Business Traveller (Middle East)
KSA HOTEL BOOM
Saudi Arabia’s tourism drive is inspiring a new wave of unique hospitality concepts
AS SAUDI ARABIA OPENS ITS DOORS TO TRAVELLERS FROM ACROSS THE GLOBE, THE HOTEL INDUSTRY IS RESPONDING WITH ENTHUSIASM, INTRODUCING NEW PROPERTIES AND HOSPITALITY CONCEPTS THAT WILL PUT THE COUNTRY ON THE WORLD BUSINESS AND LEISURE TOURISM MAP
In September 2019, Saudi Arabia made history by issuing tourist visas online or on arrival to citizens of 49 countries for the first time. Within the first month, 77,000 e-visas were issued, with the figure rising to 350,000 for the final quarter of 2019, the Saudi Commission for Tourism & National Heritage’s (SCTH) Chairman, Ahmed Al Khatib, revealed at January’s World Economic Forum in Davos, Switzerland.
The bold initiative pushed up Saudi Arabia’s visitor number total to 15.5 million in 2019, a figure anticipated to grow by 7 per cent between 2020 and 2024 to around 21.3 million, according to Colliers International data.
The new liberal visa rules are just one facet of the wide-ranging Vision 2030 initiative – Saudi Arabia’s blueprint for rapid socio-economic transformation – with tourism earmarked as a primary growth sector.
Government targets include attracting 100 million visitors a year by 2030, growing tourism’s contribution to GDP to 10 per cent by that date (from the current 2 per cent).
With Saudi Arabia now easier to visit than ever before, local and international hotel operators have responded with vigour, announcing their accelerated growth plans.
At the recent Saudi Arabia Hospitality Investment Conference (SHIC) in Riyadh ( January 2020), global names including Accor, Hilton, InterContinental Hotels Group (IHG), Marriott International, Millennium Hotels & Resorts MEA, Hilton Hotels and Rotana unveiled their ambitious expansion strategies for the kingdom.
There are currently more than 38,912 rooms under construction in
Saudi Arabia, equating to 38.3 per cent of existing supply, according to figures by industry analytics specialist STR, and this figure will continue to rise at pace if plans announced at SHIC come to fruition.
But it’s not just the volume of new hotel rooms coming online that is exciting the industry, as well as current and potential travellers to the kingdom. It is the scope for innovative concepts too, from luxury tented camps and eco resorts to spiritual hospitality offerings in the Holy Cities and lifestyle properties that reflect modern and cosmopolitan Saudi Arabia.
Christopher Lund, Head of Hotels at Colliers International Middle East and North Africa, points out that both domestic and international traveller demographics are shifting rapidly, driving a need for hotel solutions that meet their changing behaviours and demands.
“The Saudi demographic is largely made up of millennials and Gen Z who account for approximately 69 per cent of the total population,” he notes. “New hotel projects should be aimed at the young profile of domestic guests who demand experiences.
“We [therefore] expect to see more contemporary luxury and lifestyle hotels entering the market over the next few years. Their focus should be experiences rather than the material.”
Lund identifies the need for hospitality projects that “encourage social interactions”, including coworking spaces and community hubs, as well as dining experiences that include locally inspired menus to provide guests with an insight into the Saudi Arabian cuisine and culture.
“We might also see more ‘affordable luxury’ lifestyle brands such as
Moxy, Citizen M and Motto, as
well as more EWAA (Eco-tourism, Wellness, Adventure and Agritourism) developments in rural and scenic areas,” he suggests, highlighting AlUla, Abha and Al Ahsa as prime destinations for such developments due to their unique landscapes and favourable climates.
Luxury hotel group Aman
Resorts has already recognised this opportunity and is set to open three eco-conscious hotels in AlUla, home to cultural heritage sites including Mada’in Salih, Saudi Arabia’s first UNESCO World Heritage Site.
They include a luxury tented camp that is “at one with nature” and a ranch-style desert resort in an “otherworldly setting”.
“We expect to see more hotels in this space as the push for sustainable hospitality continues to take shape in the kingdom,” adds Lund.
LEADING BRANDS MOVE IN
AlUla is also a development focal point for Accor, which is currently the leading hospitality provider in Saudi Arabia where it operates 36 properties and has another 45 planned.
Having been selected by the Royal Commission for AlUla (RCU) as the exclusive hospitality partner for the Winter at Tantora festival in AlUla, operating the Ashar Camp with 27 tented rooms, five villas and 54 RV (Recreational Vehicle) camps at the cultural event, it will also be the first international operator to takeover and manage Shaden Resort AlUla under its MGallery brand. This luxury tent-style resort will offer a range of eco-tourism, adventure, wellness and cultural activities.
Accor’s CEO for the Middle East and Africa, Mark Willis, says the group aims to “spearhead new lifestyle experiences that showcase and preserve the very best of Saudi Arabia” and so similar projects are in negotiation for properties to be managed under Mantis, the luxury eco-focused brand in which the group has a 50 per cent stake.
As a leading conservation-led hospitality company renowned for its tented accommodation concepts and commitment to preserving the communities, wildlife and the environment, Mantis is a good fit in a country committed to the sustainable development of its tourism industry.
Discussions are also under way to debut exclusive and all-inclusive luxury entertainment resorts in Saudi Arabia under Turkish brand Rixos, another hospitality company in which Accor has invested, while the group is meeting demand for luxury long-stay apartments in the kingdom with Fairmont Ramla Serviced Residences, set to open in Riyadh this year.
Meanwhile, Dhahran in the Eastern Province is the chosen destination for the global debut of Accor’s new Novotel Living brand, with the upscale serviced apartment property co-located with a Novotel hotel in the landmark KFUPM Business Park project.
Another hotel industry behemoth, Marriott International, will open more than 20 new properties in Saudi Arabia by 2024, taking its total to 49. Four of those will launch in 2020, including the first Le Meridien hotel in Riyadh, plus the Courtyard by Marriott Riyadh Northern Ring Road and the Jeddah Marriott Hotel Madinah Road.
New hotel projects should be aimed at the young profile of domestic guests who demand experiences
The hotel group is also taking over the Burj Rafal Hotel in the capital and re-badging it as a JW Marriott property, marking the brand’s debut in the kingdom.
Travellers can expect to see Marriott move into new markets such as Jubail and Yanbu in the future as the economies of both flourish under Vision 2030.
Hilton is upping the stakes too, recently revealing plans to quadruple its portfolio in Saudi Arabia over the next five years to more than 50 hotels.
The operator, which already manages Waldorf Astoria, Conrad, Hilton Hotels & Resorts, Double Tree by Hilton and Hilton Garden
Inn properties, is on a mission to introduce new brands, including lifestyle-focused Canopy by Hilton and Embassy Suites by Hilton.
TAPPING NEW TRENDS
And so, the expansion race continues, with UAE-headquartered Rotana on track to almost double its Saudi Arabia portfolio over the next few years. The hospitality specialist currently operates six properties and has five more planned, including its first Arjaan-branded property in the kingdom - the 300-room DAMAC Arjaan by Rotana, Riyadh. Arjaan taps into growing market demand for fully furnished apartments with hotel services, catering to the growing number of long-stay guests visiting the kingdom for work purposes.
The group has also identified strong potential for high-quality but affordable accommodation in Saudi Arabia and its Centro by Rotana brand, designed specifically for budgetconscious guests and savvy business travellers, is proving popular in this respect, reveals Rotana President and CEO Guy Hutchinson.
“The Centro brand was created with today’s cosmopolitan traveller in mind and we’re delighted with how well it has been received,” he says.
“Combining contemporary design with the latest in-room technology and attractive fitness, leisure and dining spaces, it aligns perfectly
to the current climate in Saudi Arabia, which is home to a young population eager to embrace modern, trendsetting concepts that resonate with their evolving lifestyle needs.”
Rotana currently operates five Centro by Rotana hotels in the kingdom and is exploring several opportunities to open more before 2030, Hutchinson reveals.
COWORKING AND CULTURE
It is no secret that the rise in digital nomads and an increase in business travel has led to hotels around the world incorporating coworking spaces as part of their service offering.
In its January ‘Redefining Real Estate in KSA’ report, Colliers International notes there were more than three million coworkers globally in 2019 and this number is anticipated to double by 2022.
“In line with Vision 2030, we expect to see an increase in coworking spaces as Saudi Arabia pushes for more freelancers and entrepreneurs in the kingdom,” the study says.
“The younger demographic will play a big factor in the development of coworking spaces in hotel public places such as the lobby and meeting rooms.”
Kerten Hospitality has jumped on this trend with a boutique hotel and coworking space in Jeddah’s new City Yard project – a dynamic creative mixed-use lifestyle destination in the upmarket Al Rawdah district.
It will feature The House Hotel Jeddah, a luxury boutique brand that targets affluent travellers seeking local discovery, and an Ouspace – a modern workspace and business club offering tailormade office spaces for short- and long-term let, enabling entrepreneurs and businesses to work flexibly and collaboratively. It will follow hot on the heels of Kerten Hospitality’s first Ouspace opening on Jeddah’s Madinah Road last year.
“Our second Ouspace will be dedicated to mixing business and leisure (‘ bleisure’), offering a convenient work and Social Hub for guests of The House Hotel Jeddah and the local community, as well as relaxed spaces for Pilates, dedicated music studios and more,” explains Kerten Hospitality CEO Marloes Knippenberg.
Colliers International says authentic local experiences are a crucial component of community-led hotels. “It requires engagement and involvement in the community and this in turn, solidifies the hotel’s place within its community,” the research company explains, noting how events and exhibitions involving local people and artists are becoming popular hotel initiatives.
Radisson Blu Hotel & Residences in Riyadh has taken this on board with the hotel displaying a collection of more than 1,000 traditional handicrafts from about 60 Saudi artisans. The Living Exhibition is the largest compilation of handmade Saudi crafts in the country.
Daring to be different has become a Radisson hallmark and the Nofa Resort Riyadh, the first Africanstyle resort in the kingdom, features 57 luxurious bungalows and villas overlooking Nofa Wildlife Park. The property, which resembles a safari lodge, gives elite guests the chance to experience African and Arabian wildlife on their doorstep, which is unique in Saudi Arabia.
Radisson has 20 more hotels planned for the kingdom with two new Park Inn properties opening this year – one in Jeddah and one in Riyadh – and a Mansard Riyadh, part of its Radisson Collection, opening in the capital by the end of 2020.
Radisson Collection properties promise one-of-a-kind spaces and a “unique character authentic to its locality”, such is the global lifestyle hotel trend.
LIFESTYLE NEEDS LEAD
The lifestyle space is on the radar for most, including Millennium Hotels & Resorts MEA, which believes there is strong potential for budget and midscale brands that focus on what today’s travellers really want – connectivity and technology.
Saudi Arabia is a case in point with the group’s CEO, Kevork Deldelian, highlighting the country has one of the highest smartphone penetrations globally at 76 per cent.
“We are therefore excited to bring the Studio M brand to Saudi Arabia in the near future – a three-star, budget boutique concept that offers guests functionality and affordability,” he says. “Studio M appeals to modern independent travellers, promising to provide ‘everything a guest requires for their stay and none of the things they don’t’.”
For similar reasons, the group recently signed its first Millennium Central property in the kingdom.
The Millennium Central Jeddah will be an urban four-star hotel with contemporary design, local influences an signature art.
“Another brand to watch in
Saudi Arabia will be Millennium
Place – it’s a happy, playful fourstar lifestyle brand inspired by childhood experiences and emotional connections,” adds Deldelian.
Millennium Hotels & Resorts MEA currently operates eight hotels in Saudi Arabia and has seven more in development. Unlike its competitors, which have focused on primary markets including Riyadh, Jeddah and the Holy Cities, the company is developing properties in secondary locations such as Jizan, Abha and Tabouk where the outlook for economic growth is strong.
While lifestyle hotel opportunities are aplenty, Saudi Arabia’s upscale and luxury markets have untapped potential too, says Deldelian, and new properties opening soon include the kingdom’s first Grand
Millennium in Tabouk.
THE HOLY CITIES ROOM RACE
Another fast-growing sector is religious tourism, with
Vision 2030 targeting 30 million Umrah visitors by that date. This calls for more accommodation in the Holy Cities of Makkah and Madinah and hotel groups have been quick to respond.
IHG is set to open one of the biggest hotels in the world in Makkah this year, with the five-star voco Makkah, located in the Maad
Hospitality Towers development, featuring some 4,200 rooms, six restaurants and a large meetings and events space.
It will follow the successful openings of IHG’s first two voco properties in Saudi Arabia: voco Riyadh opened in November with 22 meeting rooms, a large ballroom and multiple dining options and voco Al Khobar followed in December with 11 meeting spaces and extensive fitness and wellness facilities. Ideal for business travellers who value connectivity, all ‘vocos’ feature the latest in-room technology.
Not to be outdone in the Holy Cities, Marriott International recently signed an agreement to manage the substantial 2,600-room five-tower Fairfield by Marriott Makkah Al Naseem. When it opens in 2023, it will make its mark as the first Fairfield by Marriott property in the Middle East and Africa region.
While the big brands are making their presence felt, local players are jumping in with niche concepts that stand out from the crowd too.
Saudi Arabia’s Dur Hospitality, a hotel owner and operator in the kingdom for more than four decades,
The younger demographic will play a big factor in the development of coworking spaces
has witnessed significant success with its home-grown spiritual hospitality concept, Makarem Hotels, which specialises in serving guests visiting the two Holy Cities. The company recently signed management agreements for four new properties that will double its portfolio to 2,181 rooms. They include the 416-key Makarem Jabal Al Kaaba Hotel in Makkah, three properties spanning 1,365 rooms in Madinah’s Manakha Development and a 400-room fivestar hotel tower in partnership with the General Authority of Awqaf. This puts Makarem Hotels well on track to meet its 5,000-room target by 2023 as it meets growing demand for personalised spiritual experiences. At Makarem, the raft of complimentary services offered include a spiritual concierge, ensuring pilgrims enjoy a comfortable and memorable journey.
BUILDING COMMUNITIES
Mixed-use operator Kerten Hospitality, a somewhat maverick operator in Saudi Arabia where big-brand operators dominate, is on a mission to meet the kingdom’s enthusiasm for “new concepts that challenge market expectations and meet the ever-changing needs of the next-generation traveller”, says Knippenberg. She’s referring to the “travel-savvy generation whose lives are defined by technology, innovation, connectivity and the urge for instant, hyper-customised experiences”.
Boutique hotel properties will therefore come into their own in Saudi Arabia, she says, citing Kerten’s The House Hotel, offering authentic customised experiences, and its Cloud7 concept, an affordable midmarket brand focused on locality and culture, as good market fits.
The kingdom is also “hungry for new and innovative culinary offerings”, adds Knippenberg, highlighting the opportunity to integrate Kerten Hospitality’s marketstyle food souk concept into future mixed-use developments to test new ideas and incubate local talent.
Her ultimate goal is to create lifestyle destinations in key locations across Saudi Arabia, creating collaborative environments where people – both residents and travellers – can connect.
“It’s about bringing life into bricks and mortar,” says Knippenberg.
“These will be the places where we build real communities.”