RIYADH: Riyadh’s hotel industry continues to register improved performance, with the occupancy and room tariffs in October hitting their highest levels for any month since March 2022, according to global hospitality data provider STR.
The Saudi capital saw the occupancy level of city hotels reaching 72.3 percent last month, allowing hotel operators to quote higher average daily rates of SR771.24 ($205), revealed STR’s preliminary data for October 2022.
As Riyadh’s hotel rooms stayed strong on occupancy with charging comparatively higher daily tariffs, this helped hoteliers earn better revenue per available room, or RevPAR, at SR557.28, which is the highest since May 2011.
With these improved numbers, the Riyadh hotel market’s ADR and RevPAR levels surpassed the pre-pandemic comparable, while occupancy remained slightly below October 2019, stated STR.
Saudi capital has emerged as one of the major destinations for international events and forums amid the Kingdom’s push to become a regional hub for trade and business.
The city was host to the Future Investment Initiative forum in October that saw top CEOs, policymakers, investors and entrepreneurs from across the world attending the three-day event to discuss the future of international investment and the global economy.
The Saudi hospitality market has been on a steady recovery path post the COVID-19 pandemic that played havoc with the global hotel industry.
The return of a variety of events that were previously suspended due to the pandemic is now sustaining and boosting visitor arrivals in Saudi cities, according to global property consultant Knight Frank, as it helped hotels to register better occupancy and daily rates.
For instance, the recent Riyadh International Book Fair is reported to have attracted over 1 million visitors from across the nation. This resulted in improving occupancy rates in the capital’s hotels, noted Knight Frank. Furthermore, it said that rising activity amongst international corporates relocating or expanding their presence in Riyadh has also boosted business travel.
“Looking forward, with the recent launch of the third edition of Riyadh Season, we expect strong demand for hotel rooms this winter. Additionally, as noted above, with rising business travel, room rates are expected to continue rising across the city,” said Turab Saleem, partner – Head of Hospitality, Tourism and Leisure at Knight Frank.
To cater to the growing demand and as part of the economic transformation plans, he said a myriad of new hotel offerings are being planned to accommodate the government’s forecast increase in visitor numbers.
He added: “We expect the total number of hotel rooms to rise by around 25 percent to 25,800 keys by the end of 2024, with over half of the upcoming supply expected to be internationally branded and operated.”
According to September 2022 data from STR, Middle East & Africa was the only world region to show an increase in overall hotel pipeline activity at the end of the third quarter, with 130,956 rooms under construction, 38,147 rooms in the final planning stages, and 74,510 rooms in the planning stage. This comes as the Middle East and Africa regions have a total of 243,613 rooms under contract.
STR noted that most of the region’s pipeline activity is focused in the Middle East, with Saudi Arabia leading the construction activity in the region with 39,070 rooms, followed by the UAE’s 32,373 rooms.