Middle East Real Estate Predictions

We are pleased to launch the Middle East Real Estate Predictions: KSA Hospitality Market report on 21 October 2019 at the Crowne Plaza Riyadh RDC Hotel and Convention Center. The report examines the performance of the KSA hospitality market, the evolution of the tourism industry in KSA and a regional view on global trends. 

Report insights

The KSA hospitality market experienced a challenging year in 2019 compared to previous years. Increasing supply and competition continued to influence Average Daily Rates (ADR) and occupancy levels across key cities. Nevertheless, the development of Saudi Arabia’s government-led GIGA tourism projects will undoubtedly contribute to the growth and evolution of a unique tourism industry in the Kingdom. It is expected to create a number of economic spillover effects by retaining tourism spend in the Kingdom, generating employment opportunities and encouraging foreign investment.

There are a number of key hospitality global trends and disruptors that will also impact KSA and the wider region including an increased focus on data protection and cyber security and the use of Big Data and Artificial Intelligence (AI) and as such operators and investors will need to invest in these areas to maintain their respective market share.

Data protection and cyber security – existing cyber security frameworks are mostly responsive instead of proactive. The looming threat of cyber-attacks calls for new approaches. These new approaches should be able to prevent breaches, report in real time and leverage AI to build self-repairing functionalities.

Big data and AI – with the vast amount of data available in the hospitality and travel industries, early adopters have benefited from various applications of data mining and AI. From online chatbots to virtual assistants like Alexa and Siri, AI continues to be leveraged in new products and service delivery techniques.

The global cruise sector – the global cruise sector is currently one of the most dynamic sectors in the travel industry. The Middle East was the fourth fastest growing source region for the cruise sector in 2018 according to the CLIA. The developing port capacity in the region presents an excellent destination and departure points for European ships.

Consolidation of the hotel investment market – over the past five years the hotel industry globally witnessed major consolidation. However, reduced M&A activity is expected amongst large hotel brands as increased focus is placed on smaller emerging hotel brands. While the Middle East contributed approximately a third of outbound cross-border hotel investment funding in 2018, within the region, hotel investment is primarily focused on the development of new hotels and funded by regional capital.