Investor interest in Saudi hotel sector is growing, so why are there so few rooms outside cities?

 According to Thamer Alrajeeb, the cornerstone of the development of hotel investment in Saudi Arabia’s various regions lies in facilitating the financing process for investors in the sector. (Supplied)
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According to Thamer Alrajeeb, the cornerstone of the development of hotel investment in Saudi Arabia’s various regions lies in facilitating the financing process for investors in the sector. (Supplied)
Investor interest in Saudi hotel sector is growing, so why are there so few rooms outside cities?
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Saudi people still pushing to see an increase in the number of hotels outside the Kingdom's major cities. (Supplied)
Investor interest in Saudi hotel sector is growing, so why are there so few rooms outside cities?
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Thamer Alrajeeb, a former member of the Riyadh Chamber’s Tourism Accommodation Committee. (Supplied)
Investor interest in Saudi hotel sector is growing, so why are there so few rooms outside cities?
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Mahmoud Al-Saeed, general manager of Pereira Resorts in the Eastern Province. (Supplied)
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Updated 16 January 2022

Investor interest in Saudi hotel sector is growing, so why are there so few rooms outside cities?

 According to Thamer Alrajeeb, the cornerstone of the development of hotel investment in Saudi Arabia’s various regions lies in facilitating the financing process for investors in the sector. (Supplied)
  • Hotel industry experts shed light on planning strategies, expansion portfolios and other challenges in the sector

RIYADH: In recent years, there has been a remarkable increase in the number of businesses whose owners are interested in investing in the hotel sector in Saudi Arabia. Yet at the same time, many observers continue to wonder why there are still so few hotels outside of the Kingdom’s major cities.

Amir Lababedi, Hilton’s managing director of development in the Middle East and North Africa, said: “Saudi Arabia represents our largest development pipeline in the Middle East, with plans to expand our presence to more than 75 hotels in the coming years.
“We plan to expand in locations across major primary and secondary cities across Saudi Arabia. We see potential for our mid-market Hampton by Hilton and Hilton Garden Inn brands, as well as for DoubleTree by Hilton and our lifestyle brand, Canopy by Hilton.”
Meanwhile, Radisson Hotel Group announced this week that it plans to expand its operations in Saudi Arabia and increase its investment portfolio in the Middle East to approximately half of its total investments by 2026.

There is a big demand for hotels classified as three or four stars. The local population, as well as visitors — pilgrims, tourists, and businessmen — prefers three- or four-star hotels as these are available all around and are very affordable for the general public. Commercially, their operating cost is lower and thus they generate more revenue than a five-star hotel.

Saleh Al-Habib, Executive director, Jiwar Real Estate Development

According to Saudi Minister of Tourism Ahmed Al-Khateeb: “Radisson Hotel Group’s commitment to developing new hotels in the Kingdom and opening a regional office in Riyadh is an effective contribution to strengthening the Kingdom’s steps to achieve its goal of receiving 100 million visitors by 2030.”
Mahmoud Al-Saeed, the general manager of Pereira Resorts in the Eastern Province, which is managed by Boudl Hotels and Resorts, said the company aims to cater to all sections of society.
“Given that a large segment of society prefers three-star hotels for their quality and reasonable prices, the company has created a chain of Aber hotels,” he said. “It launched the brand in 2018 to meet the needs of many with a group of modern hotels, in terms of design and concept, at affordable prices while ensuring high quality and professionalism in providing services.”




Dr. Saleh Al-Habib, executive director of Jiwar Real Estate Development

The three-star Aber hotels are “situated between hotel apartments and four-star hotels,” according to Al-Saeed. “The economic concept that Boudl is keen to present with this group of hotels has become an important matter for many travelers and those looking for a change in the usual lifestyle,” he added.
Boudl also owns the four-star Pereira hotels and the five-star Narcissus. Al-Saeed said the company has plans for expansion in major cities, and to increase the number of three-star hotels in a number of Saudi cities. These hotels are experiencing an influx of tourists from inside and outside the country, he added.
Al-Saeed, who has worked in the industry for nearly two decades, said that hotels currently face a number of challenges, particularly “in light of the precautions against COVID-19. These include the postponement of many events which usually take place in hotels and the cancellation of reservations for halls used for celebrations or official meetings, due to the coronavirus and its accompanying problems.”
He added that the authorities in Saudi Arabia are aware of the issues and are working to develop the hotel sector.




 Fadil Munakeal, manager of Jabal Omar Jumeirah in Makkah

Thamer Alrajeeb, a former member of the Riyadh Chamber of Commerce and Industry’s Tourism Accommodation Committee, said investment in the tourism sector in major cities is encouraging, particularly in Riyadh in support of the Saudi Entertainment Authority initiatives. It is not profitable in other cities, however, where operations are seasonal during a period of a few months each year, usually coinciding with school holidays or good weather.
“For the rest of the year, operation is a loss for the investor,” he said.

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Radisson Hotel Group announced this week that it plans to expand its operations in Saudi Arabia and increase its investment portfolio in the Middle East to approximately half of its total investments by 2026.

Alrajeeb described investing in hotels other than five-star establishments as “feasible.” He said the lower operational costs and prices are affordable to a wider range of guests but added that “many of the Ministry of Tourism’s requirements burden investors.”
He said it is possible to meet the needs of visitors with average levels of financial solvency, particularly outside the three cities of Riyadh, Jeddah, and Dammam. This can be done by investing in hotel suites in particular, which are characterized by low startup costs, “allowing for their rental prices to be more commensurate with the solvency of a wide range of travelers.”
The cornerstone of the development of hotel investment in Saudi Arabia’s various regions lies in facilitating the financing process for investors in the sector while fulfilling the Ministry of Tourism’s requirements, Alrajeeb said, adding that the focus should be on efforts that contribute to raising quality in the sector and meeting the needs of customers.
Fadil Munakeal, manager of the Jabal Omar Jumeirah hotel in Makkah, stressed the importance of providing products and services that correspond to a hotel’s star rating, which he said reflects positively on investment in the sector. He urged the Ministry of Tourism to continue its supervision and follow up efforts to achieve reliability in the sector and improve the image and perception of all types of hotels.
Munakeal, who is also a member of the Hotels Committee of the Makkah Chamber of Commerce and Industry, urged the owners of less expensive establishments, particularly in the three-star and lower categories, to invest in modern marketing techniques and direct them at particular target groups. They must also develop products and services that meet the needs of these target audiences, he added.
He said many domestic tourists, particularly families, prefer to stay in hotel apartments because they have a negative perception of some hotels with fewer than four stars.
Saleh Al-Habib, executive director of Jiwar Real Estate Development, said: “There is a big demand for hotels classified as three or four stars. The local population, as well as visitors — pilgrims, tourists, and businessmen — prefers three- or four-star hotels as these are available all around and are very affordable for the general public.
“Commercially, their operating cost is lower and thus they generate more revenue than a five-star hotel.
“This is a popular choice for almost all classes of society, especially the middle and lower-middle classes. The availability of such hotels and semi-luxurious apartments is numerous. With affordable tariffs, they meet the needs of families, business travelers, as well as those seeking leisure.”
Al-Habib, who is also a member of the Saudi Association for Tourist Accommodation Facilities, said that both locals and expatriates are interested in establishing hotels and furnished apartments in areas such as Abha, Al-Baha, Tabuk, Hafar Al-Batin, Al-Majma’ah and Al-Kharj.
“These interested entrepreneurs are working closely with the National Tourism Fund,” he added.


US officials led by antisemitism envoy briefed on Saudi efforts to promote tolerance

US officials led by antisemitism envoy briefed on Saudi efforts to promote tolerance
Updated 01 July 2022

US officials led by antisemitism envoy briefed on Saudi efforts to promote tolerance

US officials led by antisemitism envoy briefed on Saudi efforts to promote tolerance
  • They were visiting the King Abdulaziz Center for National Dialogue, the leader of which stressed the importance of communication and dialogue in building bridges between cultures

RIYADH: A visiting US delegation led by Ambassador Deborah Lipstadt, Washington’s special envoy for monitoring and combating antisemitism, was briefed this week on the work of Saudi Arabia’s King Abdulaziz Center for National Dialogue.

After being welcomed to the center by its secretary-general, Abdullah Al-Fawzan, and other senior representatives, the delegates were given a brief presentation about its activities designed to promote and encourage greater tolerance among peoples.

They were also briefed on the results of the first study of its kind in the region on tolerance, carried out by the center to the highest scientific standards, which found that Saudi society is tolerant of other cultures and civilizations.

In greeting the visitors on Tuesday, Al-Fawzan stressed the importance of encouraging communication and dialogue between peoples, to help build bridges of understanding among cultures, as part of the efforts being made by the Kingdom, through its Saudi Vision 2030 development plan, to support tolerance and promote peaceful coexistence based on the principles of moderate Islam.

He said that Saudi society accepts and coexists with people from other societies and cultures, as evidenced by the large number of expatriates who live and work in the Kingdom. This shows that the values of tolerance, peaceful coexistence and unity are not new concepts in the country, he added.

Since its inception, the center has placed great importance in promoting the values of citizenship among among all sections of society, making it a mainstay of its work, Al-Fawzan said.

The members of the US delegation were also given a tour of the center’s Interactive Dialogue Exhibition so that they could learn more about the Kingdom’s efforts to support communications between cultures and civilizations. They also heard about local projects developed by the center to help strengthen the nation’s social fabric, and its regional and global initiatives designed to help build and enhance cultural diversity and human commonalities.


Shoura council speaker heads delegation to Non-Aligned Movement Parliamentary Network conference

Shoura council speaker heads delegation to Non-Aligned Movement Parliamentary Network conference
Updated 30 June 2022

Shoura council speaker heads delegation to Non-Aligned Movement Parliamentary Network conference

Shoura council speaker heads delegation to Non-Aligned Movement Parliamentary Network conference

RIYADH: Speaker of the Saudi Shoura Council Sheikh Dr. Abdullah Al-Sheikh is heading the Kingdom’s delegation to the first conference of the Non-Aligned Movement Parliamentary Network, which began on Thursday in Baku, Azerbaijan, with the participation of several parliament speakers from NAM member states.

Al-Sheikh said in a press statement that the council’s participation in the conference is an affirmation of Saudi Arabia’s keenness to achieve security, peace and sustainable development globally.

Speaker of the Saudi Shoura Council Sheikh Dr. Abdullah Al Al-Sheikh is heading the Kingdom’s delegation to the first conference of the Parliamentary Network of Non-Aligned Movement (NAM), which began on Thursday in Baku, Azerbaijan. (Supplied)

The Kingdom’s participation also highlights its constructive partnership with other countries, the solutions it aims to provide to international crises and the humanitarian work it carries out, Al-Sheikh pointed out.

He stressed that international parliamentary conferences are essential in facing global challenges and achieving cooperation across borders.

The NAM Parliamentary Network was established on the sidelines of the 143rd General Assembly of the Inter-Parliamentary Union, held in Madrid. It aims to provide a framework for cooperation between the parliaments of NAM member states, with the participation of several other international organizations.


Local businesses looking forward to lucrative Hajj season post-pandemic

Local businesses looking forward to lucrative Hajj season post-pandemic
Updated 30 June 2022

Local businesses looking forward to lucrative Hajj season post-pandemic

Local businesses looking forward to lucrative Hajj season post-pandemic
  • The pandemic put a halt to the Hajj for two years, leading to huge losses for some families who solely depended on the pilgrimage season to reap its financial rewards

MAKKAH: Residents of Makkah benefit financially during the Hajj as millions of people from all over the world converge on the holy city to perform the annual pilgrimage.  

But the pandemic put a halt to the Hajj for two years, leading to huge losses for some families who solely depended on the pilgrimage season to reap its financial rewards.  

Elaf Al-Mashaer, a local five-star hotel, is all set to welcome over 20,000 pilgrims this year, and the team has prepared the place to be as comfortable as possible to ensure a smooth stay for guests.

“We must know the number of guests who will stay in the hotel and their nationalities so that we can provide them with what they need,” hotel owner Abdulaziz Al-Sharbeeni told Arab News.

The 304-room establishment has several restaurants to cater to guests’ palates. “Each nationality has its own culture or a certain way of eating. We have Indian, Pakistani, East Asian, and Arabic restaurants.”

(Supplied)

It has also made modifications and preparations to make the rooms and suites accessible to people with disabilities.

“Some pilgrims come alone, so we give them a room on request, while others come with their families, so we give them a suite,” Al-Sharbeeni said. “There is a target we must achieve during the Hajj season as a facility, and the most important seasons in the year to achieve these financial goals are the Ramadan and Hajj seasons.”

The Hajj season attracts a large and diverse crowd, and everyone who visits Makkah enjoys shopping for gifts. They also use taxis, hospitals, restaurants, and other services and amenities, providing locals with many economic opportunities.

“I sell gold in the local market, and Hajj season is considered our opportunity to reach the target. So I’m more than happy that Hajj is back because we miss the pilgrims and we love interacting with them and welcoming them,” said Ahmed Al-Suliman.

Al-Suliman said there were more opportunities for work during the Hajj as significant manpower was required to serve, manage, and help with the influx of pilgrims.

“The people of Makkah, in particular, want to take advantage of the Hajj season. Young and old are working this season, and even if someone sells a bottle of water for SR1 ($0.27), he will earn a lot of money. You can apply for seasonal field jobs through the website of the Ministry of Hajj and the official platforms.”


Program launched to measure pilgrims’ satisfaction during Hajj

Program launched to measure pilgrims’ satisfaction during Hajj
Updated 30 June 2022

Program launched to measure pilgrims’ satisfaction during Hajj

Program launched to measure pilgrims’ satisfaction during Hajj
  • Guests will be assigned incognito to help evaluate Hajj services according to a pre-studied scientific methodology

JEDDAH: The Saudi Ministry of Hajj and Umrah has launched a performance initiative aimed at measuring pilgrims’ satisfaction at service provision during this year’s Hajj season.

Assistant deputy minister of Hajj and Umrah, Hesham Saeed, signed a joint cooperation agreement with acting secretary-general of the coordination council, Dr. Abdullah Al-Muwaihi, in relation to the program.

Al-Muwaihi said the monitoring scheme would involve measuring quality-of-service performance and beneficiary satisfaction, while also including an incognito guest program, all designed to improve and enrich worshippers’ spiritual experience.

Under the incognito initiative, Saeed said a designated guest would, “serve as a pilgrim under mission, who lives the full experience of Hajj, starting from the country of the pilgrim, passing through the holy sites, and performing the rituals until they return to their country.

“The assigned incognito guest will be living all the details, seeing what contact points they pass through, and will give an evaluation according to a pre-studied scientific methodology regarding the measurement criteria,” he added.

 

 

 


A million Muslims from around the world to perform Hajj in 2022

A million Muslims from around the world to perform Hajj in 2022
Updated 30 June 2022

A million Muslims from around the world to perform Hajj in 2022

A million Muslims from around the world to perform Hajj in 2022
  • Pilgrims from outside the Kingdom must submit a negative PCR test result within 72 hours of their departure

JEDDAH: A million Muslims from around the world will perform the Hajj this year, in line with the quotas allocated to each country and following recommendations from the Saudi Ministry of Health.

The Hajj was limited to 60,000 vaccinated citizens and residents from the Kingdom in 2021 to contain the spread of COVID-19 and ensure the safety of pilgrims and others.

But, following Saudi Arabia's successful implementation of precautionary measures for Hajj and Umrah seasons during the pandemic, pilgrim capacity has been raised to 1 million.

This year's Hajj is for people aged 65 and under who must comply with the requirement to complete a COVID-19 vaccination program.

The Ministry of Hajj and Umrah tweeted that pilgrims from outside the Kingdom must submit a negative PCR test result within 72 hours of their departure for Saudi Arabia.

It said the shots required for pilgrims in Saudi Arabia included one for meningitis for people who had not been vaccinated in the past five years. They are also required to get the flu vaccine. Local pilgrims must take these vaccinations at least 10 days before going to the Hajj.

Figures from the General Authority of Statistics showed that, during the pandemic's peak in 2020, the number of pilgrims plummeted to just 1,000. The decision to restrict capacity was based on risk assessment and public health and safety concerns.  

There were almost 2.5 million pilgrims at the Hajj in 2019, and 1.9 million were from overseas.

The highest number of local and foreign Hajj pilgrims in the past decade was in 2012 when nearly 3.2 million people performed the annual pilgrimage. The lowest was 1.9 million in 2016.