Saudi Arabia’s hospitality market is expected to grow at a compound annual growth rate (CAGR) of 6.5 percent between 2017 and 2022 to $21.3 billion, mainly driven by religious tourism, Alpen Capital said in a recent report.
The Kingdom's international tourist arrivals are slated to grow at a 5-year CAGR of 2.8 percent to 21.8 million in 2022, while expansion in the hospitality sector will grow at a CAGR of 2.5 percent to reach 541,000 rooms by then.
Average daily rate (ADR) is likely to grow at a 5-year CAGR of 1.3 percent to $166 by 2022, whereas the revenue per available room (RevPAR) is estimated to increase at a 5-year CAGR of 3.8 percent to $110 by the same period, the consultancy added.
Saudi Arabia’s Vision 2030 aims to broaden its tourism to include domestic and international leisure tourism apart from the religious tourism.
A total of 27,281 rooms are expected to open this year, with the Kingdom having 64,000 hotel rooms under construction as of February 2018.
Meanwhile, GCC hospitality sector revenue is expected to reach $32.5 billion by 2022, growing at a CAGR of 7.2 percent.
The increase in revenue is expected to be primarily driven by mega-events such as Dubai’s World Expo 2020 and government initiatives to boost tourism.
According to Alpen Capital, the growth in the hospitality sector revenue of individual GCC countries is expected to range from 6 percent to 12 percent.
Bahrain is expected to outperform the GCC average backed by government-led initiatives and leisure segment driving the hospitality sector growth.
The UAE is expected to continue to grow above the GCC average on account of its attractive leisure and business tourism segment along with the World Expo 2020 which is expected to attract over 20 million tourist arrivals, the consultancy noted.
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