Riyadh – Mubasher: The average daily rate (ADR) levels in Saudi Arabia’s hospitality industry registered an increase of 9.5% during the first quarter (Q1) of 2021 compared to the same period last year, despite the slow recovery in occupancy rates, according to Colliers’ MENA Hotels Quarterly Review.
The Kingdom has launched ‘Tourism Shapers’ initiative in Q1-21 with the aim to increase involvement of private sector in tourism, by educating, enabling, and inspiring small and medium-sized enterprises (SMEs) to recognise the opportunities within the tourism sector.
Occupancies in Saudi Arabia ranged between 20% and 50% during Q1-21, with Makkah and Madinah markets witnessing the steepest declines of 64% and 48%, respectively, due to the strict measures imposed to curb the spread of COVID-19.
Hotels in Riyadh followed with a decrease of 20% in occupancy rate, while Jeddah saw the lowest rate with an annual decline of 1%.
As for the ADR levels in Q1-21, the Jeddah market registered the highest level with an increase of 19% compared to Q1-20.
Madinah and Riyadh meanwhile posted a decrease of 13% and 12%, respectively, in ADR during the first three months of 2021. Makkah followed with a drop of 7%.
The total branded keys, hotel supply, in the Kingdom reached 58,600 by the end of Q1-21, reflecting an annual increase of 9.4% compared to the same period a year ago. Hotels in Jeddah and Makkah recorded the highest growth in supply during Q1-21 with approximately 600 new keys.
“Supply in the Saudi market is expected to increase at a [compound annual growth rate] CAGR of 11% between 2021 and 2023, accounting for an additional 15,000 keys in the market,” according to Colliers.
The Saudi government announced that only people who were vaccinated could perform the pilgrimage this year.
The report showed that “The increase in domestic demand within the Kingdom has contributed to the recovery of hospitality demand post-pandemic.” The international demand is expected to increase as Saudi Arabia has resumed international travel in mid-May.
