KSA Hospitality Market has been saved
KSA Hospitality Market
An overview of 2020
We are pleased to announce the launch of our Kingdom of Saudi Arabia (KSA) Hospitality Market report which provides an overview of the hospitality market in 2020 and compares the performance on regional and global levels.
The COVID-19 crisis impacted the hospitality sector in an unprecedent manner resulting in falling performance metrics across all key cities in the Kingdom. Its recovery is dependent on the roll out of vaccines to restore traveller and guest confidence and will likely accelerate with the completion of some of the major announced leisure and entertainment projects.
- Business demand in Riyadh is likely to remain subdued as travel has been limited by many companies, therefore the incoming supply is expected to create further downward pressure on both occupancy and the Average Daily Rate. With the expectation of approximately 5,300 hotel keys entering the market between 2022 and 2025, the materialisation of Vision 2030 related projects and initiatives will be crucial to increase demand for the market to absorb this new supply.
- Around 2,700 hotel keys are expected to enter the Jeddah market in 2021 and 2,300 keys are planned to be delivered between 2022 and 2025. In the short term, hotels in Jeddah will have to leverage on the development of domestic tourism to mitigate the impact of these additional keys on performance. In the medium term, Jeddah’s hotel market recovery will be partially reliant on the recovery of Makkah’s religious tourism.
- Similar to Jeddah, there were no major hotel openings for Makkah in 2020, however, roughly 4,500 keys are expected to be delivered in 2021. While some hospitality projects have been postponed or cancelled in Makkah, there are still approximately 11,800 keys planned for delivery between 2022 and 2025.
- The impact of COVID-19 was less significant in Dammam/Al Khobar compared to other KSA cities. This is largely driven by an increase in domestic tourism which resulted in a marginal decrease in occupancy but a slight increase in the Average Daily Rate. Approximately 3,200 additional keys are expected to be delivered between 2021 and 2025.
If you would like to discuss the report in more detail, please reach out to Dunia