Saudi Arabia: Honing in on mid-market potential

Saudi Arabia

Throughout 2016, Saudi Arabia’s hospitality industry, which has been traditionally dominated by five-star hotels, will be focusing its efforts on the development of mid-market hotels.

A new report by TOPHOTELPROJECTS, which is commissioned by The Hotel Show Saudi Arabia 2016, reported that six out of the top 10 brands with the most development currently underway within the country are classed as mid-market.

This includes: Park Inn by Radisson (1,433 rooms); Hilton Garden Inn (1,155 rooms); Four Points by Sheraton (1,890 rooms); Aloft Hotels (627 rooms); Mercure (528 rooms); and Staybridge Suites (538 rooms).

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District director, The Rezidor Hotel Group Saudi Arabia (which is inaugurating two Park Inn by Radisson Hotels in Makkah by 2017), Basel Talal noted: “Saudi-Arabia is a key focus country for our group offering considerable growth potential and we are committed to the development of the Kingdom, which is underpinned by a genuine focus on economic diversification by the Government. We have a very ambitious growth plan in KSA, with a pipeline of 17 hotels and 3,780 rooms over the next five years.”

Also commenting on the mid-market shift was vice president of development, Hilton Worldwide MENA, Carlos Khneisser: “While the KSA traditionally boasts a luxury hospitality offering, we are now welcoming an increasingly diversified pool of guests from domestic and international markets – and it’s important that we evolve our proposition to match their mixed demands. This shift has seen the rise of mid-market hotel options, not only in the KSA but across the region. In Q4 2015, three Hilton Garden Inn hotels opened in Dubai – which joined two Hilton Garden Inn properties in Saudi Arabia, to attract a whole new segment of guests eager to experience the world-class destinations in this region at an affordable price.”

Meanwhile, adding to Saudi’s mid-market pipeline will be Accor’s four-star Novotel (450 rooms) and Adagio Aparthotel (77 rooms), and three-star Ibis & ibis Styles (463 rooms), which are scheduled for 2016 and 2017.
InterContinental Hotels Group’s (IHG) mid-market Holiday Inn brand has a great presence in Saudi Arabia, with 11 hotels currently open (2,281 rooms). In 2015, IHG opened two new Holiday Inn hotels, and also signed two new hotels including the world’s largest, Holiday Inn Makkah – Abraaj Al Tayseer.

At The Hotel Show Saudi Arabia 2016’s Vision Conference in May, CEO, Hospitality Management Holdings – HMH, Laurent Voivenel, will speak on ‘Tapping into mid-market opportunities’.

He said: “Continued development of leisure and commercial areas as well as massive investment in tourism infrastructure in key cities like Riyadh, Jeddah, Makkah and Madinah, is fuelling the demand for affordable accommodation. The mid-market segment is currently under-supplied, pushing the demand for quality serviced apartments as well as three- and four-star properties.

“The authorities are working on a long-term strategy focused on encouraging business travel as well as economic diversification that in turn will contribute to development of the hospitality sector, catering to all segments of the market. Given the growth in the domestic and international visitor numbers, only set to increase further with a more segmented offering, the future looks very promising for the hospitality industry in KSA, more so in the mid-market segment,” he concluded.