JEDDAH, 2 July — Hotel owners in the Kingdom are trying to persuade the Ministry of Commerce to stop issuing more licenses for hotel projects as part of their desperate attempt to save the industry from bankruptcy.
The fears of investors are based on the finding of a recent study revealing that the occupancy rate in hotels and other tourist accommodations had fallen below break-even level, Al-Watan newspaper reported yesterday.
The study attributed the slump to poor marketing and to excessive number of hotels in most major cities and tourist centers.
The investors, who staked more than SR25 billion in 485 hotels Kingdomwide, have planned to bring their issues to the attention of Prince Abdullah, the regent, for sympathetic consideration.
The study revealed that the occupancy rate in top-notch hotels was 39.5 percent while in the first class it was 38.7 percent. The second and third class hotels fared better with 40.9 percent and 45.8 percent respectively, according to official statistics. The current occupancy rate is disappointing to the investors as their counterparts in other Arab and non-Arab countries are doing a thriving business.
The investors fear that unless some urgent measures are taken to protect their interests the trend will adversely affect the industry that plays a vital role in the economic progress of the country.
The investors, who met here on Saturday to forge a strategy to save the industry from bankruptcy, pointed out that other tourist facilities such as furnished apartments, chalets and tourist centers scattered across the Kingdom faced the same fate.
The problem is felt very strongly in the Western Province where the holy city of Makkah, ancient commercial city of Jeddah and the hill resort of Taif are situated. In the holy city there are 163 hotels that account for 38 percent of all the hotels in the Kingdom with an occupancy rate of 24 percent while in Jeddah it was a little better with 58 percent.
The study said the occupancy rate in Taif was 37 percent.
