Saudi hotel construction boom being led by Makkah

New report says holy city has more than 24,000 hotel rooms currently in construction pipeline
Saudi hotel construction boom being led by Makkah
The under-construction Makkah Royal Clock Tower hotel complex in the holy Saudi city of Makkah.
By Staff writer
Tue 22 Mar 2016 01:52 PM

The holy city of Makkah is leading hotel development in Saudi Arabia with 24,133 rooms currently in the construction pipeline, according to a new report.

Riyadh follows with 10,053 rooms and Jeddah with 6,980 rooms under development, with the majority of rooms forecast to open over the next five years, said the report by TOPHOTELPROJECTS commissioned by The Hotel Show Saudi Arabia 2016.

It said Makkah is ranked second in the Middle East and Africa for the number of hotel rooms set to enter the market, behind only Dubai, with 43,714 rooms currently in the pipeline.

"With the holy cities of Makkah and Madinah forecast to exceed 17 million visitors by 2025, the number of local and international hoteliers looking to invest continues to grow," said Christine Davidson, group event director of the dmg events hospitality portfolio, organisers of The Hotel Show Saudi Arabia 2016.

"With the Abraj Kudai forecast to open in Makkah in 2019, adding 10,000 new rooms to the market, it is not surprising that Saudi Arabia leads the way in hotel construction."

The report identifies The Carlson Rezidor Hotel Group as one of the top 10 international brands with the most projects currently under development throughout Saudi Arabia. Its pipeline includes two new hotels set to open in Makkah - Park Inn by Radisson Al Naseem Makkah (2016), and Park Inn by Radisson Aziziyah Makkah (2017).

Basel Talal, district director, The Rezidor Hotel Group Saudi Arabia and general manager of the Radisson Blu Hotel in Riyadh said: "The evolution of religious tourism has been a priority for Saudi Arabia's Government over the past years and has resulted in considerable investment and interest from developers and operators alike."

Grant Salter, head of Travel, Hospitality and Leisure Advisory at Deloitte, will discuss market performance, trends and projects in Jeddah and Makkah at the Hotel Show Saudi Arabia 2016 in Jeddah in May.

He said: "The substantial rise in supply expected over the next few years in both Jeddah and Makkah will be interesting to observe as the supply and demand dynamics currently show a market in balance with occupancy and ADR relatively unchanged over the last 12 months. Makkah should be able to cope with the rise in supply expected but Jeddah could face headwinds."

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