Hoteliers Expand in Saudi Arabia as Mecca Goes Upscale

Jun 29, 12 | 12:04 am

By Zainab Fattah

The pilgrimage starts with a private jet to an exclusive airport in Saudi Arabia, where passengers are treated to a buffet while travel-company employees process their immigration documents. The visitors are then taken in air- conditioned cars and buses to the InterContinental Hotel overlooking the Grand Mosque in Mecca.

“We try to make it a little more comfortable for our clients, that’s all,” said Abdulrahman Mohammad Al-Shaya, a sales executive for Kuwait-based Al Marwa. The company offers wealthy pilgrims a seven-day package for the Hajj, the Islamic pilgrimage every able-bodied Muslim is obliged to make, for about 5,500 Kuwaiti dinars ($19,800).

Rising wealth in Islamic countries from the Persian Gulf to Indonesia is boosting demand for a higher standard of accommodation as about 3 million pilgrims prepare to descend on Mecca for the annual Hajj in October. That’s contributing to a surge of hotel investment in Saudi Arabia by companies including InterContinental Hotels Group Plc (IHG), Hyatt Hotels Corp. (H) and Starwood Hotels & Resorts Worldwide Inc. (HOT)

Hilton Worldwide Inc., owned by Blackstone Group LP (BX), plans to more than double the number of hotels it operates in the country to 14, including six in Mecca. It currently runs six in Saudi Arabia. U.K.-based InterContinental will increase its room numbers by about 50 percent to 7,300 in the next three to five years. Hyatt, whose only Saudi hotel opened in 2009, expects to have eight more in five years.

Starwood Expands

Starwood, the Stamford, Connecticut-based owner of the luxury St. Regis and W brands, has plans to manage five more hotels, adding about 1,300 rooms. It currently has 10 hotels with about 3,000 rooms.

The boom in Saudi Arabia will increase the number of branded hotel beds available by 58 percent in the next few years, research company STR Global estimates. While international companies can operate hotels in Saudi Arabia, they are not allowed to own property in the country.

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