According to the latest THP data, at least 238 high end hotel projects are underway throughout the Middle Eastern nation, encompassing 81,713 keys.
Current figures represent a massive almost 200% pipeline expansion by site over the past 12 months, as when we last analysed Saudi developments in 2022, there were 80 projects of collectively 63,753 keys.
The main development hotspot is capital city Riyadh, with a minimum of 54 projects, while western metropolis Jeddah is runner-up with 37 sites, with nearby Makkah making the podium, on 22.
This rapid rise in high end hotels follows Saudi Arabia’s Ministry of Tourism extending its electronic tourist visa scheme to eight further countries: the Maldives, Uzbekistan, Azerbaijan, Kyrgyzstan, Tajikistan, Albania, Georgia, and South Africa.
The visa program launched in 2019 targeting 49 countries, which subsequently increased to 57. Last March, the Ministry of Tourism also allowed all Gulf Cooperation Council residents, regardless of vocation, to apply for tourist visas.
These steps are consistent with the nation’s tourism sector strategy and aspirations outlined in Saudi Vision 2030, which includes increasing the sector’s contribution to GDP from 3% to more than 10%, creating one million additional job opportunities with a preference for Saudi citizens, and attracting 100 million tourists by 2030.
The Ministry of Tourism intends to expand the tourist e-visa system to include other countries and regions, in line with the ongoing growth and enhancement of the country’s tourism infrastructure.
Looking at current THP records, the Saudi tourism targets are well on their way to being met by accommodation capacity. A peak of 65 deliveries are expected next year, with a pretty rapid rate maintained into 2025 and 2026, when 47 and 40 projects are due to be completed, respectively. A further 34 are slated by the end of this year, while the remaining 52 are either scheduled for further in the future or have yet to be designated a delivery date.
This productive schedule is reflected in the analysis of project phases, with 58% of the pipeline, equivalent to 139 sites, presently under construction, while another 23 are in pre-opening. Further back in the timeline, 39 high end hotels are at a planning stage with a further 36 in pre-planning and one in a vision phase.
There is a preference towards five star developments, with a 60/40% split in favour of luxury hotels within the upper segment Saudi pipeline. This works out as 143 five star properties versus 95 four star sites.
Newbuildings are far and away favoured by hotel investors in the country, with 95% of the high end pipeline encompassing greenfield sites, that’s 227 projects, as compared to just eight refurbishments and three conversions.
It looks to be a close fight between major hotel groups regarding jumping into new Saudi developments. THP records show that at least 32 Marriott International projects are ongoing, with Hilton Worldwide in close company on a minimum of 30 and Accor similarly near on at least 27.
Regarding individual brands, Hilton’s flagship Hilton Hotels & Resorts plus the luxury Four Seasons Hotels & Resorts line share the lead, with a minimum of seven sites planned for each. Nearly as numerous, sharing second spot with at least six properties apiece are Rotana Hotels & Resorts, IHG Hotels & Resorts’ Hotel Indigo and Hilton’s Doubletree by Hilton.
Amongst the manifold megaprojects taking shape in the Middle Eastern nation, we see Mukaab topping the list in terms of scale. Part of the New Murabba project which aims to develop the world’s largest modern downtown in Riyadh, Mukaab will house a huge 9,000 hotel rooms, though the developer, state-backed New Murabba Development Company, has not yet signed deals with any hotel brands. The project is due to be completed in 2030.
Meanwhile, the Amaala megadevelopment in Al Wajh, on the country’s north west coast, has announced the first brands which will start to form the planks of its 3,000 key provision. Developer Red Sea Global kicked off its deals with Clinique La Prairie Health Resort, which will offer 66 ultra-luxury suites and 13 branded residence villas when it opens in Q3 2024. Next up was an agreement for the 153-room and 24 branded residence Jayasom Wellness Resort, Amaala, due to open in Q2 2024. Rosewood Hotels & Resorts joined the fray with Rosewood Amaala, scheduled to deliver 135 keys in Q4 2025, and latterly Equinox Hotels is the first firm to have a presence in the Amaala Marina Village with Equinox Resort Amaala, a 128-key resort focusing on sports, fitness and lifestyle, which will arrive in 2026.