AHIC to discuss KSA hotel investment
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Hotel investment opportunities in KSA will be one of the key topics discussed at the forthcoming Arabian Hotel Investment Conference (AHIC), which will be staged at Madinat Jumeirah, Dubai from 1-3 May.Delegates will talk about the opportunities for hotel owners and operators in the Kingdom, which is focusing on its tourism market as it seeks to diversify its industries.The Kingdom of Saudi Arabia is placing an increasing focus on developing its tourism market, in a targeted and structured manner, as it seeks to diversify away from oil. There is significant investment being undertaken in tourism infrastructure, including airport expansions and high-speed rail lines, as well as government financed training programmes and public-private partnerships, whilst visa procedures have been eased for non-religious and business visitors. Furthermore, being home to two of Islam’s holiest cities, Al Madinah and Makkah, which attract millions of Muslims each year for hajj, the hotel market is underpinned by Islamic tourism. There is also a high rate of domestic tourism, and the government has put in place initiatives to increase the number of Saudi’s that holiday within the Kingdom. This focus means that, according to a recent report by Business Monitor International, tourist arrivals to the Kingdom are forecast to grow by 5% year on year to 12.91 million in 2010, having remained steady in 2009, at just over 12 million. Year on year, arrivals per annum is expected to average 6.5% growth through to the end of 2014. A report in March 2009 by the World Travel & Tourism Council, forecast that in 2009 the travel and tourism sector was expected to generate US$27.2 billion (SAE 102.0 billion) of economic activity, equivalent to 7.2% of total Gross Domestic Product, and this is set to rise to 9.2% (SAE 293.4 billion or US$78.4 billion) by 2019. Direct industry employment was expected to rise from 7.3% of total employment in the Kingdom in 2009 to 9.4%, equating to around 922,000 jobs, by 2019. The potential is illustrated by government plans, announced in February 2010, to build a $13 billion ‘tourist city’ in Al-Oqair, just south of Al-Khobar on the Kingdom’s eastern coast, and on the Red Sea coast, the government has identified sites for development in Tabuk, Yanbu, Makkah, Asir and Jizan provinces. The SCTA has stated that the planned Red Sea resorts would lead to a total of 557,000 hotel rooms being brought online, creating 413,000 jobs in the process.A number of major international brands are already expanding their presence in Saudi Arabia. The Rezidor Hotel Group has already opened six hotels in the Kingdom, in Jeddah, Riyadh, Yanbu, Al Madinah and Al Khobar, totalling over 1,323 rooms, and has a further four hotels, with more than 1,000 combined rooms, under development, across three different locations. Kurt Ritter, President and CEO of The Rezidor Hotel Group, commented: “Saudi Arabia is a hugely important market for us, and in 2009 we were delighted to open a further two developments in the country. The key aspect for us is the diversity of the market, allowing us to introduce different brands into the Kingdom, which include Radisson Blu and Park Inn at the moment, with a particular focus on serving religious and cultural visitors. I have no doubt that the opportunities will keep growing, which is why we have a number of additional hotels in the pipeline.”One of the world’s largest hotel companies, Wyndham Hotel Group, is also expanding its presence in the region. In November 2009, the Hotel Group signed an agreement for the first Wyndham
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