Growing domestic tourism, influx of tourists from Arab countries and the continued expansion of religious tourism have steered development of the hospitality sector in the Kingdom, with the global names eyeing it as a key potential market.

With the rising tourism business and the exponential expansion of the hospitality industry, the sector is now perceived by investors as the second most attractive hospitality market and well considered as a key source of income promoting economies, creating job opportunities for the Saudi youth and raising the levels of integration between different economic sectors.

According to the Saudi Commission for Tourism and Antiquities (SCTA), there are about 1,267 hotels and 2,661 furnished apartments in the Kingdom, and by 2015 the number of hotels will increase, thus contributing to Saudization as the hotels will aim to recruit 40 percent of their employees from the local population.

With 61,319 hotel rooms, Makkah features the most hotel accommodation in the Kingdom, followed by Alkhobar (12,186), Jeddah (11,500), Riyadh (10,514) and Madinah (7,890).

Makkah’s hotel expansion will mark an additional 13,200 rooms coming to the market in the next three years equaling an 18 percent increase in supply, while Madinah would see an injection of 5,436 rooms during the same period equaling a 41 percent growth rate.

SCTA recorded 172 percent increase over 10 years in hotel numbers, which has further requirement for growth of 83 percent or more than 230,000 hotel rooms, ranging from serviced apartment units to luxury five-star suites.

Riyadh and Jeddah have emerged as rate and profit leaders among major GCC cities.

SCTA and the Investor Co., a financial consultation firm, has signed a contract for providing financial consultation for private placement of shares of the Saudi heritage hospitality company, which is integrated with the elements of the King Abdullah project for care of cultural heritage of the Kingdom.

The company is planned to manage and operate a number of heritage hospitality facilities owned by the State.

Trade experts suggest that in the coming years, there will be demand for high quality services and interiors by international travelers and the expected number of hotel employees will increase from 18,600 to 2.3 million hotel employees by 2020.

Industry experts from the business chambers and SCTA at different seminars stated that the Saudi market is expected to receive 88 million visitors by 2020 from local and international markets, with the annual Haj and year-round Umrah visitors accounting for 20 million by 2014 and with the long-term vision to boost the tourist influx from 47 million visitors in 2008 to 88 million in 2020, the demand for hotel rooms is set to surge from 242,000 to 381,000 hotel rooms.

A recent report from the Saudi Arabian Monetary Agency (SAMA) stated the GDP of Saudi domestic tourism during 2012 increased by 6.8 percent compared to 2011 to reach SR70.2 billion and the volume of inbound tourism spending in 2012 rose by 16.8 percent to SR57.2 billion, compared to about SR 49 billion for the previous year.

On the expenditure side of the incoming tourists to the Kingdom, the report said the spending on accommodation facilities ranked first by about SR19.7 billion, up by 34.5 percent from the total in 2012, while spending on shopping came second by about SR15.5 billion representing 27 percent of the total expenditure of the incoming tourist trips in 2012.

The department of licensing and quality assurance at SCTA monitors the hotels and furnished apartments across different provinces of the Kingdom to ensure quality services.

Ahmed Al-Eisa, assistant vice-president for licensing and quality assurance, said: “Inspection teams of SCTA across the Kingdom do inspection visits on the accommodation facilities according to the set program in order to ensure these facilities abide by approved prices in addition to posting price lists and operation licenses, classification degrees and complaint boxes in a visible place at the facilities’ entrances.”

This is applied on all the facilities that are licensed by Saudi Commission for Tourism and Antiquities (SCTA).

Tourism trips increase during holidays and school breaks, especially in Makkah and the Eastern Province, in addition to Qassim, Hail and other provinces, which usually host tourism festivals during holidays.

Both the citizens and expatriates can report on any price violation by accommodation facilities via SCTA’s toll-free number (19988), or through lodging an official complaint at its nearest branch when they detect any increase in prices above the allowed rate in hotels or furnished apartments, or in case the intended facility does not show the price-list in a visible place, taking into account that the allowed price-rise is 50 percent for hotels and 30 percent for furnished apartments during the breaks.

In this context, Baha region is working on the means and mechanisms of developing the role of accommodation facilities in the province, review the obstacles that block the efforts of facilities’ operators in addition to hearing to their demands and suggestions.

Al-Jouf Province is also working for the development in the sector with rehabilitation of accommodation facilities and museum.

Moreover, the Jazan Tourism Development Council, recently announced that Jazan has allocated SR460 million within the current fiscal year for the development of Fursan Island and that the total amount that will be allocated for Fursan development project during the next three years is about SR3 billion.

The efforts will continue to include various mountain municipalities, taking into account their environmental safety.

SCTA expected for Fursan Islands to turn into ecotourism destination soon and commended the great

solidarity shown by the local public departments for the execution of the approved project.

Shoura Council members, including the current and former members, have expressed their deep appreciation of the efforts of SCTA in the rehabilitation and preservation of heritage and archaeological sites in the Al-Ula municipality.

Furthermore, SCTA is working with German expert in entertainment cities Martin Han along with an Indian expert in entertainment industry Prakash Vivekanand to discuss a number of issues related to the development of entertainment cities in the Kingdom and the focus is on the importance of harnessing all the efforts for the development of the tourism sector and making it one of the key tributaries of the national economy in order to achieve the objectives of the social and economic development plans in the forefront of which come the diversification of income sources, GDP growth and creating more job opportunities to the Saudi citizens.