platforms, which will feature exclusive deals and collections.

E-commerce leaders said the pandemic has accelerated the industry's digital push.

Last year, luxury brands Bulgari, Louis Vuitton, and Dior launched their online selling platforms in the region, at the height of COVID-19-induced lockdowns and curfews.

Diesel has also announced an e-commerce platform targeting the UAE and Saudi markets.

Fashion labels  have been reinventing ways to engage with customers who are used to visiting stores to try on garments.

Some companies have also started to use 3D technology and augmented reality to create a holistic shopping experience for their customers.

 


Riyadh allows development on endowed lands as it eyes population doubling

Riyadh allows development on endowed lands as it eyes population doubling
Updated 19 April 2021

Riyadh allows development on endowed lands as it eyes population doubling

Riyadh allows development on endowed lands as it eyes population doubling
  • The decision allows planning, development, sale, purchase and other services

RIYADH: The Royal Commission for the City of Riyadh (RCRC) has lifted the suspension of development on large parts of the endowed lands north of King Salman Road, Saudi Press Agency reported.
The decision allows planning, development, sale, purchase and other services, provided that everything is compatible with the urban code of the city.
It is part of a series of measures aimed at helping the Saudi capital accommodate twice the current population by 2030, RCRC said
The commission said that Riyadh’s strategy is expected to put the city among the top ten cities in the world in terms of economy, competitiveness and quality of life by 2030.
A specialized committee has been formed to look into land affairs and the RCRC has also created a call center to improve communication with the public.

 


Saudi public debt issuance up 50% in 2020 to $43.4bn

Saudi public debt issuance up 50% in 2020 to $43.4bn
Updated 19 April 2021

Saudi public debt issuance up 50% in 2020 to $43.4bn

Saudi public debt issuance up 50% in 2020 to $43.4bn
  • The market value of stocks and debt instruments reached SR9.8 trillion by the end of 2020

RIYADH:  Saudi public debt issuance increased by nearly 50 percent in 2020 to SR163 billion ($43.4 billion), the Capital Market Authority reported.
Non-government debt issuance increased by more than 250 percent reaching SR31 billion compared to SR9 billion in 2019.  
The market value of stocks and debt instruments reached SR9.8 trillion by the end of 2020, the Authority said in its annual report.
That represented a rise of 335 percent when compared to 2017 when it launched its three-year Financial Leadership Program that ran until last year.
The Authority has been developing its strategic plan for the next three years 2021-2023 in line with updated plans to expand the Kingdom's financial sector.


DP World explores quantum computing technology to optimize business

DP World explores quantum computing technology to optimize business
Updated 19 April 2021

DP World explores quantum computing technology to optimize business

DP World explores quantum computing technology to optimize business
  • The company organized training sessions for its employees, as well as actual quantum computing coding exercises

DUBAI: Dubai’s port company DP World is exploring quantum computing technology to optimize its operations, the company said in a statement.

It said it was working with D-Wave Systems, a Canadian quantum computing company, to look at how the advanced technology can be applied to DP World’s logistics and trade business.

The company organized training sessions for its employees, as well as actual quantum computing coding exercises.

The technology, DP World said, can be applied to industrial logistics, fleet and traffic management, and other operations across the supply chain.

“Quantum computing capabilities complement our need to reach ultimate smart trade and achieve a seamless logistics infrastructure, where everything is connected, devices work in harmony, and all our operations components communicate with each other intelligently,” Mohammed Al-Muallem, DP World’s chief executive, said.

Quantum computers provide exponential processing power to solve complex problems, better than traditional computers.

The move is part of DP World’s digital push.