DUBAI: The revenue per available room (RevPAR) of Jeddah hotels last month was the lowest for a November since 2007, industry monitor STR said in its preliminary report yesterday.
RevPAR, arguably the most important of all ratios used in the hotel industry, is derived by multiplying a hotel’s average daily room rate (ADR) by its occupancy rate. The performance metric provides a snapshot of a hotel’s business performance by incorporating room rates and occupancy levels.
STR said Jeddah hotels’ RevPAR was pegged at SR321.06 in November, 25.4 percent lower from a year ago and 26.9 percent lower from SR439.60 a month earlier.
“Preliminary November 2017 data for hotels in Jeddah, Saudi Arabia, indicate significant supply growth and steep performance declines,” STR said.
Among other industry indicators, the occupancy rates in Jeddah hotels was 17.4 percent lower to 45.7 percent while average daily rate during the month was down 9.7 percent year-on-year to SR702.62.
Hotel room supply was up 9.8 percent in November, but demand went down 9.3 percent, STR noted.
The property consultancy JLL in its previous report said that a potential 900 keys could be available by the end of this year with some hotel projects scheduled to be completed, including the 445-room Hotel Galleria By Elaf.
“Over the next two years, a number of midscale hotels are also expected to open under the Ibis and Premier Inn brands,” JLL said.
“The diversification of the hotel market will make Jeddah a more attracted place to visit to broader range of visitors.
The Saudi government recently launched a multi-billion project that aims to develop 34,000 square kilometers of the Red Sea coastline and 50 reef-fringed islands into luxury resorts and luxury residences.
Construction is scheduled to begin in 2019, with the first phase of the project set to be completed by 2022.
Revenue per available room of Jeddah hotels in November lowest in a decade
Revenue per available room of Jeddah hotels in November lowest in a decade
Saudi Arabia inaugurates Yanbu Grain Terminal to boost food security, trade
RIYADH: Saudi Arabia has inaugurated the Yanbu Grain Handling Terminal, underscoring the Kingdom’s efforts to strengthen public-private partnerships, enhance agricultural trade, and bolster food security across the region.
The event was attended by Abdulrahman Al-Fadli, minister of environment, water and agriculture, and by various government and private sector officials, according to the Saudi Press Agency.
The Yanbu Grain Handling Terminal will serve both public and private sector importers, and boasts a storage capacity of 156,000 tonnes, including 12 silos with a combined capacity of 96,000 tonnes.
Food security has risen up the agenda in recent years, as countries in the Gulf contend with the impacts of climate change, the consequences of trade-disrupting conflicts such as the Ukraine-Russia war, and interruptions to supply routes through the Red Sea.
In September 2022, in response to these challenges, the Kingdom collaborated with regional partners to launch a food security action plan with an initial funding of $10 billion.
The Yanbu Grain Handling Terminal will be operated by the National Grains Co., a joint venture between the national shipping carrier Bahri and the Saudi Agricultural and Livestock Investment Co.
It features a 650-meter conveyor belt and a discharge rate of 800 tonnes per hour directly from ships, with an annual handling capacity exceeding 3 million tonnes of grain.
According to Bahr’s statement to the Saudi Stock Exchange, the inauguration delay was caused by the inclusion of additional requirements to enhance future operational efficiency, along with the construction of extra infrastructure to accommodate potential future expansions.
The company said that because of this the total project cost rose by 7 percent from the initially allocated SR412.5 million ($109.7 million), though the increase is not deemed significant.
The Yanbu Grain Handling Terminal aims to become a world-class logistics hub, connecting three continents and supporting the Kingdom’s vision for a resilient and efficient agricultural supply chain.
Established in 2020 as a strategic partnership between SALIC and Bahri, the National Grain Co. aims to fulfill the Kingdom’s future feed grain requirements while enhancing its global competitiveness.
It is committed to advancing grain trade, handling, and storage through the Yanbu terminal, strengthening supply chains and ensuring price stability across Saudi Arabia.
SALIC, a Public Investment Fund-owned company, was formed in 2011 to secure food supply for Saudi Arabia through mass production and investment.
When the project was announced in 2020, Al-Fadli, who is also the chairman of SALIC’s board of directors, said: “The project aims to enhance the velocity of the main grain influx to Saudi Arabia and is considered the first regional center for grains in the commercial port of Yanbu.”
He added that SALIC relies on the geographical location of the Kingdom and the port infrastructure to enhance food distribution in the region by linking the Kingdom to global grain sources, especially countries where SALIC is investing.
A grain delivery service to customers within the Kingdom has been introduced as part of the project, ensuring greater proximity to clients, enhanced customer experience, and improved profitability margins.
UAE’s ADNOC boosts drilling capabilities with 2 new jack-up rigs
- ADNOC Drilling will expand its fleet to 142 platforms
- UAE possesses the sixth-largest crude oil reserves globally
JEDDAH: The Abu Dhabi National Oil Co. has received two new jack-up rigs, reinforcing its position as one of the largest drillship fleet owners globally.
ADNOC Drilling will launch the new rigs by the first quarter of next year, expanding its fleet to 142 platforms. This marks a strong year for the company, showcasing its performance and strategy, according to UAE state news agency WAM.
For over 50 years, ADNOC Drilling has been the exclusive provider of drilling and rig-related services to ADNOC Group under agreed contractual terms, supporting the firm’s upstream operations in exploring and developing oil and gas resources in the UAE.
With most of the Gulf country’s crude oil and gas reserves located in Abu Dhabi, ADNOC oversees the majority of nationwide exploration, appraisal, development, and production activities, which are managed by ADNOC, either independently or in partnership with third parties.
In its analysis of the company’s performance, JPMorgan, a global financial services firm, said: “Since its initial public offering, ADNOC Drilling has proven to be a high-quality, defensive business, consistently meeting and surpassing guidance and expectations. The exceptional performance also reflects positive progress with ADNOC Drilling’s two joint ventures.”
The UAE possesses the sixth-largest crude oil reserves globally, with approximately 107 billion stock tank barrels of proven oil reserves. Since its inception in 1972, ADNOC Drilling has played a crucial role in enabling ADNOC to unlock the country’s oil and gas resources efficiently and reliably, contributing to the nation’s energy sector.
This year, Enersol, a joint venture between Alpha Dhabi Holding and ADNOC Drilling, acquired four oilfield services technology companies, while Turnwell, another business partnership between ADNOC, SLB, and Patterson-UTI, set a record for initial well delivery time, accelerating the development of the UAE’s unconventional energy reserves.
Following its second upward guidance revision this year alongside its third-quarter results, ADNOC Drilling is on track to deliver its best-ever performance in Q4. ADNOC Drilling anticipates at least mid-single-digit expansion as it scales operations, according to WAM.
ADNOC forecasts a rise in drilling activity in the coming years, driven by its commitment to increasing crude oil production capacity by 25 percent, reaching five million barrels per day by 2027.
As the company looks to expand beyond the UAE and explore opportunities in the region, it foresees a growing need to expand its rig fleet to support its strategic growth plans.
The energy giant believes that expanding its rig fleet will enhance its current capabilities in rig hire, drilling, completion services, and associated operations and enable the company to offer unconventional drilling and biogenic well services. This expansion is expected to contribute to increased revenue and profitability.
Terminal 4 at Cairo International Airport to boost Egypt’s aviation and tourism sectors
RIYADH: Egypt is advancing its aviation sector with the ongoing development of Terminal 4 at Cairo International Airport, set to accommodate 30 million passengers annually.
According to a statement from the Cabinet, the “New Republic Air Gateway” project is expected to bolster the country’s tourism goals, improve traveler experiences, and position Egypt as an international aviation hub.
This year, the government announced plans to involve the private sector in airport management, including a global tender for Cairo International.
Egypt’s aviation sector also improved 36 spots to 27th in the 2024 edition of the Air Transport Infrastructure Index, aligning with Vision 2030’s focus on sustainable development, innovation, and global competitiveness.
Prime Minister Mostafa Madbouly, during a meeting at the New Administrative Capital, reviewed progress on the project alongside Minister of Civil Aviation Sameh El-Hefny. The session focused on the terminal’s specifications, implementation strategy, and potential to reshape the African nation’s aviation and tourism landscapes.
“Airport development works come within the framework of presidential directives to upgrade the Egyptian airport system, raise its capacity and improve the level of services provided to passengers,” he said.
At the meeting, Madbouly emphasized the importance of creating world-class facilities to accommodate rising traveler numbers.
El-Hefny outlined the project’s phased execution, with completion expected within four to five years. He also revealed that negotiations are underway with international firms specializing in airport construction and management to ensure world-class execution.
The minister emphasized the cutting-edge features of the new terminal, including its ability to initially handle 30 million passengers annually, with expansion potential to 40 million.
In September 2023, Cairo Airport Co. partnered with Pangiam, a trade and travel technology company, and signed two agreements to develop the new terminal. These deals, focused on enhancing the airport’s operations with advanced technology, include a feasibility study to incorporate emerging technologies and deliver a seamless travel experience.
The terminal will feature a state-of-the-art runway equipped with advanced navigation and lighting technologies that meet international standards.
Once operational, Terminal 4 is expected to elevate Cairo International Airport’s global status, making it a hub for regional and international travel.
Saudi banks report 24% profit growth amid strong non-interest income
RIYADH: Saudi banks’ aggregate profit reached SR7.7 billion ($2.05 billion) in October, marking a 23.67 percent year-on-year increase, newly released data has revealed.
According to the Saudi Central Bank, also known as SAMA, these figures represent profits before zakat and taxes.
Cumulatively, from the beginning of the year to the end of October, banks recorded a total profit of SR73.28 billion, compared to SR64.47 billion during the same period last year.
The increase in banks’ profits is primarily attributed to a combination of favorable factors that highlight the sector’s strength and ability to adapt.
The third quarter of 2024 marked a significant turning point, with non-interest income playing a pivotal role.
According to a Fitch Ratings report published in November, strong gains on securities and trading contributed SR1.4 billion to non-interest income, offsetting higher financing impairment charges and helping push combined quarterly profits to SR20 billion.
This growth followed SAMA’s decision to implement a 50-basis-point interest rate cut in September, which mirrored the US Federal Reserve’s shift toward a more accommodative monetary policy.
The rising interest rate environment that characterized much of the Gulf region in recent years had previously bolstered bank returns on loans, as higher borrowing costs translated into greater income from financing activities.
However, this dynamic also increased funding costs, particularly for savings accounts and external liabilities.
Many Saudi banks navigated these challenges by diversifying their funding sources, tapping into external markets, and issuing a record $13 billion in debt in the first eight months of 2024 to meet growing foreign-currency financing demands, particularly for giga-projects.
Despite these efforts, deposit growth in the third quarter of 2024 lagged behind earlier quarters, according to Fitch, reflecting the sector’s strategic pivot toward external funding to sustain its expansion.
The recent shift in monetary policy by the US Federal Reserve, which influences rates in Saudi Arabia due to the riyal’s peg to the dollar, has injected new dynamics into the financial landscape.
After a period of aggressive rate hikes to combat inflation, the Fed lowered interest rates by 50 basis points in September, followed by successive 25-basis-point cuts in November and December, signaling a focus on boosting economic growth as inflation eased to acceptable levels.
This policy change benefited Saudi banks by improving the valuation of certain securities, as noted by Fitch, and created a more favorable environment for non-interest income growth.
Another critical factor underpinning Saudi banks’ profitability has been their robust asset quality and prudent risk management.
The average impaired financing ratio, according to Fitch Ratings, remained low at 1.5 percent by the end of the third quarter, with provision coverage at a healthy 116 percent.
This stability reflects the resilience of Saudi banks in managing risks associated with their expanding financing books, which grew by 3.6 percent during the quarter, led by strong performances from banks like Aljazira, Saudi Awwal Bank, and Saudi Investment Bank.
The sector’s healthy operating environment is supported by the Kingdom’s broader economic stability and strategic investments under Vision 2030, which continue to drive demand for corporate financing.
While external liabilities and a negative net foreign asset position present challenges, Saudi banks remain well-capitalized, with average Common Equity Tier 1 ratios of 15.6 percent, and are positioned to maintain strong asset quality metrics as they navigate a shifting global monetary landscape.
The combination of rising non-interest income, strategic funding diversification, and favorable monetary policy shifts underscores the resilience of Saudi Arabia’s banking sector, making it a key player in the region’s economic transformation.
As SAMA continues to align with global trends, Saudi banks are poised to further strengthen their profitability while maintaining a balanced approach to growth and risk management.
Saudi Arabia strengthens food security with trout farming breakthrough
RIYADH: Saudi Arabia’s food security strategy has received a boost with a trout farming project developed through a partnership between King Abdulaziz City for Science and Technology and King Abdulaziz University.
The initiative, carried out at KACST’s research station in Al-Muzahmiyya Governorate, was supported by the Ministry of Environment, Water, and Agriculture’s National Livestock and Fisheries Development Program.
The project introduces trout as a species suited for diverse environmental conditions, expanding the availability of fish with high nutritional value. This move aims to address the growing domestic demand for seafood while mitigating potential supply chain disruptions.
This aligns with Saudi Vision 2030, which set a target of increasing domestic fish production to 600,000 tonnes annually to ensure sustainable food supplies.
The initiative also supports the National Fisheries Development Program’s goals of optimizing resource use, boosting the sector’s contribution to gross domestic product, achieving seafood self-sufficiency, and diversifying income sources.
The new project employs a recirculating aquaculture system, which uses less water than traditional methods and reduces the risk of parasites and viral infections that could harm fish.
These advanced systems also regulate key environmental factors in fish farming, such as temperature, oxygen levels, and nutrition, thereby enhancing aquatic animals health and quality.
This initiative aligns with the National Laboratory’s ongoing efforts to localize RAS technology using fresh water.
Trout were farmed and raised from the egg incubation stage to the point where they reached a commercial size of over 1,200 grams.
This success has encouraged the private sector to adopt the technology across various regions in Saudi Arabia, including Riyadh, Makkah, Al-Baha, and the northern regions.
Trout and other cold-water river fish were specifically chosen for local farming to meet the growing demand for high-protein, omega-3-rich, and vitamin-packed fish, which are essential for human health.
In October, the Ministry of Environment, Water, and Agriculture announced that Saudi Arabia’s fisheries and aquaculture production increased by 55.56 percent in 2023, surpassing 140,000 tonnes. This highlights the Kingdom’s commitment to achieving food self-sufficiency and promoting sustainable development.
The ministry noted that the country has achieved record-breaking production levels in saltwater and inland aquaculture projects, surpassing the 90,000 tonnes recorded in 2021.
Aquaculture in the Kingdom, which began in 1982, has grown substantially, establishing the nation as a leading exporter of white shrimp.
