Corporate and business tourism has played a significant role in supporting the strong performance of Saudi Arabia’s hospitality sector in the third quarter of 2023.
In the year to September 2023, Saudi Arabia’s hospitality sector has shown consistent improvements in its Key Performance Indicators. The average occupancy rate increased by 5.9 percentage points, accompanied by an 18.4% increase in Average Daily Rate (ADR) and a 31.2% increase in Revenue per Available Room (RevPAR).
These positive results have brought the indicators above their 2019 levels in most cases. In the year-to-date period compared to the same period in 2019, Saudi Arabia has recorded a 1.2 percentage point increase in average occupancy levels, a 9.6% increase in ADR, and an 11.8% increase in RevPAR.
Looking at specific cities, Jeddah experienced a 7.3 percentage point growth in average occupancy, while ADR slightly decreased by 0.1%. This led to a 12.7% expansion in Jeddah’s RevPAR. In Khobar, the average occupancy rate increased by 7.7 percentage points, despite a 4.9% decline in ADR, resulting in a 9.0% improvement in RevPAR. Riyadh saw a 3.1 percentage point rise in average occupancy, along with a 13.1% increase in ADR, leading to a 19.1% growth in RevPAR. Makkah and Madinah both performed consistently during the religious high seasons. Madinah’s average occupancy rate expanded by 10.1 percentage points, with a 38.1% upsurge in ADR, resulting in a remarkable 60.8% improvement in RevPAR. Makkah’s average occupancy rate was 5.9 percentage points higher, with a 27.2% increase in ADR, leading to a strong growth rate of 40.6% in RevPAR.
Taimur Khan, Head of Research – MENA at CBRE in Dubai, stated, “Corporate and religious tourism have significantly contributed to the growth of Saudi Arabia’s hospitality Key Performance Indicators in the year to September 2023, compared to the previous year. Across the Kingdom, average occupancy rates are 5.9% higher, average daily rates are 18.4% higher, and the average revenue per available room is a staggering 31.2% higher. With events like the Riyadh and Jeddah Seasons still to come, we expect this strong performance to continue throughout the remainder of the year.”