Riyadh hotels’ RevPAR hits highest levels in over a decade

Riyadh hotels’ RevPAR hits highest levels in over a decade
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. (Shutterstock)
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Updated 17 November 2022

Riyadh hotels’ RevPAR hits highest levels in over a decade

Riyadh hotels’ RevPAR hits highest levels in over a decade

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.


Microsoft to invest in a new data center region in the Kingdom  

Microsoft to invest in a new data center region in the Kingdom  
Updated 12 sec ago

Microsoft to invest in a new data center region in the Kingdom  

Microsoft to invest in a new data center region in the Kingdom  

RIYADH: Global tech firm Microsoft announced its plans to invest in a new cloud data center region in Saudi Arabia in response to growing customer demand for cloud services and data residency in the Kingdom. 

A region is a set of collaborating zones or data centers grouped together based on their geographical proximity. 

Announced during the LEAP 2023 international technology conference, the company said the new cloud data center region will offer enterprise-grade reliability and performance combined with customer privacy, data residency, and high-speed latency standards in Saudi Arabia. 

“This new data center region will provide organizations, enterprises, and developers in the Kingdom and around the world with access to scalable, highly available, and resilient cloud services while addressing their data residency, security, privacy, and compliance needs,” said Samer Abu-Ltaif, corporate vice president and president, Microsoft Central and Eastern Europe, Middle East and Africa. 

Microsoft said its cloud region in Saudi Arabia will play a significant role in driving economic growth. Citing an IDC study, the company added that its partners, and cloud-using customers will together generate around $24 billion in new revenues above the 2022 level over the next four years.  

“Today’s announcement reflects Microsoft’s longstanding commitment to Saudi Arabia and its ambitions for digital transformation,” said Thamer Alharbi, president, Microsoft Arabia.  

He added that their data center region will enable even more enterprises and industries in Saudi Arabia to benefit from a trusted cloud framework that protects the privacy of organizations’ data to the highest standard.” 

Saudi Vice Minister of Communications and Information Technology Haitham bin Abdul Rahman Al-Ohali said: “This important step is consistent with the steps taken by the Kingdom to accelerate its digital transformation and strengthen its position as an innovation hub.” 

He said the data center will also provide huge opportunities for startups and small and medium enterprises looking to enhance their competitiveness and leverage the advancements of the Fourth Industrial Revolution to develop innovative solutions.   

“This supports the Kingdom’s Vision 2030 goal of strengthening the role of the communications and information technology sector in creating a digital society, digital government, a thriving digital economy, and an innovative future for the Kingdom,” added Al-Ohali.  


Saudi National Bank profits surge 46.7% in 2022 

Saudi National Bank profits surge 46.7% in 2022 
Updated 9 min 46 sec ago

Saudi National Bank profits surge 46.7% in 2022 

Saudi National Bank profits surge 46.7% in 2022 

RIYADH: The Saudi National Bank reported a 46.7 percent surge in annual profits in 2022 on the back of a rise in operating income.  

Annual net profits of SNB reached SR18.6 billion ($5 billion) at the end of last year compared to SR12.7 billion in 2021, according to a bourse statement.  

It indicated that the bank saw a 16.9 percent increase in operating profit in 2022 compared to the year before.  

Operating income yielded profit as a result of an 18.4 percent increase in net special commission income, and a 21.1 percent increase in money from banking service fees.  

Additionally, other operating expenses fell by 12.4 percent, and the total operating expenses – including credit losses – fell by 15.2 percent in 2022.  

This was driven by a 13.5 percent drop in other general and administrative expenses, as well as a 57.4 percent drop in the net provision for expected credit losses. 

In 2022, the SNB’s assets reached SR945 billion showing a 3.4 increase, revealed the bourse statement.  

The bank’s earnings per share amounted to SR4.06 last year compared to SR2.99 the year before.  

SNB’s net provision for expected credit losses plummeted by 57.45 percent – from SR3.96 billion in 2021 to SR1.69 billion in 2022.  


Factories in Saudi Arabia to increase by 50% in five years, says deputy minister at LEAP

Factories in Saudi Arabia to increase by 50% in five years, says deputy minister at LEAP
Updated 28 min 13 sec ago

Factories in Saudi Arabia to increase by 50% in five years, says deputy minister at LEAP

Factories in Saudi Arabia to increase by 50% in five years, says deputy minister at LEAP

RIYADH: Saudi Arabia plans to increase the number of factories by 50 percent in the next five years and pump SR1.4 trillion ($370 billion) into the industrial sector, said the deputy minister of industry and mineral resources.

Speaking at the launch of the Sanaei platform at the second edition of the LEAP technical conference in Riyadh, Osama Al-Zamil said the Kingdom ultimately wants to see the current number of such facilities rise from 10,500 at present to 36,000 by 2035. 

He also said the Sanaei platform aims to facilitate the adoption of best practices fomenting the Fourth Industrial Revolution.

“The level of reliance on skilled personnel will increase the competitiveness and operational efficiency of factories, present investment opportunities in the sector and provide incentives,” said the official added.

He stated that the “Future Factories Package” aims to transform 4,000 factories into operationally and technologically advanced facilities to raise digital maturity, operating efficiency and industrial capabilities, thereby promoting the development of exports, improving the work environment in factories, and providing attractive quality jobs by adopting the technologies of the 4IR.

The program focuses on two tracks. The first ensures new factories are designed and constructed according to high manufacturing and production efficiency standard, while the second transforms existing factories into facilities of operational excellence and advanced technologies.


Saudi crown prince chairs Council of Economic and Development Affairs meeting

Saudi Crown Prince Mohammed bin Salman chairs a meeting of the Council of Economic and Development Affairs in Riyadh. (SPA)
Saudi Crown Prince Mohammed bin Salman chairs a meeting of the Council of Economic and Development Affairs in Riyadh. (SPA)
Updated 2 min 40 sec ago

Saudi crown prince chairs Council of Economic and Development Affairs meeting

Saudi Crown Prince Mohammed bin Salman chairs a meeting of the Council of Economic and Development Affairs in Riyadh. (SPA)
  • During the meeting held at Al-Yamamah Palace, the council reviewed a number of economic and development matters

RIYADH: Saudi Arabia’s Crown Prince Mohammed bin Salman chaired a meeting of the Council of Economic and Development Affairs in Riyadh on Tuesday.

During the meeting held at Al-Yamamah Palace, the council reviewed a number of economic and development matters including a presentation by the Ministry of Economy and Planning regarding local and global economic developments.

The presentation included details of the most important indicators related to the national economy, especially the growth witnessed by sectors of the national economy.

It also looked at the prospects of the global economy during the coming period and an analysis of the most prominent indicators.

The council also discussed a proposal submitted by its strategic management office regarding the governance of Saudi Arabia’s Vision 2030 and the roles of supporting agencies.

It also reviewed a periodic presentation submitted by the Ministry of Health on the latest health developments related to the coronavirus pandemic, and another submitted by the project management office of the council’s secretariat regarding decisions and recommendations during the last quarter of 2022.


‘Clean’ energy technologies are not absolutely clean, says top expert at IAEE conference

‘Clean’ energy technologies are not absolutely clean, says top expert at IAEE conference
Updated 21 min 39 sec ago

‘Clean’ energy technologies are not absolutely clean, says top expert at IAEE conference

‘Clean’ energy technologies are not absolutely clean, says top expert at IAEE conference

RIYADH: Clean energy technologies which include solar and wind power are not completely clean as there could be lifecycle emissions associated with these power generation methods, according to Shihab Elborai, partner at consulting business Strategy& Middle East.

In an exclusive interview with Arab News on the sidelines of the 44th conference of the International Association for Energy Economics, Elborai said that fossil fuels are required to develop solar panels, wind turbines, batteries, transformers and cables for the grid, which may create a spike in carbon emissions if clean energy technologies are being rolled out at an exponential speed all across the globe.

“There are lifecycle emissions associated with clean energy technology. So, clean energy technologies are not really absolutely clean. There are 50 grams of carbon dioxide equivalent per kilowatt produced from solar panels. Around 10 grams of CO2 per kilowatt hour are produced from wind turbines,” said Elborai.

He added: “If these (clean energy) technologies are deployed at an exponential rate without an equivalently rapid clean up of the supply chain, then we can end up with a situation where, in the short term, we have a spike of CO2 emissions, even though we are reducing emissions in the long term.”

According to Elborai, a large amount of carbon dioxide released while deploying clean energy technologies at a high pace will remain in the atmosphere, which will negatively impact the sustainable journey.

“Everybody understands the repercussions of acting too slow in the energy transition. There are impacts of also acting too fast,” he noted.

He added that the right rate of deployment is necessary for a smooth energy transition, void of unintended climate consequences.

During the talk, Elborai noted that technology has a huge role to play to reduce the carbon footprint in the supply chain.

Elborai further pointed out that the exact time required for energy transition cannot be determined, as the timeframe is dependent on several factors.

“I think this (time for energy transition) is something that needs to be studied and modeled. It is something that depends on the progress that is being made in developing technologies and in the deployment of carbon capture. It will change with time as these technologies evolve as well. So it’s something that needs to be constantly monitored and adjusted. It’s not a simple answer,” he said.

He also emphasized the role of recycling critical minerals to reduce emissions in the mining sector.

“There is also a role that recycling can play. If we are using materials that have already been mined, and we are closing the cycle at the end of life, then that can have a role to mitigate the impact. But really, the key measure that needs to be taken is to carefully think about the deployment of renewable technologies. Not too fast, not too slow, just right,” he added.

Elborai went on to say that carbon capture technology has a crucial role in accelerating energy transition in a sustainable manner.

“Using carbon capture as a means of removal or closing the cycle on the carbon is one of the very important measures for managing the spike in emissions during the transition,” added Elborai.

According to Elborai, Saudi Arabia has an advantaged position in both renewables and traditional sources of energy, as the world sails toward sustainability.

“The Kingdom is in a very advantaged position, as Saudi Arabia has a strong advantage in producing conventional (energy). It will be the last standing player or supplier of gas and oil. The Kingdom also has a huge advantage when it comes to solar, wind, and renewable resources,” said Elborai.

He added: “So, at every point in that transition, the Kingdom can actually produce the product that meets the requirements of the end users of energy globally. The Kingdom is definitely a winner when it comes to the energy transition.”