Saudi Arabia is ripe for hotel development

Saudi Arabia Pipeline

After the price of oil fell last year, Saudi Arabia saw a surge in hospitality developments, according to experts at the Gulf and Indian Ocean Hotel Investors’ summit. 

At one roundtable discussion, an "industry stakeholder" said that the Kingdom has seen more domestic development rather than international, particularly in Jeddah, Riyadh and the holy cities of Makkah (or Mecca) and Medinah. 

Hyatt Hotels VP acquisitions and development Peter Penev said that ever since the oil crisis began, developers "have started looking ‘inward’ and investment opportunities within have hence been on the up." Real estate experts also said that the "plummeting" costs of construction in Saudi Arabia has made development increasingly lucrative.


Like this story? Subscribe to IHIF!

The hospitality industry turns to IHIF International Hotel Investment News as the must-read source for investment and development coverage worldwide. Sign up today to get inside the deal with the latest transactions, openings, financing, and more delivered to your inbox and read on the go.

“Apart from construction costs, the government recently introduced a fee on vacant land,” said Riyada International Hotels and Resorts founder and managing director Mohammad Al Amir. “In the past there were no penalties for just having a piece of land in the middle of the city. [People would] leave it vacant, let it appreciate and then sell it off. But a decision was made late last year to impose fees if you simply hold on to it, and do not develop any anything there.” 

Al Amir told the delegates that the amount to be paid in penalties is 2.5 percent of the land’s evaluation.

Be sure to check out Hotel ROI, a series of one-day conferences focused on how to leverage a hotel asset for maximum returns.


Suggested Articles

The S.C.-based restaurant group picked hospitality veteran Larry Spelts to lead its new hotel management and consulting division.

The East Palo Alto, Calif., property features the intelligent gym and personal trainer in select guestrooms.

Infor cloud solutions now connect siloed applications and reduce manual processes for the California resort.