Saudi Arabia’s hospitality market can expect to witness high levels of new supply over the next three years as many of the previously delayed projects come to fruition, said a report.
This increase in supply is likely to increase vacancies and reduce revenue per available room (RevPAR), which currently stands at $162, moving up 2.5 per cent over the first two months of 2015, said a report published by JLL, a global real estate expert.
However, this impact may be muted by the continued delay of some announced projects.
DoubleTree by Hilton was the only hotel delivered during the first quarter of 2015 adding 196 keys and increasing the total stock to about 10,100 keys.
Major projects expected to be completed in 2015 include Hilton Riyadh Hotel & Residences and Movenpick Hotel in the central business district (CBD), the report said.
Riyadh’s hotel market also saw year-to-February occupancy rates remain stable at 64 per cent, with average daily rates (ADRs) improving marginally (up 2 per cent) compared to the same period last year.