Saudi Arabia to get 75 new hotels by 2020

Saudi Arabia is set for a bevy of new supply. At least that's what the Middle Eastern country is saying—estimating some 75 new hotels over the next four years. Salah Al Bakheet Al Talib, VP of the Saudi Commission for Tourism and National Heritage, was reported in Saudi media as saying that the kingdom could expect to see a range of new properties—particularly in the midscale and upscale segments. 

“Several global hotel companies are entering the Saudi market to operate 75 hotels over the next four years, with the support of the SCTNH, as a result of commission’s efforts to create a sustainable business environment for the hotel industry [here],” Al Talib said. 

The predictions came after Al Talib signed an investment agreement with Choice Hotels International and Equinox Ventures, a joint venture between Dubai-based consultancy Equinox Group and Al Tayyar Travel Group, at the end of last month. Under the deal, Choice is to launch its three most prominent brands—Clarion, Comfort and Quality—in Saudi Arabia and the UAE.

Choice Hotels International and Equinox Ventures
Choice Hotels International and Equinox Ventures signing their agreement.

"Currently, markets such as Dubai, Riyadh, Jeddah and Makkah are undersupplied in mid-market hotel accommodations, providing an opportunity for a strong hotel brand such as Choice to bring its portfolio to the market," Shuja Zaidi, president of Equinox Group  said at the time. "We believe that the next wave of growth and expansion in our region belongs to the mid-market segment. To prepare for it, it was only natural that we partner up with one of the largest and most globally recognized brands with a portfolio that spans from mid- to upscale properties and can offer travelers what they need."

According to Al Talib, negotiations are underway with several other unnamed international hotel companies to enter the Saudi market.
Wyndham Hotels Group is one operator poised for further expansion in the kingdom, its regional president and managing director Daniel Ruff said last month. “We have only really scratched the surface of what we can do [there],” he said.

Jeddah's Pipeline

Among Saudi cities, Jeddah's hotel stock is set to double in a little more than two years. The ‘Jeddah Hotel Market Overview’ report by JLL predicted that the current supply of 8,600 rooms available as of the end of the last quarter will double, with another 8,600 rooms expected to open by the end of 2018. In total, the city will have an estimated 17,200 rooms.

Ritz-Carlton Jeddah
Ritz-Carlton Jeddah

Major projects in the Jeddah pipeline include a Ritz-Carlton, the Radisson Blu Al Salamah, the Movenpick City Star, the Elaf Galleria and Assila Hotel & Residence by Rocco Forte.

AccorHotels Middle East own a significant margin of Jeddah’s hotel portfolio, with nearly 600 rooms currently open. The brand's stock is set to reach 3,000 hotel rooms in the coming years.

“We are on track to have 50 operational hotels in the Kingdom with more than 13,500 rooms," Olivier Granet, managing director and COO of AccorHotels Middle East, said. "By 2020 we are quintupling our network in Jeddah with a fivefold increase from three existing hotels to 15.” The company has been focusing on the development of multi-brand projects; especially clusters that comprise midscale and economy hotels and serviced apartments, Granet said. One notable project in the city will include a Novotel, Ibis and Adagio together.

Sources: Arabian Business, Hotelier Middle East