The Saudi market is more resilient to the financial crisis than anywhere else, a top hotel executive said recently. Hilton Hotels vice president for development, Middle East, Elie Younes said that the hotel group will focus development strategy on Saudi Arabia this year, where it plans to roll out the first Garden Inn branded properties to enter the Middle East. “For a number of reasons, including the current climate, it would make sense to focus on Saudi Arabia today,” he said. “Saudi Arabia is definitely a sufficient market - it is more recession-proof than others,” he added. Hilton Hotels will open its first Garden Inn in Riyadh this year, followed by another in the KSA market within the next 18 months, according to Younes. “Our geographical focus this year will mainly be Saudi Arabia, Abu Dhabi and some parts of the Indian Ocean and the Seychelles,” he noted. He stressed that in terms of investment, Hilton, which had recently formed a Middle East development team, was looking to identify owners with both money and access to land. “So it has to be a local owner in each market,” he said. “It is difficult to find a Saudi Arabian investor doing these types of transactions in Abu Dhabi. So we would be looking to try and find these kind of people on the ground in the respective markets.” Younes said there was still a “big gap” in terms of where Abu Dhabi was today and where it wanted to be in terms of its “master plan”, meaning there were opportunities for Hilton to fill this void with hotel product. This is reflected in the content of the forthcoming Arabian Hotel Investment Conference (AHIC) from May 2-4, which will feature a Saudi Arabia summit on day two, led by Prince Sultan Bin Salman Bin Abdul Aziz Al-Saud, president and chairman of the Board, Saudi Commission for Tourism & Antiquities (SCTA). One of the panel's sessions is entitled How to succeed in Saudi Arabia, with a focus on what the challenges are of investing in Saudi Arabia from a hotel industry perspective. He also noted that while investors were much more cautious about investing during this climate, on the plus side, construction costs were decreasing. “Developing a hotel today is 25 percent cheaper than yesterday and by the time it is constructed it is three years from today when all this recession will be done,” Younes said. Saudi Arabia has recently launched several initiatives as part of a multi-billion dollar effort to boost tourism revenues in the kingdom. Developing tourism is a high priority for the Saudi government as part of its wider strategy to diversify its economy away from its dependence on oil, particularly in light of the plunge in crude prices. The tourism sector generates billions of dollars in revenue and provides jobs for more than 342,000 people in areas related to hotels, resorts, furnished apartments, cafes, travel agencies, transportation and entertainment. Religious tourism is by far the key driver of tourism in the Kingdom as it is home to the holiest sites in Islam. Overall, religious tourism accounts for some two-thirds of all earnings in the international tourism sector and one-third of domestic tourism revenue. It also helps to make Saudi Arabia the top destination in the Middle East in terms of international tourist arrivals. __
