Saudi hotel industry leading the world thanks to Vision 2030 push

Saudi hotel industry leading the world thanks to Vision 2030 push
Committed to positioning Saudi Arabia as a leading global hub, public bodies continue to work closely with the private sector to develop world-class hotels and resorts across the Kingdom. (SPA)
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Updated 07 May 2023
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Saudi hotel industry leading the world thanks to Vision 2030 push

Saudi hotel industry leading the world thanks to Vision 2030 push
  • Hotel industry monitoring firm STR says Kingdom leads Middle East and Africa region’s hotel building activity

RIYADH: By all accounts, it is a boom time for the hospitality industry in Saudi Arabia. 

The latest data from hotel industry monitoring firm STR shows the Kingdom leads the Middle East and Africa’s hotel building activity, with 42,033 hotel rooms under construction as of March, accounting for 35.1 percent of the 119,505 being built in the region. 

That places Saudi Arabia only after China and the US in the global hotel construction market.

But that’s not all. Under Vision 2030, the Kingdom’s hotel sector is expected to grow further, and have 310,000 hotel rooms by 2030 with an investment size of $110 billion, data released by Knight Frank indicated. 

Not surprisingly, the Kingdom’s hospitality industry is witnessing steady growth in key performance indicators. 

Take Riyadh’s hotel occupancy rate, for instance. It hit 75.5 percent in February, the highest figure since 2008, according to data released by STR in March.

Compared to 2019, the occupancy in February jumped 23.4 percent, the average daily rate rose 34 percent to SR801.46 ($213.46), and the revenue per available room increased 65.3 percent to SR605.06. 

Additionally, Saudi Arabia’s hotel segment is projected to generate $2.51 billion in revenue this year and is expected to reach $3.02 billion by 2027, according to Statista. 

“The hospitality industry is undoubtedly poised for accelerated growth and the region is currently leading the travel and hospitality sector globally,” Guy Hutchinson, president and CEO of hospitality group Rotana, told Arab News. 

Rotana has seven hotels in the pipeline in Saudi Arabia, including five new properties in Riyadh that are being negotiated. These properties will almost triple the number of rooms the firm operates in the Kingdom to 6,000 over the next four years.

“Today, we are seeing constant infrastructure works taking place at full speed in order to meet the growing demand with more hotel groups expanding their footprint across the Kingdom,” added Hutchinson.

Giga-projects in focus

Committed to positioning Saudi Arabia as a leading global hub, public bodies continue to work closely with the private sector to develop world-class hotels and resorts across the Kingdom, including the development of giga-projects such as Red Sea Global, AMAALA, NEOM, Diriyah Gate and Qiddiya.

“Saudi Arabia’s giga-projects represent developments that are unique in scope and vision,” Ludwig Bouldoukian, regional vice president, development for Middle East and Africa at multinational hospitality company Hyatt, told Arab News.

“With construction underway at RSG and Diriyah, we already see significant progress and are very excited for what’s to come,” he added.

He also explained how the Kingdom plays a “pivotal role” in Hyatt’s growth strategy in the Middle East with anticipated room growth of more than 80 percent in Saudi Arabia by late 2025. 

Haitham Mattar, managing director for India, the Middle East and Africa at IHG Hotels & Resorts, also talked up the welcoming environment for companies looking to expand.

“As Saudi Arabia works towards achieving its Vision 2030 goals, the Kingdom’s ambition to introduce new and novel developments is clear,” he said, adding: “NEOM’s The Line, a linear city with no roads, vehicles or emissions, and running on 100 percent renewable energy, is a prime example of this ambition. 

“Such projects underline the fact that there is growing demand for innovative experiences and offerings.” 

FASTFACTS

• Under Vision 2030, the Kingdom’s hotel sector is expected to grow further, and have 310,000 hotel rooms by 2030 with an investment size of $110 billion.

• Saudi Arabia’s hotel segment is projected to generate $2.51 billion in revenue this year and is expected to reach $3.02 billion by 2027.

• Riyadh’s hotel occupancy rate hit 75.5 percent in February, the highest figure since 2008, according to data released by STR in March.

Sandeep Walia, chief operating officer, Middle East, at Marriott International, told Arab News: “We are excited to be part of the largest development projects in the Kingdom such as RSG, Diriyah Gate and NEOM. We are also thrilled to introduce new luxury brands into the market.”

Ahmad Darwish, chief administrative officer at RSG, told Arab News that three resorts are set to open in the development this year, with a further 13 set for 2024.

“We are partnering with international brands to bring the very best that the world has to offer to Saudi Arabia and are firmly on track to welcome guests this year to our first resorts at the Red Sea, marking a new milestone by becoming the first of the original giga-projects in the Kingdom to receive visitors,” he said.

Way forward

Speaking to leading figures in the global hotel industry, it is clear that the tourism sector in Saudi Arabia is only going to continue to thrive.

Amir Lababedi, Hilton’s managing director of development for the Middle East and North Africa, told Arab News the reason the hotel chain is so keen for more sites in the Kingdom is because of the opportunities being fostered.

The hospitality industry is undoubtedly poised for accelerated growth and the region is currently leading the travel and hospitality sector globally.

Guy Hutchinson, Rotana president and CEO

“As we plan to grow our portfolio to more than 75 hotels in the Kingdom in the coming years, we’re enthusiastic about the future of Saudi Arabia as it embarks on its mission to become a global tourism destination,” he added.

Executives from both Wyndham Hotels & Resorts and Accor told Arab News they are set to speed up expansion plans in the Kingdom, such is the positive outlook for a sector that is a key part of the Vision 2030 initiative. 

Marriott International’s Walia talked up this aspect of the hospitality environment, and said: “The Kingdom is not only investing in the infrastructure to meet the demand for hotel accommodation but is also working on wider initiatives that will have a direct impact on the hospitality industry and attract local, regional and international travelers.”  

He added: “Access is one of the key areas that the country has made significant changes to. The country’s plans around developing and expanding airports in the Kingdom will play a key role in driving access into key cities and destinations. 

“The recently launched Riyadh Air, which adds another national carrier, will also play a pivotal role in expanding the country’s network and connectivity to destinations across the globe.” 

Walia went on to say that the Kingdom’s recent policies around visas and entry into the country will play a “key role in driving more traffic into the country.”

He added: “These are all factors that will support and further grow the hospitality sector in the country.”


Closing Bell: TASI loses 34.45 points to close at 12,465 

Closing Bell: TASI loses 34.45 points to close at 12,465 
Updated 17 April 2024
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Closing Bell: TASI loses 34.45 points to close at 12,465 

Closing Bell: TASI loses 34.45 points to close at 12,465 

RIYADH: Saudi Arabia’s Tadawul All Share Index closed at 12,465.98 points on Wednesday, dipping 34.45 points or 0.28 percent. 

The parallel market, Nomu, gained 92.53 points or 0.35 percent to close at 26,401.91. 

Meanwhile, the MSCI Tadawul 30 Index also slightly declined 9.29 points or 0.59 percent to conclude at 1,569.13.  

The main index posted a trading value of SR9.5 billion ($2.55 billion), with 96 stocks advancing and 131 declining. 

Ash-Sharqiyah Development Co. was the top performer on TASI as its share price surged 9.95 percent to SR21.44. Batic Investments and Logistics Co. followed with its share pricing jumping 9.27 percent to close at SR2.83. 

Saudi Ground Services Co. also performed well, climbing 9.09 percent to SR58.80. The Mediterranean and Gulf Insurance and Reinsurance Co. and Almunajem Foods Co. increased 8.53 and 6.32 percent to SR28 and SR117.80, respectively. 

Conversely, Fawaz Abdulaziz Alhokair Co. recorded the most significant dip, declining 5.16 percent to SR11.40. 

Astra Industrial Group and Etihad Etisalat Co. also experienced setbacks, with their shares dropping to SR175.40 and SR51.39, reflecting declines of 3.73 and 3.39 percent, respectively. 

Saudi Chemical Co. and Saudi Real Estate Co. also reported significant losses of 3.08 percent and 2.88 percent to SR7.87 and SR22.22, respectively. 

Nomu’s top performer was Future Care Trading Co., which saw a 10.68 percent jump to SR9.64. 

Ladun Investment Co. and Mayar Holding Co. also recorded notable gains, with their shares closing at SR5.63 and SR4.10, marking an increase of 9.96 and 7.89 percent, respectively. 

Lana Medical Co. and Al-Modawat Specialized Medical Co. also fared well, as their share price increased by 7.25 and 6.92 percent, closing at SR42.90 and SR151.40. 

On Nomu, Alqemam for Computer Systems Co. was the worst performer, declining by 9.72 percent to SR90.10. Other underperformers included Saudi Parts Center Co. and Clean Life Co., whose share prices dropped 6.10 percent and 5.71 percent to SR60.0 and SR94.20, respectively. 


Chinese businesses shown NEOM opportunities as ‘Discover’ tour hits Beijing, Shanghai

Chinese businesses shown NEOM opportunities as ‘Discover’ tour hits Beijing, Shanghai
Updated 17 April 2024
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Chinese businesses shown NEOM opportunities as ‘Discover’ tour hits Beijing, Shanghai

Chinese businesses shown NEOM opportunities as ‘Discover’ tour hits Beijing, Shanghai

RIYADH: Opportunities for Chinese companies to engage with and invest in NEOM have been showcased in Beijing and Shanghai, attracting significant interest from several companies. 

The giga-project kicked off the Chinese leg of its global “Discover NEOM” tour in the capital on April 15, followed by a visit to the country’s biggest city on April 17, attracting a cumulation of over 500 business and industry leaders. 

Organized in partnership with the China Council for the Promotion of International Trade Beijing and CCPIT Shanghai, the events featured presentations by NEOM’s leadership team that highlighted on-the-ground progress and milestones, as well as detailed overviews of the initiative’s diverse economic sectors.  

Numerous opportunities for Chinese companies to engage and invest in the advanced urban and economic zone were showcased during these gatherings, eliciting significant interest. Many companies expressed enthusiasm and discussed concrete next steps with NEOM’s leadership, according to a release. 

“We are grateful to CCPIT Beijing and CCPIT Shanghai for supporting our visit to China and for the opportunity to present NEOM’s vision,” Nadhmi Al-Nasr, CEO of NEOM, said.  

“To date, NEOM has already engaged with over 15 major Chinese businesses and invested in a number of Chinese startups to support the growth and diversification of NEOM. Collaboration with China will continue to play a vital role in the development of NEOM, and we look forward to strengthening our engagement with the country’s business community,” he added. 

Over 100 Chinese building companies participated in the event’s construction-focused forum, which presented many collaboration opportunities. 

Furthermore, the private showcase, “Discover NEOM: A New Future by Design,” was a highlight of the events.  

It offered guests an immersive experience exploring NEOM’s developments. These included THE LINE, a 170-km-long city designed as the future of urban living; Oxagon, which is reshaping the traditional industrial model; Trojena, NEOM’s mountain resort; and Sindalah, a luxury island destination in the Red Sea set to open later this year. 

“Both Beijing and NEOM are accelerating the development of new modes of productivity, deepening comprehensive reforms, promoting scientific and technological innovation, and working to ensure the protection of our environment,” Guo Huaigang, chairman of CCPIT Beijing, said. 

“We look forward to the role our cooperation can have in Beijing’s future prosperity,” he added. 

Expressing Shanghai’s interest in fostering its relationship with Saudi Arabia, Zhao Zhuping, deputy secretary general of the Shanghai Municipal Government, stated that the entity looks forward to deepening mutually beneficial engagement with NEOM. 

“Discover NEOM China” marks the latest installment of NEOM’s global roadshow, following engagements in major international cities such as Seoul, Tokyo, and Singapore, as well as New York, Boston, and Miami. 

Paris, Berlin, and London have also been visited by the expedition. 


Saudi crude production hits 7-month high in February

Saudi crude production hits 7-month high in February
Updated 17 April 2024
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Saudi crude production hits 7-month high in February

Saudi crude production hits 7-month high in February
  • The Kingdom’s crude exports rose to 6.32 million bpd or 0.32 percent: JODI data

RIYADH: Saudi Arabia’s crude production reached a seven-month high of 9.01 million barrels per day in February, data from the Joint Organizations Data Initiative showed. 

This represented a rise of 55,000 bpd or 0.61 percent compared to the previous month.  

Furthermore, the data indicated that the Kingdom’s crude exports rose to 6.32 million bpd, reflecting a monthly increase of 0.32 percent.  

In early April, the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, chose to keep their existing output policy unchanged as oil prices hit a five-month high.  

Led by Saudi Arabia and Russia, OPEC+ extended voluntary output cuts of 2.2 million bpd until June to bolster the market. The decision was reached during the 53rd meeting of the Joint Ministerial Monitoring Committee on April 3.  

Oil prices surged due to supply constraints, attacks on Russian energy infrastructure, and conflicts in the Middle East, with Brent crude exceeding $89 a barrel.  

This extension of cuts, alongside voluntary reductions announced in April 2023, including 500,000 bpd cuts from both Saudi Arabia and Russia, now extends through December of this year. 

As a result of this decision, despite the monthly increase, crude output remains approximately 14 percent lower than the levels observed during the same month last year. 

The next JMMC meeting is scheduled for June 1.  

Refinery output 

Meanwhile, refinery crude output, representing the processed volume of crude oil yielding gasoline, diesel, jet fuel, and heating oil, surged to a five-month high. It increased by 10 percent compared to the previous month, reaching 2.68 million bpd, according to JODI data. This also marked a 10 percent increase from the 2.44 million bpd recorded during the same period last year. 

As one of the world’s leading oil producers, Saudi Arabia plays a crucial role in supplying these refined products to meet global energy demands. 

In February, diesel, constituting 38 percent of the total output, declined by 7 percent to 1.02 million bpd, with its percentage share decreasing from 45 percent in January. Motor aviation or jet fuel maintained a 22 percent share, experiencing an 11 percent increase to 597,000 bpd. Meanwhile, fuel oil, making up 17 percent of the total refinery output, saw a slight uptick of 0.22 percent, totaling 455,000 bpd. 

Conversely, refinery output exports surged to a 10-month high, reaching 1.39 million bpd, a 12 percent monthly increase. The most significant rise was observed in motor and aviation oil, up by 45 percent to 275,000 bpd. Fuel oil exports followed with a 38 percent increase to 219,000 bpd, while diesel oil saw a 13 percent rise to 629,000 bpd. 

In February, 62 percent of refinery diesel oil output was exported, marking the highest percentage in eight months. Fuel oil and motor and aviation gasoline followed suit with export percentages of 48 percent and 46 percent, respectively. 

Direct crude usage 

Saudi Arabia’s direct burn of crude oil, involving the utilization of oil without substantial refining processes, experienced an increase of 52,000 bpd in February, representing a 17 percent rise compared to the preceding month. The total direct burn for the month amounted to 360,000 bpd. 

The Ministry of Energy aims to enhance the contributions of natural gas and renewable sources as part of the Kingdom’s goal to achieve an optimal, highly efficient, and cost-effective energy mix. 

This involves replacing liquid fuel with natural gas and integrating renewables to constitute approximately 50 percent of the electricity production energy mix by 2030. 


Zain KSA introduces first 100% Saudi-made fleet tracking solution for businesses 

Zain KSA introduces first 100% Saudi-made fleet tracking solution for businesses 
Updated 17 April 2024
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Zain KSA introduces first 100% Saudi-made fleet tracking solution for businesses 

Zain KSA introduces first 100% Saudi-made fleet tracking solution for businesses 

RIYADH: Saudi telecom provider Zain KSA has become the first operator in the Kingdom to offer a 100 percent locally made fleet tracking system for businesses.  

The new system is expected to empower businesses in Saudi Arabia to make informed decisions through comprehensive reports generated from precise data collection. 

The launch of the system, entirely made in the Kingdom for the business sector, integrates cutting-edge tracking devices that are locally designed, manufactured, and assembled under the country’s “Saudi Made” program, the company said in a statement.

The telecom company further explained that the monitoring solution is a comprehensive cloud-based platform, providing businesses of all sizes with tools to optimize logistics operations, enhance travel routes, and minimize fuel consumption. This, in turn, reduces carbon emissions, preserves the environment, and fosters sustainability.

Saad bin Abdulrahman Al-Sadhan, chief business and wholesale officer at Zain KSA, said: “We are proud to be the first telecom and digital services provider to offer an integrated solution designed and developed in the Kingdom, aligning with our sustainability strategy of supporting local content.”

He added that their achievement aligns with the aspirations of the country’s leadership and Vision 2030 in enhancing the digital economy and localizing technology.

He also emphasized his company’s commitment to building an integrated technological ecosystem aiming at leveraging digitization and automation to serve and empower the productive, service, and logistical sectors across the Kingdom.

The executive further said that their fleet management method is a direct result of this commitment, and they take immense pride in being at the forefront of companies providing 100 percent national digital solutions.

The firm said in its release that by offering real-time GPS tracking, its system enhances road safety and security across the transportation and logistics sectors, empowering decision-makers with crucial insights through comprehensive reports based on accurate data.

It added that the system allows for informed decisions that boost operational efficiency and save costs.


Saudi Arabia and Spain strengthen collaboration in urban infrastructure and renewable energy sector

Saudi Arabia and Spain strengthen collaboration in urban infrastructure and renewable energy sector
Updated 17 April 2024
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Saudi Arabia and Spain strengthen collaboration in urban infrastructure and renewable energy sector

Saudi Arabia and Spain strengthen collaboration in urban infrastructure and renewable energy sector

RIYADH: Saudi-Spanish collaboration is set to flourish in the fields of urban infrastructure development, renewable energy, and engineering technology after a high-level meeting in Madrid. 

During a three-day visit from April 15-17, Saudi Arabia’s Minister of Municipal, Rural Affairs, and Housing, Majed Al-Hogail, met with executives from leading Spanish companies to explore collaboration opportunities. 

The tour is part of the Kingdom’s broader initiative to foster international partnerships that enhance its urban and infrastructure capabilities, the Saudi Press Agency reported.   

Al-Hogail’s engagements included a discussion with Pablo Bueno, CEO of TYPSA, focusing on potential collaboration in the fields of infrastructure solutions, energy efficiency, and sustainable urban development.   

They discussed activating a circular economy in buildings and infrastructure and creating new asset management platforms and engineering value solutions.  

Additionally, the minister met with José Vicente, CEO of Indra, one of the leading engineering technology and consulting firms, to discuss digital transformation in municipal services.   

This collaboration aims to enhance the quality of services provided to Saudi citizens and residents and foster innovation.  

Al-Hogail also held a meeting with Pedro Fernandez Alen, president of the National Construction Confederation, to discuss collaboration opportunities and share insights on Vision 2030’s strategic objectives for the housing sector. The discussions highlighted the significant Spanish investments in Saudi Arabia, which exceed $3 billion, with a substantial portion directed toward real estate ventures.

The minister underscored the robust growth in Saudi Arabia’s housing sector, noting the provision of housing solutions for 1.5 million families over the past five years. He highlighted the delivery of approximately half a million housing units and the launch of major residential developments. With plans to add more than 300,000 housing units by 2025 and aiming for nearly one million units by 2030, these efforts are set to further boost the Kingdom’s attractiveness for domestic and international investments.

Al-Hogail also pointed out the significant contribution of the real estate sector to the Kingdom’s non-oil gross domestic product, which reached 12.2 percent, while the construction and building sector contributed 11.3  percent by the third quarter of 2023.

Concluding his visit, Al-Hogail will preside over the Saudi-Spanish Business Forum, organized by the Council of Saudi Chambers and Saudi-Spanish Business Council.