Saudi Arabia’s hospitality firms are expected to benefit from huge investments into hotel rooms, infrastructure as well as construction.
Late last month, Saudi Arabia’s Tourism Development Fund, Riyadh Bank and Banque Sandi Fransi have signed a deal to finance about SAR160bn ($43bn) worth of tourism projects within the country.
The fund has been started with an initial investment of $4bn. It is part of plans to diversify the country’s economy that align with Saudi Crown Prince and Chairman of the Council of Economic and Development Affairs Mohammad bin Salman’s ambitious ‘Vision 2030’.
It is intended to generate investment across tourism in collaboration with private and investment banks.
Hospitality companies are ‘riding high on the tourism fund pack’ already, said news agency Arabian Industry citing a report from JLL published last week.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
JLL stated: “While the hospitality industry remains challenged in the short term, in the long-term, however, and in light of the Tourism Development Fund agreement, construction activity in the sector will speed up as the kingdom strives to boost infrastructure, and increase the number of hotel rooms in line with Vision 2030.”
According to JLL, Riyadh saw the delivery of 400 keys, bringing the total hotel stock to 16,000 during the Q3-2020.
Meanwhile, Jeddah’s occupancy rates dropped to 38%, while average daily room rates (ADR) and revenue per available room’s (RevPar) were down by 33% and 62%, to register $181 and $61 respectively.