Navigating the sands of change: Saudi Arabia's hospitality revolution

Hospitality has always been an important part of the cultural traditions of the Kingdom of Saudi Arabia. For centuries, the Hajj and other spiritual journeys have been bringing people from across the Middle East and beyond to the Kingdom, and now, as the nation looks to transition away from fossil fuels as an economic mainstay, travel and tourism are recognised as long-term drivers for growth.

According to data from Knight Frank, in 2021 there were 67.3 million total hotel visitors to KSA – both domestic and international. This is predicted to grow to around 150 million a year by 2030, with around 30% of those being international guests.

This has stimulated major investment into developing new accommodation, and there are currently plans for more than 29,000 new 5-Star hotel rooms and close to 30,000 4-Star rooms. This could see KSA provisioned with more than 77,500 5-Star rooms and around 75,000 4-Star rooms by 2030.

Public finance attracting global collaborators

The Public Investment Fund (PIF) is leading growth of the sector, contributing billions of dollars in investment into projects. This is where the Saudi 2030 Vision finds its practical expression, as these projects support major goals of the Vision including stronger connections with the global community, low-carbon economic growth, innovation, job creation and elevating sustainability in the consciousness of the property sector.

Saudi Arabia's hospitality sector presents an attractive investment landscape for both domestic and international investors. Vision 2030 has instituted regulatory reforms and eased investment procedures, making it more enticing for foreign investors to participate in the country's development. The establishment of Special Economic Zones, such as the Red Sea Project and NEOM, offers investment incentives and a conducive environment for foreign businesses.

Moreover, the country's commitment to a more open and welcoming tourism policy has led to a surge in international visitors. Tourists are increasingly drawn to Saudi Arabia's diverse attractions, from historic cities to natural wonders like the Red Sea coastline. The government's investment in enhancing the tourism infrastructure, including airports, transportation, and cultural sites, further bolsters the country's appeal as a tourist destination.

The presence of global hospitality operators is also growing, and complements the boutique, local offerings. Some developments are successfully combining the two, creating urban environments where past, present and future blend to create remarkable destinations.

Care for the past and for future generations

Cultural preservation, including architectural traditions and built form materiality, combined with an emphasis on environmental sustainability credentials underpin the development approach.

Mirroring the shift away from oil and gas dependence on an economic level, there is also a rise in the adoption of renewable energy including solar PV for supplying a significant part of building energy requirements. Other key strategies include passive design optimisation including natural ventilation, strategic shading and orientation, and the use of thermal mass, all of which are familiar in the lexicon of the region’s historic architecture.

An excellent example of how these concepts and trends converge is the $63.2b development that is Diriyah. This gigaproject incorporates the At-Turaif UNESCO World Heritage Site, an ancient mud brick city recognised as the birthplace of the Kingdom of Saudi Arabia and the original home of the House of Al Saud.

The expansion of the hospitality sector in Saudi Arabia is a catalyst for empowerment within local communities. The tourism industry relies heavily on local talent for employment, offering opportunities across a spectrum of professions, including hospitality management, culinary arts, transportation services, and cultural guides. This influx of job opportunities not only enhances the livelihoods of individuals but also contributes to the overall socio-economic development of the region.

Furthermore, as international hotel chains establish their presence within the Kingdom, collaboration with local businesses and suppliers is encouraged. This collaboration nurtures local entrepreneurship, providing small and medium-sized enterprises with a platform to showcase their products and services, fostering economic growth at a grassroots level.

Digital smarts overcome challenges

As consultants, being involved with these projects is also leading to innovation in our design and delivery methodologies. The implementation of digital technologies within the hospitality sector in KSA can streamline operations, optimising efficiency and enhancing guest experiences. Integrated management systems, utilising cloud-based platforms and data analytics, enable real-time monitoring of guest preferences, inventory management, and operational processes. These digital tools facilitate agile decision-making, allowing hoteliers to adapt swiftly to changing demands and trends. Automation in booking processes, guest services, and check-in/out procedures not only reduces operational costs but also fosters a seamless and personalised experience for visitors, aligning with Vision 2030's goal of providing world-class services.

Digital smarts enable a deeper level of guest engagement and personalisation. Saudi Arabia's hospitality sector can leverage AI and machine learning to understand guest behaviours and preferences, thereby customising services and offerings. Personalised recommendations for local attractions, cultural experiences, or dining options based on individual preferences can significantly enhance the visitor's stay.

Ultimately, the approach to hospitality in KSA can be transformative for all parts of the property sector if we take the standpoint that we should no longer be designing to be ‘future-ready’ – we should be designing to be ready now for net zero, climate resilience and sustainable economic growth.