10 June 2009
Jeddah and Makkah have emerged among the biggest hotel markets in the Middle East, according to a latest report by business advisory firm Deloitte. This indicates a continued robust growth for the Saudi Arabian hospitality sector.
While Makkah hotels posted a 32.7 per cent growth in revenue per available room (RevPAR) in the first quarter of 2009, hotels in Jeddah saw an increase of 30.3 per cent in the same period to rank within the top three best-performing hotel markets in the region.
Meanwhile, Elaf Group, a business organisation serving the Saudi Arabian travel, tourism and hotel industries, said yesterday it would deliver a fresh supply of about 5,000 hotel rooms within the next three years with the launch of two hotels each in Makkah and Jeddah and one in Madinah.
The firm said about 982 hotel rooms will be available by the year-end. "We are fully committed to supporting the growth of the Kingdom's hospitality sector by delivering a fresh supply of hotels rooms to address the growing demand and open opportunities for further growth," said Ziyad bin Mahfouz, President, Elaf Group of Companies.
"The Kingdom remains a significant growth market and an important consolidating force in the region's hotel industry. Makkah and Jeddah particularly stand out as the top growth markets in the Middle East, having registered the best revenue rates per room in the entire region," he added.
In another report, Jones Lang LaSalle (JLL), a global player in the real estate and hospitality markets, said in its report yesterday that of all the real estate sectors in Jeddah, the city's hospitality market is expected to be the least affected by the economic slowdown. "Jeddah is the gateway for nearly four million Muslim visitors who travel to Makkah and Madinah every year, while Jeddah's seaside location makes it a prime leisure destination for Saudi nationals. Demand continues to rise and in Q4 2008, initial contracts were signed for the first phase of a $38 billion (Dh140bn) tourism master plan for the development of 19 resort destinations along the Red Sea coastline," JLL said.
It added the steady increase in the level of domestic tourism and the more rapid increase in business tourism suggest that Jeddah hotel market has the potential to achieve higher average room rates (ARRs) and RevPAR performance in the near future, despite the level of additional new supply entering the market.
Since 2003, the average occupancy in Jeddah hotels has increased by about two per cent per year, to touch approximately 73 per cent in 2008, JLL said. The occupancy rates were highest among five-star hotels in Q2 2009, it added.
According to the report, average occupancy rates vary between 65 per cent and 80 per cent during the high season, while average room rates rest between SR550 (Dh540) and SR1,000. And occupancy ranges between 50 per cent and 60 per cent during the low season, with ARRs fluctuating between SR400 and SR600.
There are currently just more than 3,600 quality hotel rooms in Jeddah, JLL?said. And there has been almost no new supply of four- and five-star hotels in Jeddah over the last decade until very recently.
"Five-star properties dominate the quality hotel segment as they represent 68 per cent of the quality hotel room supply," it said, and added that Rosewood Corniche, with 127 rooms, is the only five-star hotel to have entered the Jeddah market last year.
A number of large mixed-use developments with hotels have been announced across Jeddah, although their delivery dates are uncertain, said JLL report.
And with these additions, Jeddah's hotel room supply is estimated to rise to about "5,500 quality hotel rooms by 2014".
Jeddah and Makkah have emerged among the biggest hotel markets in the Middle East, according to a latest report by business advisory firm Deloitte. This indicates a continued robust growth for the Saudi Arabian hospitality sector.
While Makkah hotels posted a 32.7 per cent growth in revenue per available room (RevPAR) in the first quarter of 2009, hotels in Jeddah saw an increase of 30.3 per cent in the same period to rank within the top three best-performing hotel markets in the region.
Meanwhile, Elaf Group, a business organisation serving the Saudi Arabian travel, tourism and hotel industries, said yesterday it would deliver a fresh supply of about 5,000 hotel rooms within the next three years with the launch of two hotels each in Makkah and Jeddah and one in Madinah.
The firm said about 982 hotel rooms will be available by the year-end. "We are fully committed to supporting the growth of the Kingdom's hospitality sector by delivering a fresh supply of hotels rooms to address the growing demand and open opportunities for further growth," said Ziyad bin Mahfouz, President, Elaf Group of Companies.
"The Kingdom remains a significant growth market and an important consolidating force in the region's hotel industry. Makkah and Jeddah particularly stand out as the top growth markets in the Middle East, having registered the best revenue rates per room in the entire region," he added.
In another report, Jones Lang LaSalle (JLL), a global player in the real estate and hospitality markets, said in its report yesterday that of all the real estate sectors in Jeddah, the city's hospitality market is expected to be the least affected by the economic slowdown. "Jeddah is the gateway for nearly four million Muslim visitors who travel to Makkah and Madinah every year, while Jeddah's seaside location makes it a prime leisure destination for Saudi nationals. Demand continues to rise and in Q4 2008, initial contracts were signed for the first phase of a $38 billion (Dh140bn) tourism master plan for the development of 19 resort destinations along the Red Sea coastline," JLL said.
It added the steady increase in the level of domestic tourism and the more rapid increase in business tourism suggest that Jeddah hotel market has the potential to achieve higher average room rates (ARRs) and RevPAR performance in the near future, despite the level of additional new supply entering the market.
Since 2003, the average occupancy in Jeddah hotels has increased by about two per cent per year, to touch approximately 73 per cent in 2008, JLL said. The occupancy rates were highest among five-star hotels in Q2 2009, it added.
According to the report, average occupancy rates vary between 65 per cent and 80 per cent during the high season, while average room rates rest between SR550 (Dh540) and SR1,000. And occupancy ranges between 50 per cent and 60 per cent during the low season, with ARRs fluctuating between SR400 and SR600.
There are currently just more than 3,600 quality hotel rooms in Jeddah, JLL?said. And there has been almost no new supply of four- and five-star hotels in Jeddah over the last decade until very recently.
"Five-star properties dominate the quality hotel segment as they represent 68 per cent of the quality hotel room supply," it said, and added that Rosewood Corniche, with 127 rooms, is the only five-star hotel to have entered the Jeddah market last year.
A number of large mixed-use developments with hotels have been announced across Jeddah, although their delivery dates are uncertain, said JLL report.
And with these additions, Jeddah's hotel room supply is estimated to rise to about "5,500 quality hotel rooms by 2014".
By Staff Writer
© Emirates Business 24/7 2009
