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Arab News, Thursday, Jul 11, 2019 | Zul Qaadah 8, 1440

Saudi boom from pilgrims, leisure and business visitors

Saudi Arabia: Saudi hotels are expected to benefit from an upswing in tourism, driven by pilgrims as well as leisure and business visitors, according to bookings website Expedia.

Travelers from the US, UAE and UK topped the list for travel demand into the Kingdom in 2018, the company said. The US saw more than 110 percent year-on-year growth in demand compared to the same period in 2017 with almost 45 percent share of total room nights, while UAE visitors grew 140 percent accounting for almost a fifth of total room nights.

The data also revealed strong growth in package demand from travelers in India and Spain, both growing 200 percent on a year earlier. “Major hotel groups are driving construction trends across the country as they aim to meet the demands of an ever-increasing number of domestic tourists and international visitors,” said Paula de Keijzer, a regional senior director of market management at Expedia Group.

Saudi Arabia plans to open up its tourism sector to international tourists as part of its economic reform agenda, which also includes major investments in new resorts along the Red Sea coastline such as the 30,000 square km NEOM mega project.

Real estate consultancy Colliers expects international arrivals to Saudi Arabia to increase by about 5.6 percent annually from 17.7 million in 2018 to 23.3 million in 2023.The growth is expected to be driven by religious tourism, with the aim of extending pilgrim visits. The Kingdom aims to attract 30 million pilgrims by 2030, an increase of 11 million from the 19 million Hajj and Umrah pilgrims in 2017.

Despite expectations for rising visitor numbers, hotels remain under short-term pressure as new room supply awaits expected future demand. 

More than 5,000 keys are forecast to be delivered to the market by 2022, according to CBRE’s market snapshot as more international chains open properties.

Among the most recent arrivals is China’s Oyo Hotels & Homes, which has struck an initial agreement with the Kingdom’s Public Investment Fund to open 50 hotels across seven cities.

It is also establishing two training schools in Riyadh and Jeddah to train Saudi graduates in hotel management.

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