Saudi lacks affordable hotel options, says Accor senior VP

Despite the high level of hotel investments being poured into Saudi Arabia and the United Arab Emirates, the sector’s supply of three and four-star options is still very limited, Olivier Granet, a senior vice president at the French hotel management firm Accor told Middle East Economic Digest (MEED).

His comments came on the sidelines of the Arabian Hotel Investment Conference in Dubai.

He described the Saudi domestic market as key focus area for the company’s expansion. 

Accor is planning to develop three and four-star hotels to fill this market gap. As part of this plan, it will launch a line of at least 15 budget Ibis hotels over the next three and four years in the kingdom.

According to MEED, 10.4 million domestic trips were made to Makkah in 2014, while 3.1 million trips were made to Riyadh.

Granet said the company remains bullish on the UAE as the country’s hospitality sector pushes ahead on its expansion plans ahead of Expo 2020.

Egypt has also shown potential as the market proves its resilience. Recent data from Colliers revealed that revenue per available room (RevPAR) in Cairo was up by 97 per cent in the first quarter of 2015, compared with the same period last year.

Accor is said to be opening an average of one hotel every month, and as of recently, has signed a contract every two weeks in the Middle East. 

Granet stressed his view that the region’s hospitality market remains an attractive investment for big name brands, but more recently, he said, it was family businesses which are looking to expand their investment portfolios into this space.