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Fri 23 Mar 2012 10:25 AM

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Riyadh poised for 79% hotel sector growth

Saudi city has more than 5,600 hotel rooms in construction pipeline, says STR Global

Riyadh poised for 79% hotel sector growth
(Photo for illustrative purposes only)

Riyadh is set for a hotel sector boom and will grow nearly 80 percent if all rooms in its construction pipeline open, STR Global has said in a new report.

The Saudi capital will see its hotel rooms offering expand by 79.4 percent if all 5,645 rooms in its active pipeline come to fruition, according to the February 2012 STR Global Construction Pipeline Report.

Overall, the Middle East/Africa hotel development pipeline comprises 498 hotels totalling 134,893 rooms, the report said.

STR Global said five other markets in the region are expected to grow more than 25 percent if all rooms in their active pipelines open.

Abu Dhabi's hotel sector is seen growing 64 percent with 11,133 rooms; Jeddah will grow 60.7 percent with 3,587 rooms while Muscat is set to expand by 49.4 percent with 2,104 rooms.

STR Global's report also said Dubai's hotel market was forecast to grow by 45.3 percent with 26,643 rooms and Amman, Jordan by 27.4 percent with 1,797 rooms).

Last month, it was reported that Saudi Arabia was the best performing market for hotel tourism growth last year, while Arab Spring violence saw occupancy levels and room rate levels plummet in Bahrain, Lebanon and Egypt.

A study by Arabian Business, based on figures from accountancy firm Ernst and Young, looked at the occupancy levels, average room rates and room yields in some of the main tourist cities in the region.

Saudi Arabian cities of Makkah and Madina topped the list, while anti-government protests across the region had an impact on other Gulf and Arab hotspots.

Bottom of the list was the Bahraini capital of Manama, where occupancy levels fell to 32 percent and average room yields slumped by 85 percent.

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