SAUDI-based Abdul Latif Jameel Real Estate Investment Company has announced plans to launch a brand of Saudi-cultured hotels, with a flagship property expected to open in the second half of 2012.
Company chairman YOUSEF ABDUL LATIF JAMEEL, tells TTN about the growing opportunities for religious tourism in Saudi Arabia and the company’s plans for the kingdom.
What are your plans with the new hotel division? What will it be called and how do you plan to position the company in the market?
Abdul Latif Jameel Real Estate Investment Company (ALJREIC) started investing in creating the first Saudi hotel brand through a hotel management company that will manage the company’s owned properties in Makkah. The brand name will be announced very soon as we are still in the early stages of the branding process. Currently, the focus development destination of the company is the city of Makkah, a city with growing potential, especially with more than $100 billion invested in its development. ALJREIC’s hotel brand will be positioned based on the mid-scale full-service hotel tier.
The brand is fully Sharia-compliant and will reflect the generous Saudi/Hijazi hospitality contributing positively to the wellbeing of the Saudi community. Being a Saudi‐rooted company, we will aim to achieve the highest number of Saudi nationals in employment.
You’ve announced plans for 8,000 rooms with Phase 1. How much has been invested?
The complete project will be worth a couple of billion dollars; however it is still under design and there may be changes happening on the path of development as we go along to match with changing market needs.
When can we expect to see the first hotel open? What are your growth plans for the next five years?
We are in the process of completing our flagship pilot hotel to open with the beginning of the Holy Month of Ramadan 2012, located 50 m away from the Haram area. The plan is to build, open and operate a total of 8,000 hotel rooms in the span of five years.
How would you define a ‘Saudi-cultured hotel brand?’ Would this compare to what is known as a Sharia-based hotel?
A Saudi‐cultured hotel brand is of course based on the Sharia‐compliant hotel standards in all aspects. However it is not just that, we would like to base our new hotel brand on the Saudi culture standards and specifically, the Hijazi ones.
This would reflect genuine Arabian hospitality, professional service catering to the religious experience and convenient and comfortable accommodation and facilities.
This will be in addition to key icons of the Hijazi culture, reflected in the uniforms, architecture, gestures as well as food and beverage flavours.
With the massive hotel developments in KSA, are there concerns that demand will outstrip supply? Are you likely to expand outside of Saudi Arabia and the region?
The demand is increasing in the kingdom generally and for the religious experience in Makkah and Madinah specifically, where the number of visitors is expected to grow from 12 million in 2010 to 17 million by 2025.
The demand will continue to increase since the current numbers of religious visitors represent a very small percentage of the 1.8 billion Muslims around the world, which increases by 6.7 per cent annually.
Therefore, there is an urgent need for more hotel rooms, coupled with the expansion of Haram. Also, we are coming in with a full-service mid scale hotel brand tier, thus reflecting the simplicity and humility of Hajj.
We believe that there’s plenty of room in the market to develop such a tier and create a competitive edge. As for our expansion plans, our focus currently is on the city of Makkah and for the coming five years. Once we are established in Makkah, we will then study further expansion within and outside the kingdom.
Who will be your key source markets?
Given the nature of the holy city of Makkah, our key source markets are the 1.8 billion Muslims around the world. They mainly come from the Arab world and Muslim countries in Asia such as Indonesia and Malaysia.
Our products will cater for the religious experience, where we will have a special service called the Manasek Desk to assist guests with their religious rituals and provide them with convenient amenities to help them complete them in a hassle-free manner.
What is the current state of Saudi’s hospitality sector? How much has it changed over the years and what are the biggest challenges facing you today?
The Saudi hospitality sector is currently experiencing major growth in both supply and demand. Also, more and more luxury hotel brands are entering the market across all cities and this helps in elevating the tourism revenues and opens the competition in the market to encourage other hotel brand tiers, such as the mid-scale and budget hotel brands.
Also, according to a Business Monitor International forecast, there will be 319,000 hotel rooms in the kingdom by 2015, up from 218,000 hotel rooms in 2009, which is a major development that will boost the industry. Religious tourism is ‘recession-proof’ and as the Saudi Commission for Tourism & Antiquities mentioned, the $17.6 billion generated out of religious tourism in 2010 will double by 2015.
The major challenge facing us today is the tourism facilities infrastructure to serve this growing number of visitors. This is currently being addressed by the government where there are billions of dollars invested as we speak in improving airports, building new transportation means and roads.
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