More than 30,000 hotel rooms under development

Four Seasons Hotels and Resorts and Diriyah Gate Development Authority (DGDA) announced plans for Four Seasons Hotel Diriyah, Saudi Arabia earlier this year

A total of 32,621 hotel rooms are currently under construction in Saudi Arabia, as the kingdom prepares to meet pent-up demand from pilgrims returning to its holy cities. That’s according to the latest research from STR, commissioned by Arabian Travel Market (ATM) 2022.

The analysts found that the country’s revenue per available room (RevPAR) recovery index stands at 52 per cent, noting that the absence of millions of Muslim pilgrims has significantly impacted hotel performance in Saudi Arabia. Madinah and Makkah witnessed RevPAR rates of just 33 per cent and 24 per cent, respectively, in 2021.

Although significantly lower than pre-pandemic levels, KSA’s hotel performance registered year-on-year gains in 2021 and the sector’s recovery is expected to persist throughout the coming year, with pent-up demand driving further improvements as Covid-related restrictions continue to ease.

Danielle Curtis, Exhibition Director ME – Arabian Travel Market, said: “As was the case for markets the world over, the global pandemic had a major impact on Saudi Arabia’s hospitality sector. Even so, STR’s findings clearly point to an ongoing and sustained recovery, and we are looking forward to exploring the vast untapped potential of the kingdom’s burgeoning tourism sector at ATM 2022.”

Hotels in Al Khobar are currently outperforming those in Saudi Arabia’s other major cities, with RevPAR surpassing pre-pandemic levels in 2021. Riyadh, Dammam and Jeddah, meanwhile, recorded recovery index rates of 88 percent, 85 percent and 56 percent, respectively, last year.

In terms of outbound travel, research conducted by Colliers International shows that overseas journeys from the kingdom are set to grow to 6,075,000 in 2022, compared to an estimated 3,793,000 in 2021 and 4,839,000 in 2020. In the longer term, outbound tourist trips are expected to rise to 9,262,000 in 2025, although this figure would still be significantly lower than the peak of 19,751,000 recorded in 2019.

Outbound tourist expenditure is set to grow to SR32.656 billion ($8.7 billion) this year, compared to an estimated SR19.734 billion ($5.26 billion) in 2021 and SR21.969 billion ($5.86 billion) in 2020. Total expenditure is expected to increase to SR54.624 billion ($14.56 billion) in 2025.

Other takeaways from Colliers International’s analysis include the growth of travel related to ‘visiting friends and relatives’ (VFR) during the pandemic, which accounted for more than half of outbound trips (55 per cent) in 2020, compared to 39 percent in 2019; and an increase in the average trip length, rising from 15.4 days in 2019 to 19.2 days in 2020.

“While religious tourism will no doubt remain a mainstay for Saudi Arabia, the global travel community is also understandably excited about new prospects that are opening up thanks to the country’s growing investment in other segments,” added Curtis. “As its post-pandemic recovery continues to gather pace, ATM 2022 represents the ideal forum in which to discuss the countless opportunities offered by the kingdom’s ever-expanding tourism market.”