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

  • 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.”


OPEC+ moves to set 2027 production baselines

Updated 28 May 2025
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OPEC+ moves to set 2027 production baselines

RIYADH: OPEC+ announced on Wednesday that it will establish a framework to determine new oil production baselines for 2027, marking a significant step in its long-term planning, said an official statement.

The alliance — comprising the Organization of the Petroleum Exporting Countries and partners including Russia—has been negotiating revised production baselines for several years. These baselines serve as reference points from which member states adjust their output levels.

According to the statement issued following the group’s meeting, said it had tasked the OPEC Secretariat with developing a mechanism to assess each country’s maximum production capacity. These assessments will form the basis for 2027 production targets across all member nations.

Since 2022, the group has implemented three tiers of output cuts. Two remain in place through the end of 2026, while the third is being gradually phased out by eight participating countries. No changes were made to the group’s current production policy at Wednesday’s session.

Due to the sensitive nature of the discussions, all sources spoke on condition of anonymity.

The 2027 baselines, once finalized, are expected to guide production policy after the current round of cuts expires.

Oil prices, which dipped below $60 per barrel in April—the lowest level in four years—following OPEC+’s decision to accelerate May output and amid trade tensions triggered by US tariffs, have since rebounded to around $65.


Saudi Arabia launches advanced manufacturing center to boost industrial innovation

Updated 28 May 2025
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Saudi Arabia launches advanced manufacturing center to boost industrial innovation

JEDDAH: Saudi Arabia has launched the Advanced Manufacturing and Production Center, a key initiative aimed at accelerating the Kingdom’s industrial transformation through the adoption of advanced technologies and sustainable practices.

Unveiled on May 28, the center is set to play a central role in promoting efficiency, flexibility, and growth within the manufacturing sector. It will utilize technologies associated with the Fourth Industrial Revolution to localize production and enhance Saudi Arabia’s competitiveness on the global stage.

The initiative also supports strategic industries while aligning with the objectives of Saudi Vision 2030, the country’s long-term plan to diversify its economy. A major focus is encouraging private sector collaboration to speed up the integration of emerging technologies into industrial operations.

The launch supports the National Industrial Strategy, introduced in October 2022, which aims to increase the number of factories in the Kingdom to approximately 36,000 by 2035. The strategy is designed to attract investment, scale up local production, and strengthen non-oil exports.

The Ministry of Industry and Mineral Resources is overseeing several projects to advance the Kingdom’s industrial and logistical infrastructure, positioning Saudi Arabia as a key player in global manufacturing and trade.

“Adopting the latest industrial technologies raises the efficiency of our industrial sector and enhances its competitiveness regionally and globally,” said Khalil bin Ibrahim bin Salamah, deputy minister of industry and mineral resources for industrial affairs, in a post shared by the ministry on X.

In an accompanying video, the ministry reiterated the center’s significance in meeting national goals: “The Advanced Manufacturing and Production Center opens doors to industrial investment opportunities and stimulates the sector to adopt new manufacturing technologies within industrial facilities.”

The center is supported by several initiatives and programs, including the Future Factories Program, which aims to modernize 4,000 factories across the Kingdom. The FFP focuses on integrating advanced manufacturing systems to boost efficiency and build more resilient supply chains—particularly in critical sectors such as food and petrochemicals.

According to its official website, the center serves as a hub for industrial innovation, providing consultancy services, training, and technological solutions. It is dedicated to fostering sustainability and competitiveness across the manufacturing sector.

Through these efforts, the center is expected to significantly contribute to Saudi Arabia’s Vision 2030 goals by localizing high-tech capabilities, attracting investment, and advancing the industrial sector’s role in the nation’s economic diversification.


Closing Bell: Saudi main index rises to close at 11,052

Updated 28 May 2025
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Closing Bell: Saudi main index rises to close at 11,052

RIYADH: Saudi Arabia’s Tadawul All Share Index advanced on Wednesday, closing higher by 127.58 points, or 1.17 percent, to reach 11,052.76, reflecting broad market optimism.

Trading activity remained robust, with a total turnover of SR4.57 billion ($1.21 billion). Of the listed stocks, 202 posted gains while 44 declined.

The Kingdom’s parallel market, Nomu, also recorded gains, rising 340.91 points, or 1.28 percent, to close at 26,932.95. The market saw 48 advancing stocks against 34 decliners.

Meanwhile, the MSCI Tadawul 30 Index climbed 15.12 points, or 1.08 percent, ending the session at 1,413.70.

Fawaz Abdulaziz Alhokair Co. emerged as the session’s top performer, with its share price jumping 5.77 percent to SR16.50.

Ataa Educational Co. and Kingdom Holding Co. followed closely, gaining 5.46 percent and 5.22 percent to close at SR61.80 and SR8.66, respectively.

On the downside, United Carton Industries Co. registered the steepest decline, falling 4.87 percent to SR46.85. Banan Real Estate Co. dropped 2.4 percent to SR4.48, while Nama Chemicals Co. slipped 1.78 percent to SR27.55.

On the announcements front, Saudi AZM for Communication and Information Technology Co. disclosed it has submitted a request to transfer its listing to the main market.

Additionally, the initial public offering for Flynas Co. began on May 28 and will conclude on June 1. The offering is priced at SR80 per share, with a retail tranche comprising 10.25 million shares. According to a statement, BSF Capital is the lead manager.

Alkathiri Holding Co. announced that its subsidiary has signed a 50-year lease agreement valued at SR143 million with the Asir Region Municipality to develop a commercial and hospitality project in the city of Abha.

According to a statement published on the Saudi stock exchange, the project will feature a four-star hotel with a capacity of 180 keys, alongside retail and entertainment facilities. The development aims to boost tourism and enhance commercial services in the Asir region.

The lease will officially begin upon the land handover by the Investment Committee of the Asir Region Municipality.

Shares of Alkathiri Holding closed Wednesday’s trading session at SR2.06, marking a 1.96 percent gain.

In a separate disclosure, Mufeed Co. announced that its board of directors has recommended to the ordinary general assembly the transfer of its statutory reserve balance — totaling SR3.49 million, as reported in the financial statements for the year ended Dec. 31, 2024 —to retained earnings.


Saudi Arabia’s Asir region revitalizes 95% of stalled projects

Updated 28 May 2025
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Saudi Arabia’s Asir region revitalizes 95% of stalled projects

  • Asir is a vast region in the Kingdom with a population exceeding 2 million people
  • Interest from global players seeking early opportunities in the region’s evolving landscape has grown

ABHA: Saudi Arabia’s Asir region has successfully revitalized 95 percent of its previously delayed project, an important milestone that is strengthening investor confidence as the region moves forward with SR29 billion ($7.73 billion) worth of initiatives across various sectors.

In an interview with Arab News, Hashim Al-Dabbagh, CEO of Asir Region Development Authority, stated that a dedicated committee, chaired by Asir Gov. Prince Turki bin Talal, was formed several years ago to tackle long-standing investment challenges that had stalled progress in the region.

“The total number of cases that have been brought to this committee to address has been 63, all brought to the table,” Al-Dabbagh said.

He continued: “Of these 63 cases that have been brought to this committee to address and to solve, 60 cases have been solved, and three are in the pipeline right now, and they’re working on them, and they’re going to solve them relatively soon.”

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Of the 60 resolved, 57 were concluded with outcomes that satisfied investors, reflecting a resolution rate of nearly 95 percent.

“This committee and the work that they have done has created some very positive vibes across the investment ecosystem in Saudi Arabia, which you sense in this forum because there are some very large investors that are coming to Asir, some coming back to Asir which had not been interested in this region in the past,” Al-Dabbagh said.

The board operates in collaboration with various public and private entities, including ASDA, the Ministry of Investment, the Ministry of Tourism, the Tourism Development Fund, and King Khalid University, ensuring a unified approach to accelerating investor activity in the region.

This resolution mechanism plays a key role in supporting the region’s development strategy, which focuses on unlocking investment potential across various sectors.

“First of all, we have a strategy that drives everything that we are doing,” Al-Dabbagh said.

He added: “The strategy has been approved by the center of government, and it says that Asir should be a year-round preeminent destination, so already we know that we need to focus on the tourism sector and complementary and adjacent sectors to the tourism sector. That’s one, and that gives us a lot of momentum in working with the government ecosystem and the private sector.”

Al-Dabbagh emphasized that Asir is more than just a tourism destination, noting that it is a vast region in the Kingdom with a population exceeding 2 million people.

“Within the Asir Development Authority, we have a whole department called Economic Development Department, and they are working diligently this year on sectoral studies across the board.”

He added: “This includes, obviously, tourism-related sectors, but also other ones, so just as an example, we are looking at sports, we are looking at construction. We’re looking at fisheries and agriculture. We’re looking at renewable energy. We’re looking at mining among other sectors.”

The authority is also aligning its economic strategy with educational institutions to ensure the region’s workforce is equipped to meet the demands of upcoming sectors.

“We are working closely with King Khalid University, the TVTC (Technical and Vocational Training Corp.), Bishop University, and other educational institutions to align the strategies and to make sure that their graduates are able to find jobs in the opportunities that are going to be realized as we realize this strategy,” he said.

On attracting investments, Al-Dabbagh stated: “What I call the investment ecosystem in Asir, it’s the framework that we use to assess investments, is comprised of three components. The first component is the Invest in Asir committee, and that’s headed by Prince Turki in his capacity as the chairman of the Aseer Development Authority and includes all the public and private sectors.”

He explained that the region offers a compelling opportunity for early movers due to its untapped potential, strategic government backing, and the ability to enter key sectors before they reach full maturity, providing investors with a critical advantage in shaping long-term development.

“Asir relative to those mature, tourism destinations, offers relatively less mature areas, so when they’re coming in, they’re coming in early and they’re going to have a ... not a first mover advantage, but an early mover advantage compared to people that are going to see this place for five years or 10 years down the road when all these incumbents are already on the ground.”

Attracting FDIs

Foreign direct investment is also gaining momentum in Asir, with growing interest from global players seeking early opportunities in the region’s evolving landscape.

“One of the speakers in today’s forum was Fatih (who is managing partner of FTG Development), and they are looking at an investment worth billions in Asir. That is just one example, and foreign direct investors, they look for successful local investors to partner with,” Al-Dabbagh said.

He concluded: “Our doors are open. We’re very happy to meet with the investors from anywhere.”


EU lifts economic sanctions on Syria

Updated 28 May 2025
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EU lifts economic sanctions on Syria

BRUSSELS: The European Union lifted economic sanctions on Syria on Wednesday in an effort to support the country’s transition and recovery after the toppling of former president Bashar Assad.
The move follows a political agreement reached last week by EU foreign ministers to lift the sanctions.
The EU will keep sanctions related to Assad’s government and restrictions based on security grounds, while also introducing new sanctions against individuals and entities connected to a wave of violence in March, the Council said.
“The Council will continue monitoring developments on the ground and stands ready to introduce further restrictive measures against human rights violators and those fueling instability in Syria,” it added.