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.”


Saudi Alamar fast food chain franchiser sets final offer price at $30.64 

Saudi Alamar fast food chain franchiser sets final offer price at $30.64 
Updated 11 sec ago

Saudi Alamar fast food chain franchiser sets final offer price at $30.64 

Saudi Alamar fast food chain franchiser sets final offer price at $30.64 

RIYADH: Alamar Foods has set the top range of its initial public offering prices at SR115 ($30.64) per share, with a 47.5 percent oversubscription, after completing its pricing and book building process for institutional investors.

The final offer price gives the fast food chain franchiser an implied market capitalization at listing of SR2.933 billion.

Alamar Foods is developer and operator of two global household brands: Domino’s, which operates across the Middle East, North Africa, and Pakistan region, and Dunkin’, which operates in Egypt and Morocco.

“This IPO stands as a testament to the milestones achieved towards becoming a leading QSR player across the MENAP region,” Filippo Sgattoni, CEO at Alamar Foods, said.

The individual investor subscription period is scheduled to start on July 20 and to close on July 21. 

The Capital Market Authority approved on June 7 Alamar’s application to offer 10.63 million shares, or 41.7 percent of the company’s capital, to the public.

Alamar’s capital stands at SR255 million.


Oil prices ease on recession fears, headed for 3rd weekly loss

Oil prices ease on recession fears, headed for 3rd weekly loss
Updated 52 min 44 sec ago

Oil prices ease on recession fears, headed for 3rd weekly loss

Oil prices ease on recession fears, headed for 3rd weekly loss
  • OPEC+ sticks to oil output policy, avoids debate on September
  • Traders prepare for long Fourth of July holiday weekend
  • Some Norway oil workers to strike from July 5

TOKYO: Oil prices eased on Friday as lingering fears of a recession demand weighed on sentiment, putting the benchmarks on track for their third straight weekly losses, according to Reuters.

Brent crude futures were down 20 cents, or 0.2 percent, at $108.83 a barrel by 0428 GMT, giving up earlier gains of over $1.

WTI crude futures for August delivery slid 37 cents, or 0.4 percent, to $105.39 a barrel, also surrendering an early gain of nearly $1.

Both contracts fell around 3 percent on Thursday.

“Earlier in the session, the market took a breather from Thursday’s sell-off as the OPEC+ gave no surprise, saying it would stick to its planned oil output hikes in August,” said Tsuyoshi Ueno, senior economist at NLI Research Institute.

“But uncertainty over OPEC+ policy in and after September and fears that the aggressive rate hikes by the Federal Reserve would lead to a US recession and hamper fuel demand dampened sentiment,” he said.

On Thursday, the OPEC+ group of producers, including Russia, agreed to stick to its output strategy after two days of meetings. However, the producer club avoided discussing policy from September onwards.

Previously, OPEC+ decided to increase output each month by 648,000 barrels per day (bpd) in July and August, up from a previous plan to add 432,000 bpd per month.

US President Joe Biden will make a three-stop trip to the Middle East in mid-July that includes a visit to Saudi Arabia, pushing energy policy into the spotlight as the United States and other countries face soaring fuel prices that are driving up inflation.

Biden said on Thursday he would not directly press Saudi Arabia to increase oil output to curb soaring prices when he sees the Saudi king and crown prince during a visit this month.

“All eyes are on whether or not Saudi Arabia or any other Middle Eastern oil producers would bolster output to respond the US request,” NLI’s Ueno said.

Elsewhere, 74 Norwegian offshore oil workers at Equinor’s Gudrun, Oseberg South and Oseberg East platforms will go on strike from July 5, the Lederne trade union said on Thursday, likely shutting about 4 percent of Norway’s oil production.

Oil prices are expected to stay above $100 a barrel this year as Europe and other regions struggle to wean themselves off Russian supply, a Reuters poll showed on Thursday, though economic risks could slow the climb. (Reporting by Stephanie Kelly and Yuka Obayashi; editing by Richard Pullin and Kim Coghill)


Google to pay $90 million to settle legal fight with app developers

Google to pay $90 million to settle legal fight with app developers
Updated 01 July 2022

Google to pay $90 million to settle legal fight with app developers

Google to pay $90 million to settle legal fight with app developers
  • Some 48,000 app developers are eligible to apply for the $90 million fund, if the court approves the proposed settlement

WASHINGTON: Alphabet Inc’s Google has agreed to pay $90 million to settle a legal fight with app developers over the money they earned creating apps for Android smartphones and for enticing users to make in-app purchases, according to a court filing.
The app developers, in a lawsuit filed in federal court in San Francisco, had accused Google of using agreements with smartphone makers, technical barriers and revenue sharing agreements to effectively close the app ecosystem and shunt most payments through its Google Play billing system with a default service fee of 30 percent.
As part of the proposed settlement, Google said in a blog post it would put $90 million in a fund to support app developers who made $2 million or less in annual revenue from 2016-2021.
“A vast majority of US developers who earned revenue through Google Play will be eligible to receive money from this fund, if they choose,” Google said in the blog post.
Google said it would also continue to charge a 15 percent commission to developers who make $1 million or less annually from the Google Play Store. It started doing this in 2021.
The court must approve the proposed settlement.
There were likely 48,000 app developers eligible to apply for the $90 million fund, and the minimum payout is $250, according to Hagens Berman Sobol Shapiro LLP, who represented the plaintiffs.
Apple Inc. agreed last year to loosen App Store restrictions on small developers, striking a deal in a class action. It also agreed to pay $100 million.
In Washington, Congress is considering legislation that would require Google and Apple to allow sideloading, or the practice of downloading apps without using an app store. It would also bar them from requiring that app providers use Google and Apple’s payment systems. 


 


SpaceX’s Starlink Internet gets US regulator’s nod for use with ships, boats, planes

SpaceX’s Starlink Internet gets US regulator’s nod for use with ships, boats, planes
Updated 01 July 2022

SpaceX’s Starlink Internet gets US regulator’s nod for use with ships, boats, planes

SpaceX’s Starlink Internet gets US regulator’s nod for use with ships, boats, planes
  • SpaceX has steadily launched some 2,700 Starlink satellites to low-Earth orbit since 2019
  • It has amassed hundreds of thousands of subscribers, including many who pay $110 a month for broadband Internet

WASHINGTON: The US Federal Communications Commission on Thursday authorized Elon Musk’s SpaceX to use its Starlink satellite Internet network with moving vehicles, green-lighting the company’s plan to expand broadband offerings to commercial airlines, shipping vessels and trucks.
Starlink, a fast-growing constellation of Internet-beaming satellites in orbit, has long sought to grow its customer base from individual broadband users in rural, Internet-poor locations to enterprise customers in the potentially lucrative automotive, shipping and airline sectors.
“Authorizing a new class of terminals for SpaceX’s satellite system will expand the range of broadband capabilities to meet the growing user demands that now require connectivity while on the move,” the FCC said in its authorization published Thursday, echoing plans outlined in SpaceX’s request for the approval early last year.
SpaceX has steadily launched some 2,700 Starlink satellites to low-Earth orbit since 2019 and has amassed hundreds of thousands of subscribers, including many who pay $110 a month for broadband Internet using $599 self-install terminal kits.
The Hawthorne, California-based space company has focused heavily in recent years on courting airlines around Starlink for in-flight WiFi, having inked its first such deals in recent months with Hawaiian Airlines and semi-private jet service JSX.
“We’re obsessive about the passenger experience,” Jonathan Hofeller, Starlink’s commercial sales chief, said at an aviation conference earlier this month. “We’re going to be on planes here very shortly, so hopefully passengers are wowed by the experience.”
SpaceX, under an earlier experimental FCC license, has been testing aircraft-tailored Starlink terminals on Gulfstream jets and US military aircraft.
Musk, the founder and CEO of SpaceX, has previously said that the types of vehicles Starlink was expected to be used with pursuant to Thursday’s authorization were aircraft, ships, large trucks and RVs. Musk, also the CEO of electric car maker Tesla Inc, had said he didn’t see “connecting Tesla cars to Starlink, as our terminal is much too big.”
Competition in the low-Earth orbiting satellite Internet sector is fierce between SpaceX, satellite operator OneWeb, and Jeff Bezos’s Kuiper project, a unit of e-commerce giant Amazon.com which is planning to launch the first prototype satellites of its own broadband network later this year. 

 


Bitcoin falls below $19,000, further shaking crypto markets

Bitcoin falls below $19,000, further shaking crypto markets
Updated 01 July 2022

Bitcoin falls below $19,000, further shaking crypto markets

Bitcoin falls below $19,000, further shaking crypto markets

Bitcoin dropped 6.1% to $18,866.77 at 2004 GMT on Thursday, putting the biggest and best-known cryptocurrency down $1,226.41 from its previous close and down 60.9% from the year's high of $48,234 on March 28.
Several big players in the cryptocurrency markets have had difficulties, and further declines could force other crypto investors to sell holdings to meet margin calls and cover losses.
Ether, the coin linked to the ethereum blockchain network, dropped 7.5% to $1,016.08 on Thursday, losing $82.38 from its previous close.
Both digital assets have struggled since U.S. based lender Celsius Network this month said it would suspend withdrawals. Bitcoin and ether were further rattled by the apparent insolvency of crypto hedge fund Three Arrows Capital, which a person familiar with the matter told Reuters has entered liquidation.
Many of the industry's recent problems can be traced back to the spectacular collapse of so-called stablecoin TerraUSD in May, which saw the stablecoin lose almost all its value, along with its paired token. (Reporting by Mrinmay Dey in Bengaluru and Hannah Lang in Washington; Editing by David Gregorio)