Prince Sultan bin Salman: Kingdom is witnessing an unprecedented shift in the size and diversity of hotel investments

SCTA President: Kingdom is witnessing an unprecedented shift in the size and diversity of hotel investments
His Royal Highness Prince Sultan bin Salman bin Abdul Aziz, President of SCTA pointed out that, the Kingdom of Saudi Arabia is witnessing an unprecedented shift in the size and diversity of hotel investments, especially in the light of the entry of many international brands to the Saudi market, whether for the first time or as an expansion to their previous presence. 

HRH President of SCTA made his comments while attending a media interview after receiving the "Leadership Award" from the Arabian Hotel Investment Conference (AHIC-2014) in the presence of Sheikh Ahmed bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority. 

HRH President of SCTA during the interview referred to the Kingdom's growing economic importance and its weight as a key player in the global economy. 

"Kingdom of Saudi Arabia has a strong economy, first thanks be to Allah, then to the stability, the farsightedness of our leaders and balanced economic and financial management which is overseen by the Custodian of the Two Holy Mosques King Abdullah bin Abdul Aziz (may Allah protect him) as King Abdullah knows the history and heritage of the Kingdom too well and urges persistently to preserved and taken care of," added HRH. 

"This year has seen the launch of real work of SCTA after the issuance of several resolutions by the government, the most important of which are the Tourism Regulation, The approval of King Abdullah Project for Care for the Cultural Heritage of the Kingdom, in addition to the resolution to provide the financial and administrative support to SCTA to enable it to carry out its mandate, and now we are looking forward to the resolutions that compliment these to support and regulate the sector. The financial programs are about to be developed in collaboration with the Ministry of Finance." HRH said. 

Prince Sultan bin Salman continued: “SCTA devotes all its activities and efforts for the interest of the domestic tourist, and it mainly focuses on the citizen as the main target of all of its plans, activities and programs. The Kingdom of Saudi Arabia was never been closed; rather it is being visited by millions of people each year including the Haj and Umrah seekers. SCTA has just begun the implementation of "After Umrah tourism" program which allows Umrah seekers to join a month long tour program in coordination with the Ministries of Haj, Interior and Foreign Affairs. The program also allows the visitors to attend the conferences and exhibitions held in the Kingdom."

HRH President of SCTA considered Dubai’s expertise in the fields of tourism and hotels as an important one as it has proved that dreams can be made true, adding, "In the Kingdom our dreams are as big as our country’s size, besides its outstanding stature and its weight in the region in light of its natural, cultural and environmental diversity, also our dreams are as big as the distinction of our fellow citizens and their love towards their homeland, and I can add that they surpass other nations in their passion towards their homeland."

"I am receiving this award on behalf of a large number of citizens, investors, officials including the governors and ministers who were very helpful and collaborative in the huge project of development of accommodation sector in the Kingdom. And also I receive it on behalf of the users of hotel facilities, which, most of whom are Saudis who contributed to the development of this sector through demanding insistently for higher quality services in this sector." 

The new regulation, that has been applied by SCTA on the sector has greatly contributed to the growth of hotel investments in the Kingdom and has led to the entry of a large number of international hotel companies to the Saudi market after SCTA had developed the sector, classified it and stimulated investment into it, monitoring it and ensuring justice in it for both the consumer and the investor.  

"Aside from the growth in the hotel investments across the different parts of the Kingdom, we plan to create the integrated tourism destinations, that will include different types of tourist inns (resorts, different classes of hotels, serviced apartments, environmental inns, desert camps, and rural and agricultural inns) to be established throughout the Kingdom within a number of sites such as Al Ogair, Al Ula, Fursan, Hail, Al Thumama, Al Qaseem, Al Dariyah, Al Laith, Asir, and the like.” 

HRH President of SCTA also disclosed that SCTA is working on the development of a number of tourism destinations, including the Al Ogair Tourism Development Project which will cost to the Kingdom around 17 billion Saudi riyals. The first phase of the project includes the establishment of 1364 hotel rooms with the cost of SR 900 million, in addition to Souk Okaz project in Taif, and for establishing huge resorts along the Red Sea coast, then the Al Hada and Al Shafa's projects in the Taif region. 

"SCTA from the very beginning has been working to bring about a quantum leap in the tourism accommodation sector, and this journey was never that easy, or did not begin with the shift of sector's authority from the Ministry of Commerce to SCTA in 2009, which happened through a transition period of three years.  In fact SCTA preceded this step by submitting an integrated developmental program in 2007 before the sector was handed over, which resulted in the entry of a large number of international brands to the Saudi market after the setting up of necessary regulations and applying the required standards and ensuring the justice and equity in the Saudi market." 

The efforts made by the Commission in its attempts to develop this sector included the developing and setting up of the licensing criteria and conditions, developing new classification system for hotel and furnished apartments, setting and applying new quotation policy conforming to the degrees of classification in a manner that prompts investment in this sector and re-evaluates all tourism accommodation facilities, numbering about 4000 according to the new classification, in addition to the setting up of special criteria for the classification of other types of tourism accommodations, such as hotel apartments, hotel villas, resorts, tourism inns, motels and rural inns. 

HRH President of SCTA said that the Authority works in accordance with the directives of the State for taking into account the interest of both the consumer and the investor, and work in close partnership with the investor in order to provide the required service to the citizen with real prices reflecting the level of provided services, and also working for boosting the investor business, rising the supply of hotels in different classes, supporting at the same time the user's rights to receive high quality services with moderate prices. 

HRH added that, the Kingdom is expected to see huge growth in the accommodation facilities after the announcement of the tourism finance program soon, which will result in the expansion in accommodation projects. 

"Our challenge today is to finance the tourism facilities and the most important of them are the tourism accommodation  facilities. The tourism accommodation sector in the Kingdom has witnessed a rapid growth in the investments during the past decade, and is expected to keep its steady growth on in the near future. 

“The number of tourist accommodation facilities in the Kingdom (hotels, furnished apartments, serviced villas, hotel apartments, tourism inns, roadside hotels, and resorts) has reached 3710 until March, 2014, of which 1222 are hotels, 2488 are furnished apartments, while the hotel rooms number has reached 299,500, and the rooms in furnished apartments are 87,080. Over 77% of hotel investments in the Kingdom exist in Makkah and Al Madina holy cities,” disclosed HRH.

HRH President of SCTA expected the Kingdom to witness a huge quantum leap in the hotel facilities and projects during the next two years in light of the development witnessed by the Saudi cities and annual growth of the domestic tourism, indicating that, by 2020 a large number of hotels in different classes will be built with a volume of investments estimated at SR 143.9 billion, by the international hotel brands providing high quality services.

“These projects come in response to the increased demand on the tourism activity in general and the accommodation sector in particular in different cities in the Kingdom, and is expressed in the higher figures in the rates of occupancy in hotels in the Kingdom of Saudi Arabia.” 

HRH emphasized that, the national tourism is considered a key track for creating job opportunities for the citizens, especially in the accommodation sector. 

"The total number of Saudis who have been employed in the tourism sector by the end of 2013 were 203,484, representing 27.1% of the total work force in direct jobs category. Besides the number of Saudi and non-Saudis employed in this sector by the end of 2012 has reached over 1 million and 126 thousand in direct and indirect jobs and is expected to exceed in 2020 to over and above a million and 773 thousand." 

"The State’s attention to the convention and exhibition sector comes in the light of its powerful economic role and its notable dependence on the accommodation facilities, where its growth is always raising the demand on hotel services and contributing to the finding of new markets in other regions, besides increasing the tourism activity beyond the usual seasons. The State has undertaken the development of convention and exhibition sector, and for this purpose it has created the National Convention and Exhibition Program as an umbrella under which the sector is organized and developed.”

HRH President of SCTA also shed light on the quantitative accommodation facilities which have been adopted by SCTA such as the heritage villages, desert camps and rural inns, saying that it is considered as an additional initiative by SCTA aiming at providing more new investment opportunities and help in introduction of investors' services precisely, that will provide tourists with a variety of options.

Prince Sultan bin Salman considered SCTA's efforts in collaboration with Saudi universities and the Technical and Vocational Training Corporation (TVTC) in the establishment of Tourism and Hotel colleges as the most significant that remarkably contributed to the development of hotel sector in the Kingdom through conducting essential training courses to qualify the Saudi youth to join the sector jobs. 

Joint cooperation with TVTC in the establishment of four hotel and tourism colleges in Riyadh, Al Madina, Taif, and Al Ahsa, in addition to a number of new projects for the establishment of colleges for tourism professions in the Kingdom in partnership with international universities is underway, as 8 of these colleges, which include technical and management specializations, were already opened in Riyadh, Makkah, Al Madina, Taif, Jeddah, Al Ahsa and Najran. Each college is expected to turn out graduates to the tune of 2000 annually.  

HRH President of SCTA further stated that, accommodation sector will be one of the key factors of the national economy for providing tourism integrated experience to the domestic tourist who is the major target of SCTA's programs and activities. SCTA has made great efforts in order to make accommodation facilities a key factor for the integrated tourism experience beside tour operators, tourist guides and the event operators.

HRH President of SCTA then shed light on the program of comprehensive rehabilitation of operators and owners of furnished apartments, which SCTA has made it a mandatory condition to the investors for obtaining operation license to run them. It aims to qualify the investors and the operators of these projects to ensure a steady and sustainable operation of their facilities and inform them on the opportunities and rules related to their activity instead of giving them the licenses and let them face the difficulties for launching such a business without being equipped with the required skills and experience in the field. 

HRH President of SCTA also disclosed that, SCTA conducts a survey to detect the requirements of hotel expansion across the provinces during the next five years taking into account the estimation of sector's flows and identifying obstacles that may face the sector investors. 

"In the next period, in light of the support given to the tourism by the government and the interaction of the private sector and the increased demand and acceptance by Saudi citizens to tourism, we are expecting the issuance of a number of important additional resolutions by the government that are expected to lead to a comprehensive and integrated development in the tourism related projects as well as in developing the mechanisms of finance and governmental support to tourism investments, including the hotel sector investments and expansion.” 

Worth mentioning, HRH President of SCTA had received the "Leadership Award" from the Arabian Hotel Investment Conference (AHIC-2014) in recognition of his persistent efforts in the development of tourism sector and the hospitality investments in the Kingdom of Saudi Arabia. 

The award ceremony was attended by Sheikh Ahmed bin Saeed Al Maktoum, the President of Dubai Civil Aviation Authority.

In a press statement issued by the organizing committee of AHIC-2014 in Dubai, the committee stated that, the "Leadership Award" was granted to HRH President of SCTA in recognition of his persistent efforts in the development of tourism sector in the Kingdom as well as his initiatives in response of the increased demand on the tourism sector in the Kingdom, and his efforts in supporting, enhancing and attracting hotel investments in the Kingdom and creating "After Umrah Tourism" program which allows Umrah seekers to tour in the Kingdom with the possibility of extending their visas for one more month." 

The Arabian Hotel Investment Conference (AHIC-2014), which is organized by MEED Events, will feature a number of discussion sessions to shed light on the most important factors behind the growth of tourism sector in the Kingdom of Saudi Arabia.