Saudi Arabia’s hospitality sector set to lead after seeing significant rebound

Special Saudi Arabia’s hospitality sector set to lead after seeing significant rebound
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Updated 23 May 2022

Saudi Arabia’s hospitality sector set to lead after seeing significant rebound

Saudi Arabia’s hospitality sector set to lead after seeing significant rebound
  • Kingdom’s hotels ‘enjoying higher occupancies of over 70% in most destinations’

RIYADH: Of all the industries impacted by the pandemic, the hospitality sector was the worst hit in Saudi Arabia and the Gulf, as in all other territories.

In 2020, hotel occupancy rates declined to 49 percent in Riyadh from 60 percent in 2019. Likewise, Makkah witnessed a decline from 61 percent to 25 percent, and Jeddah from 58 percent to 37 percent, according to professional services firm Deloitte.

However, the Kingdom’s travel and tourism sector enjoyed an equally dramatic rebound. Riyadh, Dammam and Jeddah witnessed revenue per available room recovery index rates of 88 percent, 85 percent and 56 percent, respectively, in 2021, as recently reported by the US-based hospitality research company STR. 

Furthermore, the pace of growth is set to gather steam as the Kingdom’s Vision 2030 reform program aims to attract 100 million annual visitors within eight years. 

The reforms will also focus on T&T outside the traditional destinations of Hajj and Umrah and in line with national gigaprojects such as NEOM and The Red Sea Development Company.

“There is a palpable excitement about Saudi Arabia – not just locally, but globally,” said Philip Wooller, area director, Middle East & Africa at STR.

“Despite the challenges of the last two years, the acceleration of Saudi Arabia as both a leisure and business destination has been remarkable, and the ambitious plans laid out in Vision 2030 are on track.” 

These remarks were echoed by Haitham Mattar, managing director of India, Middle East & Africa at UK-headquartered IHG Hotels & Resorts, the world’s third-largest hotel company, which has been active in the Kingdom since 1975. He expected the resurgence of Saudi Arabia’s T&T sector in the broader international context.

Too big to fail

“The global pandemic was a crisis that brought the industry to its knees for the first time,” Mattar told Arab News. “However, I always say the hospitality sector is too big to fail. We’ve gone through the 2008 financial crisis, foot and mouth disease, SARS and other global problems, and the industry always seems to bounce right back.

“Saudi Arabia’s hotel performance registered year-on-year gains in 2021, and the sector’s recovery is expected to persist throughout the coming year, with pent-up demand driving further improvements as COVID-19-related restrictions continue to ease.

“Our hotels are now enjoying higher occupancies of over 70 percent in most destinations from domestic and international customers.” 




Haitham Mattar, managing director of India, Middle East & Africa at UK-headquartered IHG Hotels & Resorts.

Mattar is an authority on Saudi Arabia’s hospitality sector. He was a senior advisor to the Kingdom’s Ministry of Tourism from 2019 to 2021, where he helped develop a national tourism strategy based on research into global markets, demographics, events, infrastructure, supply chains and identification of key tourism destinations.

Mattar credited the government of Saudi Arabia for helping the hospitality industry through the worst of times and bringing it back to its feet.

“The government supported the entire private sector, including the hotel industry, with subsidization of wages, reduced energy costs and flexible or deferred loan repayments, all of which helped our owners in their recovery plan.

“And today, the government of Saudi and the tourism ministry has been extremely active in bringing great events to the country, which generate demand both domestically and internationally. In addition, we’ve seen increased demand as the borders have started to open with the easing of restrictions.”

Evolving dynamics

According to STR, over 30,000 hotel rooms are currently under construction in the Kingdom.

“STR’s findings clearly point to ongoing and sustained recovery. We are looking forward to exploring the vast untapped potential of the Kingdom’s burgeoning tourism sector,” said Danielle Curtis, exhibition director of Arabian Travel Market.

“Travelers today are seeking new destinations and new experiences, with sustainable tourism being high on their agenda,” Mattar said.

“And sustainability goes a long way. It’s not just about being environmentally friendly; it’s more about preserving wildlife, contributing to zero poverty, creating jobs, and protecting culture and heritage. That’s what travelers today want to associate themselves with.”

Mattar noted that the push for sustainable tourism is changing the very nature of hotel design in Saudi Arabia and worldwide.

“It’s critical to ensure that our hotels are designed with zero emissions, renewable energy and zero usage of single-use plastic.

“Also, consumers want to move away from large lobbies, conglomerates and queues at the reception. New designs will allow people access to their accommodation with minimal touchpoints with other people, for example, online check-ins and services.”

Technology impact

These technical advances are coordinated with the Kingdom’s wider harnessing of artificial intelligence and internet-connected smart devices as Vision 2030 drives it towards a more knowledge-based economy.

NEOM, The Line and TRSDC, all slated to be global tourist hubs, are implementing digital technology from the ground up, emphasizing sustainability.

“A hundred years from now, we will experience exactly the same natural treasures in the Red Sea,” said Najwah Hamzeh, senior smart destinations director at The Red Sea Development Co.

These initiatives will give the Kingdom an edge in the highly competitive global hospitality industry in the future. Still, according to Mattar, other attributes make it uniquely attractive to international travelers.

“Saudi Arabia has beautiful and diverse landscapes, from snow-topped mountains to green mountains to beautiful, lush valleys, great cultural experiences, a rich gastronomy, and preserved authenticity, with 7,000 years of history,” he said.

“There’s a great opportunity for the Kingdom to be a global player in the global tourism arena. The government is working with us, the operators, to ensure that they deliver to their plans.”


TASI begins July in green following a dismal June: Opening bell

TASI begins July in green following a dismal June: Opening bell
Updated 17 sec ago

TASI begins July in green following a dismal June: Opening bell

TASI begins July in green following a dismal June: Opening bell

RIYADH: Saudi stocks started their first trading session of July in green, following a dismal performance in June when the market lost 11 percent.

As of Sunday’s opening bell, TASI gained 0.60 percent to reach 11,591, while the parallel market, Nomu, added 0.17 percent to 21,622, as of 10:05 a.m. Saudi time.

This was led by a 3.03 percent gain in one of the Kingdom’s biggest lenders Saudi National Bank and a 0.26 percent gain in oil giant Aramco. 

Etihad Atheeb Telecommunication Co. gained 3.37 percent to lead the gainers, while Bupa Arabia for Cooperative Insurance Co. slipped 2.51 percent to lead the fallers.

In the financial sector, the Kingdom’s largest valued bank Al Rajhi edged up 0.85 percent, while Alinma Bank climbed 0.90 percent.

Al Moammar Information Systems Co. added 2.22 percent, after being awarded SR34 million ($9 million) by Saudi Co. for Comprehensive Technical and Security Control as well as SR21.9 million by King Abdulaziz City for Science and Technology.

Abdullah Al Othaim Markets Co. edged down 0.19 percent, after reporting that it canceled the initial public offering plans for its malls unit.

Oil prices closed Friday with US West Texas Intermediate crude at $108.43 per barrel and Brent crude at $111.63 per barrel.


Saudi IT firm Al Moammar secures $15m in contracts with two firms

Saudi IT firm Al Moammar secures $15m in contracts with two firms
Updated 29 min 11 sec ago

Saudi IT firm Al Moammar secures $15m in contracts with two firms

Saudi IT firm Al Moammar secures $15m in contracts with two firms

RIYADH: Saudi IT solution provider Al Moammar Information Systems Co. won an SR34.4 million ($9 million) project with the Saudi Co. for Comprehensive Technical and Security Control.

The deal, valid for 36 months, is to implement a project to raise the operational efficiency of the security firm.

The IT firm, known as MIS, was also awarded a three-year contract with King Abdulaziz City for Science and Technology worth SR21.9 million, according to a bourse filing.

In a separate announcement, MIS said its board approved the distribution of SR36 million in dividends at SR1.2 per share for the first half of 2022.


Here’s what you need to know before Tadawul trading on Sunday

Here’s what you need to know before Tadawul trading on Sunday
Updated 34 min 3 sec ago

Here’s what you need to know before Tadawul trading on Sunday

Here’s what you need to know before Tadawul trading on Sunday

RIYADH: Saudi Arabia’s stock market posted its second-largest monthly decline of the year in June, led by fears of interest rate hikes weighing on investor optimism.

TASI, as the main index is known, ended June losing 11 percent to reach 11,523 at the closing bell of Thursday’s session, while Nomu exited the month at 21,585.

Elsewhere in the Gulf, stock exchanges of Dubai, Qatar, Abu Dhabi, and Oman shed between 0.1 and 0.7 percent, while those of Bahrain and Kuwait were up 0.8 and 0.2 percent, respectively.

In energy trading, Brent crude settled at $111.63 a barrel on Friday, while US West Texas Intermediate reached $108.43 a barrel.

Stock news

The Saudi National Bank will distribute dividends of SR4.9 billion ($1.3 billion) in total to its shareholders for the first half of 2022

Saudi Industrial Development Co.’s unit Sleep High signed a deal worth SR12.7 million annually with Emmdad Logistics Services

Al Moammar Information Systems Co. won a SR34.4 million project with the Saudi Co. for Comprehensive Technical and Security Control in addition to a SR21.9 million deal with King Abdulaziz City for Science and Technology

Al Moammar Information Systems Co.’s board of directors approved the distribution of SR1.2 per share in dividends for the first half of 2022

Arabian Pipes Co. was awarded a SR60 million deal to supply oil and gas steel pipes to oil giant Aramco

International Human Resources Co. intends to proceed with a 20-percent stake initial public offering on Saudi Arabia’s parallel Nomu market

Arabian Centres Co. declared a cash dividend of SR0.75 per share for the second half of its fiscal year ended March 31, 2022

Banque Saudi Fransi signed a SR44 million contract with Allianz Saudi Fransi Cooperative Insurance Co. for credit life insurance coverage

Shareholders of ACWA Power Co. approved the recommendation to distribute a SR0.77 dividend per share for 2021

Thimar Development Holding Co.’s losses widened by 79 percent to SR11.7 million in 2021

Shareholders of Bupa Arabia for Cooperative Insurance Co. approved a dividend payout of SR4.5 per share for the fiscal year 2021

L’azurde Co. for Jewelry got its shareholders’ approval to distribute cash dividends of SR0.25 per share for 2021

Al-Alamiya for Cooperative Insurance Co. sealed a five-year bancassurance distribution agreement with Riyad Bank

Unitholders of Albilad Saudi Sovereign Sukuk ETF are set to receive SR80,808 in total as cash dividends for the month of June

Saudi Real Estate Co.’s subsidiary Tamear got its shareholders’ approval to reduce capital from SR100 million to SR34 million

Calendar

July 4, 2022

Launch of single-stock futures trading on Tadawul

July 7, 2022

Saudi Exchange will close for Eid Al Adha holidays and resume trading on July 13


Saudi iHR selects Yaqeen Capital to advise on IPO for 20% stake

Saudi iHR selects Yaqeen Capital to advise on IPO for 20% stake
Updated 45 min 42 sec ago

Saudi iHR selects Yaqeen Capital to advise on IPO for 20% stake

Saudi iHR selects Yaqeen Capital to advise on IPO for 20% stake

RIYADH: Saudi recruitment service provider International Human Resources has selected Yaqeen Capital to advise on its potential initial public offering on the Kingdom’s stock market.

The company is looking to offer 500,000 shares, representing 20 percent of its capital, on the parallel market Nomu, according to a filing.

The IPO will be confined to qualified investors, who will be allowed to subscribe starting July 31 until Aug. 2.

Established in 2005, iHR offers human resources solutions and employment-related consultancy to businesses.

Saudi iHR selects Yaqeen Capital to advise on IPO for 20% stake

RIYADH: Saudi recruitment service provider International Human Resources has selected Yaqeen Capital to advise on its potential initial public offering on the Kingdom’s stock market.

The company is looking to offer 500,000 shares, representing 20 percent of its capital, on the parallel market Nomu, according to a filing.

The IPO will be confined to qualified investors, who will be allowed to subscribe starting July 31 until Aug. 2.

Established in 2005, iHR offers human resources solutions and employment-related consultancy to businesses.


Saudi Aramco awards $16m steel pipes order to Arabian Pipes

Saudi Aramco awards $16m steel pipes order to Arabian Pipes
Updated 03 July 2022

Saudi Aramco awards $16m steel pipes order to Arabian Pipes

Saudi Aramco awards $16m steel pipes order to Arabian Pipes

RIYADH: Saudi oil giant Aramco has given out an order worth SR60 million ($16 million) to homegrown Arabian Pipes Co. to supply steel pipes.

The contract will be valid for one year, the Riyadh-based pipe manufacturer said in a statement to the Saudi stock exchange, Tadawul.

Arabian Pipes expects the transaction to impact its financial statements starting from the second quarter of 2023.

This comes as an extension to two contracts awarded by Aramco to Arabian Pipes so far this year, worth SR368 million in total.