Saudi Arabian city of Jeddah's hospitality sector witnessed a successful end to 2014 with demand growth having climbed 2.9 per cent and supply increasing by 1.9 per cent, which resulted in a positive occupancy growth of 74.3 per cent during the year.

The organisers of The Arabian Hotel Investment Conference (AHIC) held a briefing event in Jeddah this week, for industry leaders and professionals to discuss the positive performance of Saudi Arabia’s hospitality sector in 2014, as well as the outlook for 2015, with a particular focus on Jeddah and the Holy Cities.

The event was hosted by Makarim Annakheel Hotel and Resort in Jeddah, and the gathering was addressed by industry leaders including: Denis Soren, CEO Advisor, Dur Hospitality, Philip Wooller, Area Director for Middle East and Africa at STR Global; Filippo Sona, Director, Head of Hotels MENA Region at Colliers International; and Edmund O'Sullivan, Chairman of MEED Events, among others.

The first session of the briefing revealed that the Middle East and Africa region had reported positive performance results during December 2014, showing a 3.9 per cent increase in occupancy to 61.9 per cent, a 3.2-percent increase in average daily rate to $183.35 and a 7.3 per cent increase in revenue per available room (RevPAR) to $113.53.

Wooller, who gave the presentation, said: "As a whole, Middle East witnessed positive results in 2014, and Jeddah specifically has had an overall successful end to 2014 and continues to improve its reputation as a destination for business and leisure. Room rates achieved an increase of 8.9 per cent to SR968.73 ($258) for year-end, which resulted in a RevPAR increase of 9.9 per cent. Jeddah has been able to achieve rate increases consecutively over the past 32 months, with the highest average daily rate (ADR) achieved for the city since 2000. Jeddah also continues to increase the amount of rooms under construction, with the most recent report showing over 2,000 rooms in the pipeline.”

On the holy cities of Makkah and Madinah, Wooller said: “Looking at the holy cities of Makkah and Madinah on a 2014 year-end basis, they achieved RevPAR increases of 4.3 per cent and 8.6 per cent respectively. Madinah also reported a significantly higher year-end occupancy growth of 9.8 per cent compared to Makkah’s 5.8 per cent,” he said.

“It is difficult to compare the two cities as their numbers are so diverse- Madinah’s occupancy for the month of December increased 28.3 per cent, in contrast to Makkah’s - 0.0 flat year-over-year comparison rate.” Wooller said. “On the other hand, Makkah is still showing the higher year-end RevPAR of SR529.04 ($140.9) against Madinah’s SR345.26 ($92), both driven by occupancy rather than ADR.”

Colliers International, who recently launched Mena Hotel Market Forecast, also showed in their report that Jeddah is currently witnessing consistent demand and delays in new supply to stabilise the market.  They anticipate that the occupancy rate will reach 76 per cent, ADR $262, RevPAR $200, and YoY RevPAR of 2 per cent over the next 12 months. – TradeArabia News Service