Wednesday, February 28, 2024

Corporate, religious tourism boosts Saudi Q3 hospitality growth

Saudi Arabia’s hospitality has seen uniform improvements in its key performance indicators during the first nine months of the year, thanks mainly to the support from the corporate and business tourism, according to leading real estate expert CBRE.

 Over this period, the average occupancy rate increased by 5.9 percentage points, this was accompanied by a 18.4 percent increase in average daily rates (ADR) and a 31.2 percent jump in the average revenue per available room (RevPAR), it stated.

This strong level of performance has meant that these indicators now, in most cases, sit comfortably above their 2019 levels. 

In the year to date to September 2023 compared to the same period in 2019, CBRE said it has seen Saudi Arabia recording a 1.2 percentage points increase in average occupancy levels, in addition to a 9.6 percent jump in its ADR and a 11.8 percent spurt in its RevPAR.

At a city level too the growth was witnessed across the kingdom. In Jeddah, the average occupancy grew by 7.3 percentage points, while its ADR softened by 0.1 percent. This led Jeddah’s RevPAR to expand by 12.7 percent. 

Over this period, at Khobar in the kingdom’s Eastern Province, the average occupancy rate increased by 7.7 percentage points, while its ADR declined by 4.9 percent, which has resulted in an improvement of 9.0 percent in RevPAR. 

In Riyadh, the average occupancy saw a rise of 3.1 percentage points as ADR improved by 13.1 percent, culminating in a RevPAR growth of 19.1 percent in the capital. 

According to CBRE, both Makkah and Madinah performed consistently as they concluded the religious high seasons. 

Madinah’s average occupancy rate saw an expansion of 10.1 percentage points, with ADR marking a 38.1 percent upsurge, which resulted in RevPAR improving by 60.8 percent. 

As for Makkah, the average occupancy rate stood 5.9 percentage points higher, and its ADR rose by 27.2 percent year-on-year in the year to September 2023, leading to RevPAR recording a strong growth rate of 40.6 percent, it added.

Taimur Khan, Head of Research (Mena) said: “Corporate and religious tourism has significantly underpinned growth in Saudi Arabia’s hospitality key performance indicators in the year to September 2023, compared to a year earlier. Over this period, across the Kingdom, average occupancy rates are 5.9 percent higher, average daily rates sit 18.4 percent higher and the average revenue per available room sits a staggering 31.2 percent higher.”

“Over the remainder of the year, with the likes of the Riyadh and Jeddah Seasons events still to kick off, we expect that this strong performance will continue,” he added.

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