UAE's Rotana eyes opportunities in Saudi NEOM, Red Sea project

UAE’s hotel management company Rotana will open three new properties between the fourth quarter of 2018 and the second quarter of 2019 in Riyadh, Al Khobar and Dammam, a senior company executive told Argaam in an exclusive interview.

“The travel and tourism sector in the region, and Saudi Arabia, in particular, has been experiencing strong activity, and as a result, the hospitality sector has witnessed a strong momentum in the last nine months,” said Tom Stevens, area general manager for Saudi Arabia, Lebanon, Tanzania and Democratic Republic of Congo, Rotana.

The company expects NEOM and the Red Sea project to offer excellent opportunities to strengthen its presence in the Kingdom, he stated.

The full interview is below:

Q: What are your plans for Saudi Arabia in 2019?

A: Saudi Arabia is undergoing a major transformation as the Kingdom continues to pursue its ambitious future actively. As part of the efforts to diversify its economy, the country is increasingly focusing on developing the infrastructure and improving tourism credentials to attract domestic and foreign investments. The Kingdom has thus become a magnet for corporate and leisure travelers, and as a result, it has been experiencing significant demand for branded accommodation.

At Rotana, we have planned a new, elaborate stock to address the growing supply gap in the market. We have lined up three properties for the launch between the fourth quarter of 2018 and the second quarter of 2019. When it opens in Q4 2018, Centro Olaya in Riyadh will feature 156 rooms, while Centro Corniche in Al Khobar and Dana Rayhaan by Rotana in Dammam, which are scheduled to open in Q2 2019, will add 253 and 285 keys, respectively. This will bring our portfolio in the Kingdom to 2,141 keys across Dammam, Jeddah, Makkah and Riyadh.

Q: How many hotels and keys are you currently operating in Saudi Arabia?

A: Rotana has steadily grown its footprint in Saudi Arabia over the years and has five hotels currently under operation across three major cities. We have a portfolio of 1,447 hotel keys across Al Marwa Rayhaan by Rotana, Makkah, Rosh Rayhaan by Rotana and Centro Waha in capital Riyadh, and Centro Shaheen and Centro Salama in Jeddah.

Q: How have you performed in the first nine months of 2018 compared to the same period last year?

A: The robust expansion of our market footprint helped us to strengthen our position in the regional hospitality industry and enhance our international profile. We opened two properties in Saudi Arabia during the first three quarters of the year. Most recently in September, we launched Centro Salama, Jeddah, as the third hotel under the "Centro by Rotana" brand in the Kingdom.

Reflecting the ongoing recovery in the global economy and the rapid growth in emerging and developing markets, the travel and tourism sector in the region, and in Saudi Arabia in particular, has been experiencing strong activity, and as a result, the hospitality sector has witnessed a strong momentum in the last nine months. We have maintained positive occupancy rates since the beginning of the year.  

Q: What is your outlook on Saudi hospitality market?

A: Saudi Arabia has identified the tourism sector as a key enabler of economic growth in its National Transformation Program 2020 and Saudi Vision 2030. The Kingdom’s initiatives, including the $500 billion Red Sea coastline project, the relaxation of visa regulations and the recent reforms aimed at promoting the leisure and entertainment sector, are expected to accelerate the expansion of the tourism sector. With these prospects, the country’s hospitality market is projected to see a remarkable 13.5 percent compound annual growth rate (CAGR) by 2022, which in turn presents seamless opportunities for hotel operators.

Q: Do you think the upcoming tourist visas will be a gamechanger for the local hospitality market?

A: The recent reforms aimed at modernizing the country and empowering the private sector, including the Kingdom’s plans to issue tourism visa to travelers, have been widely hailed as the harbingers of a new Saudi Arabia. Undoubtedly, these will bring ground-breaking changes across industries, particularly in the hospitality sector.

Q: Are you planning to open or operate hotels in NEOM and Red Sea tourism projects?

A: With its thriving economy and booming tourism sector, the Kingdom has always been a key focus market for us. We believe that the initiatives such as NEOM and the Red Sea projects will offer us an excellent opportunity to deepen our presence in this fast-growing market.