Riyadh hotels report higher occupancy, revenues in November

Riyadh hotels report higher occupancy, revenues in November
Above, the Ritz Carlton hotel in Riyadh. Hotels in the Saudi Arabian capital recorded an 82.8 percent occupancy level in November. (AFP)
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Updated 23 December 2019

Riyadh hotels report higher occupancy, revenues in November

Riyadh hotels report higher occupancy, revenues in November

DUBAI: Saudi Arabia’s ambitious Vision 2030 plan, which aims to wean its economy from oil dependence, is gradually reaping dividends for the Kingdom’s tourism industry – one of the economic program’s pillars – latest hospitality data show.

“Saudi Arabia has seen a positive shift in hotel performance due to Saudi Vision 2030, a plan focused on diversifying the economy from being highly oil-reliant and focusing on public sectors, such as tourism growth,” global hospitality analyst STR said in its research note.

STR’s comment was hinged in particular on the 82.8 percent occupancy level in Riyadh hotels last month, the highest for a November since 2007, boosted by a 55.0 percent increase in demand. It earlier reported that Riyadh hotels recorded a 76.2 percent occupancy rate in October, thanks to the influx of visitors who attended the three-day Future Investment Initiative.

The average daily rate (ADR), or the average revenue earned from the number of rooms sold, rose 11.1 percent to 685.91 riyals ($182.68) while Revenue Per Available Room (RevPAR), derived by multiplying a hotel’s ADR by its occupancy rate, rose by almost 50 percent to 568.19 riyals.

Saudi Arabia has set a goal of 100 million visitor arrivals yearly by 2030, with the tourism sector accounting for 10 percent of the country’s gross domestic product from its 3 percent share. The Saudi Commission for Tourism and National Heritage recently opened the Kingdom for the first time to visitors from 49 countries particularly those from Europe, US, Canada, Australia and New Zealand.

Hospitality metrics for the wider Middle East region, meanwhile, were mixed, with occupancy rates going up 3.4 percent to 72.1 percent against ADR falling 5.9 percent to $146.47 and RevPAR shedding 2.6 percent to $105.56.

Indicators for the hotel industry in Africa meanwhile hardly moved as occupancy nudged 0.4 percent higher to 68.1 percent while ADR hardly grew to $110.95 and RevPAR almost steady at $75.60.

Real estate advisor JLL earlier reported that aggregate supply of hotel keys in Riyadh was unchanged at 14,800 during the third quarter sans new property completions during the period, although 550 keys were expected to enter the market before the year ended.

“Upcoming hotels include branded hotels such as Hilton Riyadh King Saud University; Nobu Hotel in the heart of downtown Riyadh and the first property for the brand in the Middle East; Le Meridien Riyadh on King Abdullah Road, and the new Movenpick Riyadh opposite King Abdullah Financial District,” JLL said in its report.


German startup to help Saudi hotels utilize empty spaces

German start-up NeuSpace, established during the coronavirus disease (COVID-19) pandemic to help hotels overcome a slump in occupancy rates, is now working in Saudi Arabia. (Shutterstock/File Photo)
German start-up NeuSpace, established during the coronavirus disease (COVID-19) pandemic to help hotels overcome a slump in occupancy rates, is now working in Saudi Arabia. (Shutterstock/File Photo)
Updated 21 January 2021

German startup to help Saudi hotels utilize empty spaces

German start-up NeuSpace, established during the coronavirus disease (COVID-19) pandemic to help hotels overcome a slump in occupancy rates, is now working in Saudi Arabia. (Shutterstock/File Photo)
  • COVID-19 pandemic has brought slump in average hotel occupancy rates in Saudi Arabia

RIYADH: A German start-up established during the coronavirus disease (COVID-19) pandemic to help hotels overcome a slump in occupancy rates is now working in Saudi Arabia.

NeuSpace aims to assist operators in coming up with new ways to generate revenue from their empty spaces.

Anne Schaeflein, a co-founder of the Dusseldorf-based company, told Arab News: “For hotel properties still in the completion phase, we feel it is best to evaluate the perspective, and to diversify pre-opening.

“To be empathic to the existing (or planned) infrastructure and environment of the location, we run a feasibility study and look at how the space could be best used from an ROI (return on investment) as well as community perspective. Turning function spaces into day nurseries, delis, and bakeries,” she said.

Anne Schaeflein, Collaborative Founder NeuSpace. (Supplied)

According to the company’s website, it aims to address the needs of hotel investors, operators, and the wider community surrounding the property.

“We deliver quick solutions to retain some of the hospitality jobs, and add others, and offer attractive living space for communities, all within one to four months, depending on the individual projects,” the company said.

A report in November by global hotel data analysis company, STR, found that the average occupancy rate in Saudi Arabia was 34.7 percent, down 38.7 percent on the previous year. As a result, the average revenue per available room fell 35.5 percent year-on-year to SR172.70 ($46.05).

Looking to the future, real estate consultancy firm, Colliers International, has forecast that average occupancy rates in Riyadh and Alkhobar will be 55 percent, 51 percent in Jeddah and Madinah, and 37 percent in Makkah.

On innovative solutions, Schaeflein said the startup’s concept was formed around the key pillars of value preservation, creating new housing space, and innovative housing concepts.

She pointed out that the company looked at how areas such as roof gardens or social spaces could be used by the wider community, or how pools and spas not being used by guests could be utilized by local residents.

NeuSpace also studies how back-office services and facilities could be offered to residents to better utilize staffing levels. This could include offering dog-minding services, turning rooms into office or retail areas, or renting out restaurant and entertainment spaces when footfall was low.