Saudi hospitality revenue to grow by 7.5% in next 4 years: report  

Hospitality growth across the GCC is driven by economic expansion, increased tourist arrivals, and numerous mega meetings. Shutterstock
Short Url
Updated 12 June 2024
Follow

Saudi hospitality revenue to grow by 7.5% in next 4 years: report  

RIYADH: Saudi Arabia’s hospitality revenue is expected to see an compound annual growth rate of 7.5 percent from 2023 to 2028, propelled by government-led initiatives, according to new data. 

This growth, in line with the Gulf Cooperation Council average, is supported by various projects under the Kingdom’s Vision 2030 plan, as stated by UAE-based investment banking advisory firm Alpen Capital’s latest report. 

The report further noted that the UAE is poised to grow at a compound annual growth rate of 6.9 percent from 2023 to 2028. This growth will be driven by infrastructure modernization and easier tourist visa rules.  

Additionally, Qatar, Kuwait, Oman, and Bahrain are projected to experience even higher growth rates. 

Reflecting on Saudi Arabia’s hospitality industry, Sameena Ahmed, managing director at Alpen Capital, said: “Growth of the sector is expected to be spurred by economic recovery, thriving tourism and concerted efforts of the governments to reduce reliance on hydrocarbon revenues.”  

Alpen Capital’s report forecasts the GCC hospitality sector’s revenue to grow at a CAGR of 7.5 percent from 2023 to 2028, reaching approximately $48.1 billion by 2028.  

This growth is driven by economic expansion, increased tourist arrivals, and numerous mega meetings, as well as incentives, conferences, and exhibitions coupled with sporting events in the region.   

Additionally, the sector’s key operating metrics — occupancy rate, average daily rate, and revenue per available room — are expected to improve over the next five years. 

The occupancy rate is forecasted to increase from 64.6 percent in 2023 to 69.3 percent in 2028, while ADR is expected to grow at a CAGR of 1.9 percent. Additionally, RevPAR is forecasted to experience a CAGR of 3.3 percent over the same period. 

“The GCC is solidifying its global tourism footprint through successful hosting of major MICE, cultural and sporting events. Anticipated to attract millions of tourists, these events are poised to bolster the growth of the hospitality industry,” the report added.  

It further stated that the region has implemented several liberalized measures to boost tourist inflow, such as unified GCC visas, Dubai’s five-year multiple-entry visa, and Saudi Arabia’s instant e-visa options.  

Investments in transport infrastructure, including new airports, expansions of existing aviation facilities, and a regional rail network, are also expected to support tourism activity and increase demand for hospitality services.  

However, the sector faces challenges from global economic uncertainties and geopolitical conflicts, the report highlighted.   

Inflation and monetary policies may reduce consumer confidence, leading to decreased spending on international travel. Additionally, a shortage of skilled workers presents a significant hurdle, affecting the ability to recruit and retain trained professionals.  

Alpen Capital further emphasized the sector’s embracing of digitalization, with operators leveraging technologies like artificial intelligence, machine learning, cloud platforms, and mobile apps to personalize experiences and enhance customer engagement.   

The region is also adopting eco-friendly practices and conservation initiatives to meet the demand for responsible travel. Cultural, health, and wellness tourism are rapidly growing, reflecting shifting consumer preferences and a commitment to environmental conservation.  

“A rising trend toward sustainable tourism and responsible travel is gaining ground across the GCC’s hospitality sector due to increasing ecological awareness among consumers worldwide,” said Sanjay Bhatia, managing director at Alpen Capital.    

“Despite market competition and geopolitical uncertainties, the industry continues to strategically enhance visitor experiences and stimulate demand through innovation and consolidation. We expect to witness healthy domestic and cross-border M&A activity, as the sector advances to respond to the rising demand for accommodation and hospitality services,” he added.   

Furthermore, global property giant Knight Frank anticipates that Saudi Arabia is gearing up to expand its hospitality sector by developing 320,000 new hotel rooms by 2030.  

In a report released in April, the consultancy firm disclosed that as much as 67 percent of the planned hotel room supply in the Kingdom would fall in the “upscale” or “luxury” categories, referring to 4-star and 5-star accommodations, respectively.     

This move aims to cater to the projected surge in tourism, with 150 million domestic and international tourists expected by 2030.    

“With a target of welcoming 150 million visitors by 2030 — a 50 percent increase from its previous goal — the government is actively exploring various strategies to attract to international travelers,” Turab Saleem, partner and head of hospitality at Tourism and Leisure Advisory in Middle East and Africa at Knight Frank, said at that time.    

Saleem noted that this includes the development of cultural and entertainment offerings nationwide, which complement existing attractions like the Jeddah F1 Grand Prix and numerous entertainment seasons.    

“Noteworthy additions include theme parks such as Boulevard World in Riyadh, alongside the licensing of 24 additional theme parks by the Saudi General Entertainment Authority over the past year,” he added.  

The consultancy’s analysis further revealed that Accor Hotel Group will slip from first to second largest hotel room operator in the country with an estimated 25,400 keys under management by 2030.   

Meanwhile, Marriott International will likely emerge as the most prominent hotel operator in the Kingdom, with around 26,200 hotel keys under management by 2030, Knight Frank disclosed.   

Furthermore, Riyadh’s winning bid to host the 2030 World Expo is projected to pump a significant economic boost of $94.6 billion into the nation’s capital, with an estimated 40 million visitors expected during the six-month-long exhibition.  

Consequently, this underscores the need to provide adequate accommodation for hotel staff. 

According to the World Trade Organization, 4-5-star hotels, on average, require one to two staff per room.   

This suggests somewhere between 232,000 and 387,000 key workers could require accommodation in this segment of the Kingdom’s hospitality market. 


Closing Bell: Saudi main index closes in red at 11,213 

Updated 14 July 2025
Follow

Closing Bell: Saudi main index closes in red at 11,213 

RIYADH: Saudi Arabia’s Tadawul All Share Index closed lower on Monday, falling 39.31 points, or 0.35 percent, to end the day at 11,213.59.

The total trading turnover on the benchmark index reached SR4.54 billion ($1.21 billion), with 60 stocks advancing and 190 declining.  

The MSCI Tadawul 30 Index also retreated, shedding 5.46 points, or 0.38 percent, to close at 1,436.97. 

The Kingdom’s parallel market Nomu declined by 80.73 points, or 0.29 percent, closing at 27,356.89. Of the listed stocks, 22 advanced while 56 retreated.  

The best-performing stock was Alistithmar AREIC Diversified REIT Fund, with its share price rising by 9.91 percent to SR9.43. 

Other top performers included Saudi Industrial Investment Group, which saw its share price rise by 4.56 percent to SR17.42, and Al Hassan Ghazi Ibrahim Shaker Co., which saw a 4.48 percent increase to SR29.40. 

On the downside, Emaar The Economic City posted the steepest drop of the day, falling 4.12 percent to SR13.73.  

Naseej International Trading Co. fell 4.03 percent to SR102.50, and MBC Group Co. dropped 3.79 percent to SR34.02. 

On the announcements front, Jarir Marketing Co. reported estimated net profits of SR197.2 million for the first half of 2025, marking a 15.2 percent increase from the same period last year. 

In a statement on Tadawul, the company attributed the estimated increase to a 4.5 percent rise in gross profit, driven by higher sales of after-sales services along with improved profit margins and an increase in other income. 

Jarir’s shares gained 1.27 percent, closing at SR12.79.

Advanced Petrochemical Co. also announced its estimated financial results for the same period. The firm’s net profits were estimated to reach SR82 million, up by 95.2 percent from the same period last year. 

The company said that the increase was driven by an 8 percent rise in net revenues, lower propane and purchased propylene prices. 

Advanced Petrochemical Co. also announced the completion of construction and successful operational launch of its Propane Dehydrogenation plant, capable of producing 843,000 tonnes of propylene annually, along with two PolyPropylene plants operated by Advanced Polyolefins Industry Co. with a combined capacity of 800,000 tonnes per year. 

The facilities, located in Jubail Industrial City, mark a significant milestone in the company’s expansion in the petrochemical sector, according to a statement. 

APOC, a joint venture between Advanced Global Investment Co. and SK Gas Petrochemical Pte., will begin contributing to Advanced Petrochemical Co.’s consolidated financial results starting in the third quarter of 2025. 

Advanced Petrochemical shares closed 0.32 percent higher at SR31.48. 


Italian firm Webuild secures $600m contract as Diriyah project gains pace

Updated 14 July 2025
Follow

Italian firm Webuild secures $600m contract as Diriyah project gains pace

JEDDAH: Saudi Arabia’s Diriyah Square project has awarded a $600 million contract to Italian construction firm Webuild, marking a major step forward for the Kingdom’s heritage-driven development.

The contract, awarded to a subsidiary of the Italian group — Salini Saudi Arabia — covers the construction of 70 buildings and public spaces within the mixed-use development, which forms part of the broader Diriyah master plan. 

With this latest award, Webuild’s total involvement in the sit, known as the City of Earth, now stands at roughly $2 billion, the company said in a statement. 

Diriyah Square is a central component of Diriyah Co.’s strategy to transform the historic district into a commercial, residential, and cultural hub. 

The project is one of five giga-projects backed by Saudi Arabia’s Public Investment Fund, aimed at reshaping the Kingdom’s economy and tourism offering under the Vision 2030 plan. 

Diriyah will contribute approximately SR70 billion ($18.6 billion) directly to the Kingdom’s gross domestic product, create nearly 180,000 jobs and will be home to an estimated 100,000 people. 

Diriyah Co.’s group CEO Jerry Inzerillo said: “Diriyah Square is one of our most exciting, anticipated and prestigious districts, and we are extremely pleased to have signed with Salini to deliver it, bringing their immense global experience to the table.”

He added that this marks another important milestone in their development journey, paving the way for Diriyah Square’s retail spaces to welcome a diverse range of visitors — from nearby residential communities and surrounding office hubs to the millions who visit each year.

The contract covers Package 3 Finishing and mechanical, electrical, and plumbing, delivering a pedestrian-friendly environment in traditional Najdi style across 365,000 sq. meters. Webuild is also working on the 10,500-space underground parking facility, awarded in 2022 and currently 55 percent complete, alongside structural packages 3, 6, and 7. 

According to Diriyah Co., the project aims to create a retail district showcasing 400 brands across retail, leisure, and dining.  

In a statement released by Webuild, CEO Pietro Salini said: “We are proud to be able to contribute to a project of such symbolic and strategic value for Saudi Arabia. Our presence in the Kingdom will be further strengthened by work that will have a positive impact on the area as well as the local community.” 

He added that the company has operated in Saudi Arabia since 1966 and has completed more than 90 projects.

“We continue to support the country to develop some of the most challenging infrastructure projects in the world, especially in sectors such as civil buildings, sustainable mobility, and desalination,” Salini said. 


BYD plans major Saudi expansion following Tesla’s market entry

Updated 14 July 2025
Follow

BYD plans major Saudi expansion following Tesla’s market entry

RIYADH: Chinese electric vehicle giant BYD Co. is aiming to triple its presence in Saudi Arabia after Tesla Inc.’s recent market entry, the firm’s managing director for the Kingdom has announced.

Currently operating three showrooms, BYD plans to expand to 10 locations by late 2026, according to Jerome Saigot. 

The expansion comes after Tesla entered the Saudi market in April with a Riyadh showroom, joining BYD and fellow Chinese firm Geely.

The development aligns with Saudi Arabia’s broader strategy to establish itself as a regional EV hub, targeting 30 percent EV adoption by 2030 as part of its Vision 2030 economic diversification plan.

“Saudi is a complex market. You need to go fast. You need to think big,” Saigot said in an interview with Bloomberg, adding: “We are not here to stay at 5 (thousand) or 10,000 cars a year.” 

Saudi Arabia’s Public Investment Fund has been aggressively investing in the EV sector, backing Lucid Motors, launching its brand, Ceer, and supporting charging infrastructure development. 

However, EVs still account for just over 1 percent of total car sales, as high costs, limited charging infrastructure, and extreme weather remain challenges, Bloomberg reported, citing data from PwC.

Saigot told Bloomberg that Tesla’s presence in the Kingdom was a positive development, helping to boost consumer awareness of EVs.

“The more Tesla communicates on marketing, the better it is for us,” said Saigot, who started at BYD in April after serving in previous roles at Nissan Motor Co. and Great Wall Motor Co.

BYD has been closing the gap with Tesla globally, outselling the US automaker in Europe for the first time in April. 

The Kingdom’s push toward electric mobility is gaining momentum, with Tesla’s recent market entry seen as a potential catalyst for faster adoption. Alessandro Tricamo, partner at Oliver Wyman, told Arab News in an interview earlier this month that nearly half of Saudis are now considering an EV purchase. 

“Tesla’s entry into the Saudi market is potentially a significant win-win situation,” he said, pointing to the brand’s appeal in a car-centric market and the company’s need to expand beyond declining Western sales. 

Also in an interview earlier this month, Taline Vahanian of Marsh UAE warned of risks for the sector, including battery degradation in extreme heat and costly insurance premiums, which could slow adoption.


Saudi PIF rises to 4th among sovereign wealth funds as assets surpass $1tn 

Updated 14 July 2025
Follow

Saudi PIF rises to 4th among sovereign wealth funds as assets surpass $1tn 

RIYADH: Saudi Arabia’s Public Investment Fund has rise one place to 4th globally among sovereign wealth bodies, with assets surpassing $1 trillion, according to Global SWF’s July rankings.

PIF now ranks behind only Norway’s Government Pension Fund Global and two Chinese entities — the State Administration of Foreign Exchange and the China Investment Corporation — and surpasses the Abu Dhabi Investment Authority and the Kuwait Investment Authority.

The new ranking underscores PIF’s growing influence in global capital markets. 

Crown Prince Mohammed bin Salman has mandated the fund to grow its assets to $2 trillion by 2030, while generating long-term returns and supporting economic diversification. 

PIF’s assets under management climbed to $1.15 trillion in 2024, up from approximately $925 billion the previous year. However, net profit declined during the period due to rising operational costs, interest expenses, and asset write-downs linked to project delays and revisions, according to Global SWF. 

In response, the fund has shifted its strategy and is now prioritizing liquidity through short-term sukuk and commercial paper, while focusing on scalable, revenue-generating assets over high-cost mega-projects. This repositioning also includes increased investments in AI infrastructure, ETF platforms, and co-investments with global asset managers. 

Underscoring its international ambitions, PIF has invested about $200 million in a prime Manhattan real estate project with Related Companies, Bloomberg reported in July.

The fund plans to acquire a two-thirds stake in the 625 Madison Avenue site, where a 1,200-foot tower is under consideration, just steps from Central Park. 

The move builds on PIF’s earlier ties with Related, including a 2020 debt investment, and reflects its appetite for high-profile, long-horizon real estate in strategic global cities. 

Internationally, the fund holds stakes in prominent companies such as Lucid Motors, Nintendo, Uber, and BlackRock, and remains active across sectors including technology, mobility, and renewable energy, as well as gaming and sports. 

According to Global SWF, PIF is moving away from a strategy centered on rapid capital deployment, toward a more disciplined approach focused on financial sustainability, cost control, and delivering measurable returns. 


Egypt approves largest economic support package for SMEs worth $100.8m

Updated 14 July 2025
Follow

Egypt approves largest economic support package for SMEs worth $100.8m

RIYADH: Entrepreneurs in Egypt’s priority sectors will soon gain access to affordable financing, as the 2025/2026 state budget earmarks 5 billion Egyptian pounds ($100.8 million) to support micro, small, and medium-sized enterprises.

This partnership between the North African country’s Ministry of Finance and the Micro, Small, and Medium Enterprises Development Agency, which accounts for the largest economic support in the new budget, represents a significant step in bolstering the private sector and productive industries, according to a statement.

This move supports financial policies that boost private sector activity and promote entrepreneurship, aiming for financial sustainability while enhancing MSMEDA’s contribution to business growth nationwide.

It also aligns with recent data showing that startups across the Middle East and North Africa raised $289 million through 44 deals in May, a 25 percent increase from April and a 2 percent rise year-on-year. Egypt led regional fundraising with $125 million, driven by Nawy’s $75 million round alongside seven other deals totaling $50 million.

The newly released ministry statement said the money “will contribute to providing easy financing for young entrepreneurs, targeting priority sectors more closely.”

It added: “This comes as part of a new phase of strong and effective cooperation with the agency, aiming to achieve financial sustainability for the agency to drive economic growth.”

The statement further revealed that Egypt’s Finance Minister Ahmed Kouchouk noted that an initial agreement with MSMEDA has been reached to fund initiatives that support tax relief beneficiaries, promote entrepreneurship, and boost local manufacturing, as well as empower low-income households and advance export-focused projects.

Kouchouk added that this fiscal year, the initial group of businesses enrolling in the simplified and unified tax system would receive access to preferential, low-cost financing.

Basel Rahmi, CEO of MSMEDA, commended the Ministry of Finance’s efforts to back emerging businesses and boost private-sector expansion.

Rahmi praised the minister’s proactive vision, noting it would open doors for empowering young entrepreneurs economically.

In June, a statement issued by the Ministerial Group for Entrepreneurship indicated that Egypt’s startup ecosystem saw notable progress in securing venture capital and debt financing in the first five months of the year, with tracked deals totaling $228 million since January.

The statement further revealed at the time that 16 deals were completed between January and May, with 11 of them publicly disclosing investments amounting to $156 million. These investments represented a 130 percent rise compared to the volume during the same period last year.