The Al Bayt Towers complex is part of the development surround-ing the Holy Mosque in Mecca. The project has seven towers and will include Rotana’s Rayhaan Al Marwa.

“With responsibility for three new sectors as well as development of three more, we will be dealing with antiquities and museums, including exploration, accommodation, travel agents, tour operators and tourism master plans,” says Prince Sultan bin Salman bin Abdulaziz Al-Saud, chairman of the board and secretary general of the Saudi Commission for Tourism and Antiquities.

Among current developments, classification of hotels has begun, starting in Mecca and Medina, while a major study is researching possible expansion of a heritage inn chain similar to the parador system in Spain.

“We are also looking at historic palaces to turn these in to accommodation or build rooms around them, plus historic villages. We have five planned and there will be accommodation in these,” says Prince Sultan, who also revealed that a Red Sea tourism master plan is in place, as well as the development of several colleges to train nationals for careers in tourism.

Further measures are in place to streamline annual vacations to give Saudis more short holidays while, in a bid to drive demand, the commission looks to provide seed capital to event organizers to create MICE attractions. Today, about 5 million people spend about US$15 billion on outbound tourism, and the leadership aims to keep some of that revenue in the kingdom. “We have around 100 events this year, of which 15 are signature events, and there will be a lot more next year,” Prince Sultan said at the recent Arabian Hotel Investment Conference in Dubai.

Prince Sultan

Other initiatives complementing this expansion included the addition of four more airports, bringing the total to 30, plus the further construction of gateway airport cities, starting with Jeddah, which would include hotel, exhibition and conference facilities to target the meetings sector. Furthermore, King Abdullah is developing six “economic cities” in various rural areas of the kingdom, the first of these will be King Abdullah City located about an hour’s drive from Jeddah.

Guido De Wilde, vice president, Middle East, Starwood Hotels & Resorts, which has 10 hotels in the kingdom, points to the launch of two new national airlines that will have a major impact on domestic tourism. “In addition, the railway project linking the Eastern Province with Riyadh and the Western Province, as well as linking Jeddah with the two Holy Cities Medina and Mecca was recently announced, will definitely create more opportunities for further tourism investment projects in the major cities of the kingdom,” De Wilde says.

De Wilde believes Starwood can have eight of its brands represented in the country with multiple-brand presence within certain cities, similar to Jeddah where Starwood has a Sheraton, Le Méridien and Westin. “We see great potential for our limited-service brands to grow in the kingdom, including our Four Points by Sheraton, aloft and Element brands,” he says.

Other brands capitalizing on opportunities in the mid-market include Nakheel Hotels, which plans to roll out easyHotels but is still in the early stages of development, according to CEO Joe Sita.

IHG recently signed a development deal to open 12 Express by Holiday Inn properties in Saudi Arabia within the next five years. “We are committed to leading the surge of new accommodations being provided in the kingdom and will continue to invest heavily in this prime location moving forward into the future,” says Tom Rowntree, vice president commercial for the Middle East and Africa.

“A number of markets across KSA have been identified as key areas for IHG properties,” Rowntree says. “Riyadh and Jeddah are already established destinations for business travel and as such will be important target markets over the coming years. Damam and Al Khobar are also becoming increasingly important destinations, as well as other commercial hubs and industrial developments.”

Toufic Tamim, vice president of sales and marketing, Mövenpick Hotels & Resorts, says he expects to see growth in year-round religious tourism and an increase in the corporate and government segment in Riyadh and Al Khobar. “As a result, we will be significantly expanding our portfolio in Saudi Arabia with two new properties in Mecca and Yanbu opening this year and a third hotel in Riyadh opening in 2009,” he says.

Tamim adds that while traditionally both Riyadh and the Eastern Province cities have been undersupplied with business hotels, there is now a flurry of new investment in luxury apartments and hotels to serve growth in government and business tourism. “And with the massive new projects underway in Saudi Arabia, from the new industrial cities to infrastructure, there has been a flood of demand for hotel space from business travelers,” he adds.

For Hilton Hotels Corp. and its new global push, immediate expansion plans in the kingdom will drive presence of the core Hilton brand as well as the luxury Waldorf=Astoria Collection and Conrad brands, according to Jean-Paul Herzog, Hilton’s president for the Middle East and Africa. “We are also identifying opportunities for Doubletree by Hilton and Hilton Garden Inn,” he adds.

Herzog says Hilton already has a strong presence in Jeddah, Mecca and Medina and is focusing on Riyadh, “where there is tremendous opportunity to establish our brands. We are truly committed to sustaining the kingdom’s thriving tourism infrastructure.”

Regional brands also are establishing a growing presence in Saudi Arabia. Dubai-based Rotana signed its first hotel in Mecca and is setting up a sales office in Jeddah to assist with expansion and inbound and outbound business.

Rotana has just signed a management agreement with Jiwar Real Estate Management & Marketing Co. to manage its first property in Saudi Arabia and specifically in Mecca, under its newly launched brand Rayhaan Hotels & Resorts by Rotana, according to Imad Elias, Rotana’s executive vice president and COO. “We are currently working on an immense project to develop 15 hotels in Saudi Arabia and this will be announced in due course,” he says.

The 5-star Rayhaan Al Marwa Hotel, part of the Al Bayt Towers complex, will include more than 1,000 rooms and suites. The hotel faces King Abdul Aziz Gate, and major units of the tower have an overview of the Holy Mosque and the Ka’aba. The hotel includes 27 elevators to guarantee fast movement of guests keen to meet the prayer’s call.

“Rotana was approached by many developers in the last few years but we had to wait for the right opportunity to get into the market,” says Elias. “Islamic tourism is one of the main business models promoted by the government and has been deftly embraced by the private sector to diversify tourism and protect it against the risk of geopolitical conflicts.

“The concept of Islamic tourism can only develop its full potential with the improvement of inter-regional travel and visa endorsements,” Elias continues. “Security and stability are key ingredients for new investment and innovative tour programs. Inter-Arab and inter-Muslim tourism can contribute to stabilizing the national tourism industry. The introduction of a multi-layered concept that integrates cultural, religious and recreational pursuits may have the ability to successfully increase tourism growth. Given the strength of the Saudi economy, by default a tourism sector emerged.”

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