Hotel chains sign deals for $5.5bn Makkah project

Hilton, Hyatt and Marriott to manage properties in mega project, Hilton to hire 9,000 staff
Hotel chains sign deals for $5.5bn Makkah project
Holy Kaaba, Mecca, Saudi Arabia, Hajj, Sharia, Sharia compliance, sukuk, Islamic finance
By Shane McGinley
Wed 18 May 2011 06:02 PM

Saudi’s Jabal Omar Development Company has inked deals with Hilton Worldwide, Marriott International and Hyatt International to operate a slew of hotels at its $5.5bn project in Makkah.

The three hotel chains will operate 12 properties at the mega development, which will house 37 hotel towers up to 48-storeys tall and provide accommodation for 45,000.

Under the terms of the deal Hilton will operate six properties in the development, a move that will triple its Saudi portfolio and call for the recruitment of 9,000 staff in the kingdom over the next three to four years,

“There’s no mistaking the potential for even further growth in the kingdom,” said Ian Carter, president, global operations and development, Hilton Worldwide.

“We are also seeing an increased interest from owners who are developing hotels in the secondary cities… to make the most of the booming market.”

US hospitality chain Marriott International will operate three hotels in the project, bringing the number of properties it operates in Saudi Arabia to 11.

Fellow American hotelier Hyatt International will also manage three hotels in the holy city, which will open over the next three years.

Saudi’s holy cities play host to millions of religious tourists each year, who flock to the kingdom to undertake the pilgrimages hajj and umrah. The number of pilgrims entering the kingdom is expected to grown to almost 14 million by the end of the decade, providing a lucrative market for hoteliers keen to tap into demand for quality accommodation.

JODC agreed in March to pay Saudi Oger more than $157m to terminate its contract on the mixed-use project in Makkah after the two sides failed to agree on a lump sum price.

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