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Aggressive expansion in Saudi Arabia
December 2015 3199

The Kingdom of Saudi Arabia has seen significant changes in 2015.

The accession of King Salman Bin Abdulaziz Al Saud in January precipitated a widespread government reshuffle. The structural fall in oil prices since June 2014 has fundamentally changed the economics of the kingdom. The year also saw Riyadh’s policy focus diverted towards security and defence activity both domestically, and outside its borders in Yemen, Syria and elsewhere.

The tourism sector has emerged as a key plank of the Saudi government’s plan to expand its non-oil economy. The Saudi Commission For Tourism and Antiquities has laid out an ambitious strategy to attract 45.3 million tourists each year by 2020, compared to 14 million in 2013. The plan envisions the development of 50,000 additional hotel rooms and 74,000 new furnished apartments.

The kingdom has 108 projects under way already, featuring 28,000 rooms, according to Top Hotel Projects, a hotel research consultancy. Capital city Riyadh alone has 42 hotel projects in the pipeline, making it the fourth most active city in terms of hotel development after Dubai, New York and London, according to the report. Jeddah ranks seventh globally with 31 hotels comprising 7,000 rooms under construction.

Some of the biggest developments will be undertaken in the holy places of Makkah and Madinah. Aljazira Capital estimates around 43 per cent of the hotel supply in Makkah and 46 per cent in Madinah is three-star and above, suggesting an oversupply of premium hotels.


Although Rotana operates top-rated hotels and resorts in cities such as Abu Dhabi, Dubai, Makkah, Bahrain, Doha, Salalah, Beirut, Amman, Istanbul and Sharm al Sheikh, it is in Saudi Arabia that the chain’s potential for growth is most significant.

'The hotel segment in the kingdom is the largest in the Arab world,' explains Omer Kaddouri, president and chief executive at Rotana. 'We looked at the arrival of 88 million visitors to Saudi Arabia for religious tourism, leisure tourism and business activity between now and 2020.'

According to Kaddouri, by 2017, Rotana will have opened the doors to six new hotels in Riyadh, Jeddah, Al Khobar and Dammam, making an additional 1,500 rooms and suites available to visitors. Four of these properties fall under the Centro by Rotana brand, a new designation that meets the demands of all kinds of travellers on all types of budgets.


Carlson Rezidor strengthens its Saudi Arabian presence with the recent announcement of the Park Inn by Radisson Makkah Al Naseem. The midscale hotel will be the group’s first property to open in the holy city. It will feature 463 rooms and open in June 2016.

'Saudi Arabia is a focus country for our group. The kingdom actively develops its infrastructure and industries, and will play an increasingly important role within the travel and tourism sector of the Middle East. We want to be an active partner supporting this process, and look forward to further expanding our network together with our regional partners,' Wolfgang Neumann, president and CEO of Rezidor has said.


AccorHotels will add more than 2,000 new hotel rooms to Makkah in a mega project by Al Rajhi Investments. The operator signed three management agreements with Al Rajhi for a trio-cluster of hotel properties in Al Naseem, a mega complex by Al Rajhi in Makkah.

The Al Naseem project is being built around Al Rajhi Mosque, the second largest in Makkah after the Grand Mosque, and will feature six hotels from four international hotel groups offering close to 5,000 rooms in total. The AccorHotels cluster comprising Novotel, Adagio and ibis Styles properties will constitute three of the six hotels at Al Naseem, and with 2,354 rooms, will account for nearly half of the keys that will be offered at the complex. The hotels are expected to be completed in 2019.

AccorHotels also expanded its partnership with Alesayi to add 15 Adagio aparthotels in Saudi Arabia to be developed over the next five years.


Hilton Garden Inn Tabuk was announced recently, in partnership with ADFX Contracting, Maintenance and Operations. The 104-room hotel is the brand’s first property in Tabuk.

Located 15 minutes from Tabuk Regional Airport, the hotel is ideal for travellers. The new hotel is convenient to several local attractions including the 17th century Repentance Mosque and the ancient Tabuk Castle.


Millennium & Copthorne, Middle East and Africa announced the signing of two new hotels in Makkah, with Al Rajhi Investments, as part of the operator’s strategy to open more than 20 hotels in the kingdom, within the next five years. Due to open in 2017, the 822-key Millennium Hotel and 502-key Copthorne Hotel will both be located in the south eastern boundary.

Shaza Hotels also announced two new properties in collaboration with Al Rajhi Investments in Makkah and Riyadh. The 251-key Shaza Hotel in Makkah is due to open within the next 12 months, while the 205-key hotel in Riyadh, is due to open in 2017.

The Elaf Group of Companies recently announced the signing of an agreement with AMAC Investment to manage two new hotels in Madina Al Munawara. The Elaf Mashal Al Madina offers 158 rooms while the Elaf Mashal Al Salam 208 rooms.

The Ascott Limited opened Ascott Tahlia Jeddah and Ascott Sari Jeddah within months of each other, marking the entry of the first international branded serviced residence in the Saudi city. The Singapore-headquartered holding group CapitaLand has further planned openings of Citadines Al Salamah Jeddah this year, Ascott Rafal Olaya Riyadh next year and Somerset Corniche Jeddah in 2017. 

By Rashi Sen


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