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Hospitality Industry in Saudi Arabia Goes Boom-Boom

madinah hilton saudi arabia
Having gained immense importance among the GCC countries for employment reasons, developments in the Saudi hospitality sphere have majorly been driven by a highly proliferating tourism sector. This being quite clearly validated by the fact that during 2013, the kingdom accounted for the largest share of rooms (63.6%), for accommodation in the region.

Religious Tourism Giving A Major Push

Saudi Arabia may be the world’s biggest oil exporter, but there’s no denying the fact that the country earns a major share of its GDP through tourists coming to pay reverence for the rituals of Umrah and Hajj.

Religious tourism in the country has remained on an all-time high, scoring new figures every now and then. Having accounted for nearly 3% of its Gross Domestic Product in 2013, the country has seen nearly 7 million tourists visiting the country’s holy sites like Makkah and Madinah, every year. Goes without saying that this has given a major push to the hospitality and hotel industry, pushing for an increased capacity of accommodation, year by year. Though flabbergasting, but by the time the kingdom enters 2025, it is expected to witness 16 million tourists in Makkah and 9 million in Madinah in every financial year.

Economy Hotels Might Just Make the Cut

Like in other countries in the GCCevery Middle Eastern country, the hospitality industry in Saudi Arabia comprises of international branded luxury hotels and the ones which don’t belong to a brand. For instance, the major five start hotels present in the country consist Swissotel Makkah, Hotel Al Shohada, Dar Al Ghufran, Makkah Palace etc. These generally are located in the central area (Masjid Al Haram) and charge high rates per day, when compared to the hotels and properties on the outskirts of the area. In spite of the high ADRs (Average Daily Rates), the economy hotels in Makkah, Madinah and all across the country have seen a great opportunity to make the cut and entice maximum number of tourists, in the last five years.

Given the low penetration currently, the branded economy hotels are expected to exploit the present potential for vast growth and come up with increased job opportunities for the talented. For instance, in Madinah over 25 hotels have been demolished in the central area, for reconstruction purposes. The supply gap created here, can be easily backfilled by creating quality economy hotels and accommodation around Haram.

In addition to the aforementioned facts, corporate tourism in Riyadh, Jeddah and the Eastern Province has also been on the rise. With the hotel occupancy in these cities taking a steep ascent post the global financial crisis, the performance in the hospitality market is expected to creep up with huge numbers.

Goes without saying that, it’s only a matter of time when Saudi Arabia will be the prime destination and home to the world’s most prosperous hospitality industry.

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