More than 300,000 hotel rooms to be added in Saudi Arabia by 2030

Knight Frank’s data research on the Kingdom’s hotels outside of the giga-projects shows that there are currently 129,000 hotel and serviced apartment keys in the country. File
Knight Frank’s data research on the Kingdom’s hotels outside of the giga-projects shows that there are currently 129,000 hotel and serviced apartment keys in the country. File
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Updated 01 May 2023
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More than 300,000 hotel rooms to be added in Saudi Arabia by 2030

More than 300,000 hotel rooms to be added in Saudi Arabia by 2030

RIYADH: More than $1 trillion worth of real estate and infrastructure projects, including 315,000 hotel rooms, are under development or in the pipeline in Saudi Arabia, according to industry experts speaking ahead of the upcoming Future Hospitality Summit Saudi Arabia to be held in Riyadh from May 7 to 9. 

The number of hotel keys is likely to almost double to around 200,000 in the next four to five years, with at least 50 percent of the proposed supply becoming operational by 2028, with some existing properties exiting from the market to make way for new hotels and resorts. 

Turab Saleem, head of tourism and hospitality at Knight Frank, said: “The Saudi government’s strategy includes attracting 100 million visitors by 2030, and that means creating and delivering first-class gateways and developments, such as the $500 billion NEOM. The $1 trillion projects already underway represent just one-third of the total spending plan, reinforcing the country’s aggressive plan to deliver world-class infrastructure, hospitality, tourism and residential facilities to meet the targets set out in Vision 2030.”

“The outlook for hospitality investment in the Kingdom looks promising, with hotel and tourism development not only focused on the major cities of Riyadh and Jeddah, but spreading quickly to other parts of the country, too. Our analysis shows that the delivery of all planned hotel rooms — which cover the luxury, mid-market and serviced apartment sectors — will cost around $110 billion.”

Echoing similar views, HVS, a leading global consultancy focusing on the hospitality sector, said the government continues to make significant strides in facilitating the growth of different sectors across the country, with notable investments in the hospitality and tourism space. 

Hala Matar Choufany, president – Middle East, Africa and South Asia at HVS, said: “The surge in tourism and arrivals into KSA over the last 18 months alone — largely the result of legislation changes and visa facilitation — is a testament to the country’s growing allure. Interestingly, this uptick is not confined to established destinations and sectors such as commercial and religious tourism. ‘Bleisure’ and leisure tourism are equally on the rise, with secondary cities welcoming new visitors from far and wide. As the country continues to diversify its offering, the outlook looks positive, and, while it is early days in terms of planning and future investment, the hospitality market and investment opportunities are significant.”

Knight Frank’s data research on the Kingdom’s hotels outside of the giga-projects shows that there are currently 129,000 hotel and serviced apartment keys in the country. By 2030, that figure will have grown by more than 60 percent to 212,000 keys in 5-star, 4-star, 3-star and under, and serviced apartment sectors, with 4-star properties accounting for almost half of the total development cost of $21.3 billion. Meanwhile, the Kingdom’s giga-projects represent nearly 73 percent of the hotel supply pipeline, with a 62 percent surge in the number of 4- and 5-star hotel rooms by the end of the decade.

And Saudi Arabia’s tourism expansion is not limited to land-based destinations and attractions. The cruise industry, which is set to create up to 50,000 jobs in the country, is expected to bring in 1.5 million visitors annually within the next five years, according to the Public Investment Fund.

Turab Saleem said: “The herculean, $110 billion task of transforming Saudi Arabia’s hospitality landscape goes well beyond the delivery of extra hotel room keys, and care and attention must be taken to launch the correct quantum of product in the right locations.” 

HVS anticipates that franchises and lease agreements are set to become a new trend in the Saudi hospitality market.  

 


Saudi Arabia’s real estate supply reservations more than double

Saudi Arabia’s real estate supply reservations more than double
Updated 06 December 2023
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Saudi Arabia’s real estate supply reservations more than double

Saudi Arabia’s real estate supply reservations more than double

RIYADH: Citizens in Saudi Arabia are gaining greater access to residential units as the real estate supply reservations surged 110 percent year on year in November to reach 12,503, according to new figures.    
The Kingdom’s National Housing Co. announced that residential units were sold at competitive prices starting from SR250,000 ($66,649) compared to the previous year’s rates, in which the lowest contract amounted to SR321,000 per residential unit, the Saudi Press Agency reported.
This falls in line with the Gulf country’s plans and strategies to launch several extensive residential projects in order to achieve a balance between population growth and rapid urban expansion.   
This also comes as the rise in population density has led to increased demand for housing, meaning the Kingdom is working to boost the real estate supply to meet this need, aligning with a sustainable urban approach.
This rapid increase in reservations is mainly attributed to the launch of a number of residential projects in various regions, the most prominent of which is the inauguration of the Al-Fursan Suburb in Riyadh which aims to provide the largest real estate supply with a high level of quality and luxury. Other projects include the Sadayem Suburb which was launched in Jeddah along with many housing schemes in distinctive locations within the main cities.
In fact, the number of residential projects reached 46 during 2023, thereby cementing Saudi Arabia’s innovative model for real estate development.
National Housing Co. is the leader and enabler of the real estate development sector and the largest major developer of suburbs and residential communities in the Kingdom characterized by quality of life.  The company pumps more than 300,000 housing units into eight suburbs and six residential communities on an area of more than 120 million sq. meters, accommodating more than 1 million citizens.
It seeks to find solutions to secure supply chains with high quality and more sustainable construction materials, as part of the company’s keenness to increase the real estate supply with residential options according to international standards.
All the firm’s efforts are directed to achieving the goals of the housing program by raising the percentage of residential ownership for Saudi families to 70 percent by 2030.


Council of Ministers to approve Saudi general budget on Wednesday

Council of Ministers to approve Saudi general budget on Wednesday
Updated 05 December 2023
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Council of Ministers to approve Saudi general budget on Wednesday

Council of Ministers to approve Saudi general budget on Wednesday

RIYADH: Saudi Arabia’s Council of Ministers will hold a session on Wednesday to approve the Kingdom’s general budget for the new fiscal year, Saudi Press Agency reported on Tuesday.

A preliminary budget statement issued in October showed predictions of real gross domestic product growing by 0.03 percent this year compared with a previous forecast for growth of 3.1 percent.

The document also projected the government would post a budget deficit of 1.9 percent of the gross domestic project in 2024, 1.6 percent of GDP in 2025, and 2.3 percent of GDP in 2026.

The statement said “limited budget deficits” would continue in the medium term.

Meanwhile, total expenditure was seen as rising to SR1.262 billion in 2023, from an earlier estimate of SR1.114 billion, before slowing down marginally to SR1.251 billion in 2024.

A government press conference will be held on Wednesday, with the participation of Minister of Finance Mohammed Al-Jadaan, during which he will address the state’s general budget for the next fiscal year, and the numbers and indicators of the contents of the budget will be announced.
The finance minister will also answer questions during the conference, which will be broadcast live on Saudi channels.


Saudi Arabia offers tax incentives for companies moving regional HQs to Riyadh

Saudi Arabia offers tax incentives for companies moving regional HQs to Riyadh
Updated 05 December 2023
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Saudi Arabia offers tax incentives for companies moving regional HQs to Riyadh

Saudi Arabia offers tax incentives for companies moving regional HQs to Riyadh

RIYADH: Saudi Arabia said on Tuesday it will offer tax incentives for foreign companies that locate their regional headquarters in the Kingdom, including a 30-year exemption for corporate income tax.

The tax incentives include zero income tax for foreign entities that move their regional headquarters in the Kingdom, and these benefits can be availed from the date of the regional headquarters issuance license, according to Saudi Arabia’s Ministry of Investment. 

Saudi Arabia’s program to attract foreign companies to open their regional headquarters in the Kingdom is a joint initiative between the Ministry of Investment and the Royal Commission for Riyadh City. 

The regional headquarters program aims to encourage international companies to open their regional headquarters in the Middle East and North Africa region in Saudi Arabia, and to materialize that the Kingdom is offering a wide range of benefits and incentives. 

Saudi Arabia’s Minister of Investment Khalid Al Falih said that Saudi Arabia is offering more incentives to foreign companies which open their regional headquarters in the Kingdom which includes special benefits for firms complying with Saudization requirements. 

He added that the friendly business environment in Saudi Arabia has made over 200 companies relocate their headquarters to the Kingdom. 

Saudi Finance Minister Mohammed Al-Jadaan said: “The new tax exemptions, granted on the activities of regional headquarters of international companies in the Kingdom will give these firms more clarity of vision and stability, which will enhance their capabilities for future planning and expanding their business in the region, starting from the Kingdom,” Al-Ekhbariya reported. 

Earlier in November, Al-Falih said that Saudi Arabia has already surpassed the targets of the regional headquarters program which aimed to attract 160 international firms by the end of this year. 

In an interview with Bloomberg, Al-Falih noted that the regional headquarters program is a long journey and added that the Kingdom is working with international entities to create the right ecosystem to open their offices in Saudi Arabia. 

Some of the noted companies that opened their regional headquarters in Saudi Arabia in recent months are PwC Middle East and GE Healthcare. 

He also added that Saudi Arabia is a stable destination for international investors, at a time of geopolitical tensions and economic headwinds. 


Riyadh, Doha sign multiple deals across various sectors

Riyadh, Doha sign multiple deals across various sectors
Updated 05 December 2023
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Riyadh, Doha sign multiple deals across various sectors

Riyadh, Doha sign multiple deals across various sectors

RIYADH: Saudi Arabia and Qatar have signed multiple agreements and memorandums of understanding as both nations continue to strengthen their relationship. 

These deals, which are expected to enhance trade and economic relationships between Saudi Arabia and Qatar, were signed during the 44th Gulf Cooperation Council Summit in Doha on Tuesday. 

Saudi Arabia’s sovereign wealth fund and the Qatar Investment Authority signed an MoU to accelerate investments in the energy and infrastructure sector, according to a report by the Qatar News Agency.

Another MoU was signed between Saudi Arabia’s Digital Government Authority and Qatar’s Ministry of Communications and Information Technology to promote cooperation between the two nations in the field of digital governance. 

Saudi Arabia’s Prince Saud Al-Faisal Institute for Diplomatic Studies signed an additional MoU with Qatar’s Diplomatic Institute of the Ministry of Foreign Affairs to cooperate in the field of diplomatic training. 

The Saudi Central Bank, also known as SAMA, signed an MoU with its counterpart in Qatar for cooperation between financial institutions. 

Another agreement was signed between the Saudi Authority for Intellectual Property and Qatar’s Ministry of Commerce and Industry to further collaborate in the field of intellectual property. 

An additional cooperation agreement was signed between the Saudi Broadcasting Authority and Qatar Media Corporation to develop relations in the radio and television industries. 

The two countries also signed a memorandum of understanding for cooperation in the fields of sports. 

On Dec.4, foreign ministers of Qatar and Saudi Arabia held a meeting in Doha to develop bilateral relations. 

“Today we held the first meeting of the executive committee of the Qatari-Saudi Coordination Council in Doha, where we discussed ways to develop bilateral relations within the framework of the executive committee,” said Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman Al-Thani, who is also the country’s prime minister. 

During the meeting, Saudi Foreign Minister Prince Faisal bin Farhan and Al-Thani discussed ways to deepen cooperation in areas of mutual interest. 


COP28 president hails global leaders’ practical initiatives at final dialogue

COP28 president hails global leaders’ practical initiatives at final dialogue
Updated 05 December 2023
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COP28 president hails global leaders’ practical initiatives at final dialogue

COP28 president hails global leaders’ practical initiatives at final dialogue

RIYADH: COP28 President Sultan Al-Jaber has applauded world leaders for their practical initiatives during the final dialogue, expressing optimism for the continued “open mindset” throughout the remainder of COP.  

This comes as high-level dialogues between the COP28 Presidency and the International Energy Agency received a strong endorsement of practical actions. 

The conclusion of the dialogues, co-chaired by Al-Jaber and the executive director of the IEA, Fatih Birol, marked a significant achievement, bringing together over 40 high-level leaders, including four heads of state and 18 heads of delegation and ministers from diverse regions.  

Al-Jaber said: “I am encouraged by the practical actions brought forward by world leaders today at the final dialogue, and I hope that you take this open mindset and optimism throughout this COP.” 

Addressing the significance of the dialogues, Al-Jaber emphasized the need for collaboration, stating: “This series of dialogues has allowed us to converge on the critical elements of the just energy transition. The transition will not be straightforward, but it will be harder if we cannot agree on its central components.”  

Birol echoed this sentiment, expressing satisfaction at the alignment and support for the IEA’s five goals for COP28.  

These goals include tripling renewable capacity and doubling energy efficiency by 2030, a structured decline in fossil fuel use, commitment from the oil and gas industry to align with 1.5 degrees, and financing mechanisms for clean energy in developing countries. 

The leaders showed strong support for the COP28 presidency’s Global Renewables and Energy Efficiency Pledge, with over 110 countries signing up to the initiative.   

Urgency on the coal front emerged as a key consensus, with a focus not only on preventing new unabated coal plants but also on accelerating the retirement of existing facilities. 

As the final dialogue unfolded during the World Climate Action Summit as part of COP28 in Dubai, heads of state, government leaders, and international organizations convened to solidify their commitment to an orderly energy transition.  

Al-Jaber urged participants to carry the open mind and optimism demonstrated during the final dialogue throughout COP28, reinforcing the importance of collective action in addressing the pressing challenges of our time.  

This positive momentum sets the stage for further deliberations and collaborative efforts at COP28 UAE, hosted at Expo City Dubai till Dec. 12.