Hotel Industry in Saudi Faces Grave Crisis 

JEDDAH, 1 May 2003 — The hotel industry is facing a crisis with one of the lowest room occupancy rates in decades.

A majority of five-star and deluxe hotels averaged a steep 30 percent drop in room occupancies during the month of April compared to the corresponding month last year, according to statistics provided by an executive of an international hotel chain.

A confidential report of the performance of seven five-star hotels here suggests that one of them, on Madinah Road, had only 23.14 percent of its rooms occupied during the month against its own record of 32.4 percent in April last year.

Percentage figures for the other hotels during the month are slightly higher but still disappointing — 23.14 percent, 27.74 percent, 29.89 percent, 33.72 percent 34.87 percent and 43.35 percent. The hotels include two each on Madinah Road, in the city center and the Corniche, and elsewhere.

Sales and reservations directors of various hotels said they were worried that their phones had not been ringing. "Every time there is a ring, we hope it will be a room reservation from somewhere, but there seems to be nothing coming from anywhere," confided a sales director who asked to remain anonymous.

"We expected an upturn in our business with the end of the Iraq war, but just then the outbreak of the Severe Acute Respiratory Syndrome (SARS) got in the way of free flow of travel. However, we're hopeful and optimistic that we'll have a busy season this summer," Thomas Schmelter, general manager of a Jeddah hotel, told Arab News.

His optimism is shared, at least publicly, by most of the managers in the hospitality industry, with hopes of a boost to in-Kingdom travel running high. However, privately they are often less sanguine.

A new pattern of summer travel is nonetheless emerging, hotel executives say. Saudi families have been avoiding traveling to the United States after Sept. 11. They will now be averse to traveling to the Far East because of SARS. So this summer they will prefer to travel either within the Kingdom or elsewhere in the Middle East-Gulf region, or to parts of Europe.

"We expect a lot of Saudis to visit Jordan this summer," said Nabil Al-Khatib of an Amman hotel. "Kuwait will be another popular destination in the coming holiday season," says Mathew Ephraim of an international hotel chain in Kuwait. "Spain is yet another country that Saudi families have been visiting and this time there will be more," says Anton Bahbah of another hotel chain in Madrid.

With an eye to further boosting in-Kingdom tourism and attracting visitors from elsewhere in the Middle East-Gulf region, the Saudi Council of Chambers of Commerce and Industry is organizing its first Saudi National Tourism Forum at the Jeddah Hilton from May 27-29.

"Marketing and National Tourism" is the theme of the event to be opened by Prince Sultan, second deputy premier and minister of defense and aviation. Speakers include Asir Governor Prince Khaled Al-Faisal, Higher Tourism Commission Secretary General Prince Sultan ibn Salman, and Saudi Arabian Investment Authority Governor Prince Abdullah ibn Faisal ibn Turki. Prince Abdullah will deal with the emerging environment of the Kingdom's investment sector, especially in tourism.