Saudi hotels record a 10% rise in room rates

Saudi hotels record a 10% rise in room rates

According to a report by CBRE, the increase in RevPAR has been caused by the easing of Covid-19 restrictions

A recent report by CBRE has found that Saudi Arabia’s hospitality sector has started to gain momentum and is likely to improve towards the end of the year following the easing of Covid-19 restrictions in the Kingdom.

The average daily rate (ADR) at hotels across the Gulf state increased by 10% in the first nine months of the year compared to the same period in 2020, while revenue per available room (RevPAR) went up by 1% over the same period. 

The growth has been fueled by higher levels of tourism in major destinations such as Jeddah, Khobar and Riyadh, where RevPARs increased by 55%, 14% and 2% respectively. 

However, the overall occupancy rates still posted a 3.4% year-on-year drop, owing to the decline in pilgrimage footfall in religious sites Makkah and Medina, where hotel occupancy rates fell by 11% and 1.1% respectively. 

The report stated: ‘In the holy cities of Makkah and Medina, restrictions during the reporting period have meant that RevPAR [also] decreased by 5.2% and 11%, respectively.’


Saudi Arabia eased Covid-19 restrictions in public places last month, allowing commercial outlets to resume operations at full capacity, and removing mask-wearing and social distancing restrictions outdoors. Restaurants, cinemas, sports stadiums and other related venues are also allowed to operate at full capacity, with the condition that patrons are fully vaccinated.

Taimur Khan, CBRE Head of Research, MENA, said: “Looking ahead, given that the vast majority of Covid-related occupancy restrictions and travel bans were removed in mid-October, we expect to see significant improvements over the remainder of the year across all key performance indicators in Saudi Arabia.

“Major events such as the Saudi Arabian Grand Prix in Jeddah and the start of an extended Riyadh Season are expected to underpin both local and international leisure demand. Furthermore, the removal of the UAE from the red list will lead to a significant uplift in corporate tourism levels.” 

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