A room with a view: understanding domestic hotel expectations
With tourist arrivals projected to approach 100 million by 2030, the hospitality sector in the Kingdom is racing to develop hotel rooms and tourist facilities to cater to the expected influx of visitors.
17 March 2023
Indeed, we are tracking more than 300,000 rooms due to be built by the end of the decade. STR data has already confirmed the rapid COVID rebound in the performance of the country’s hotels, with nationwide hotel revenues crossing SAR 8 billion during H1 2022, exceeding the level recorded in H1 2019 and equalling the figure recorded in H1 2018.
Survey 2 has helped us better understand the needs and expectations of domestic tourists who are expected to play a critical role in helping unlock Saudi Arabia’s domestic tourism potential.
Hotel demand remains high
Survey 2 reveals that 42% of all respondents prefer to stay in a hotel when travelling around the country. The second most popular choice is to stay with family or friends (21%), followed by serviced apartment options (20%). Resorts (9%) and Air BnB properties (8%) are even less favourable.
This is likely in large part due to limited Air BnB options around the country, and similarly, the number of resorts in Saudi Arabia remains low for now.
That being said, younger generations, particularly those between the ages of 25-35, find restrictions imposed by hotels (37%) to be off-putting and would rather avoid staying in a hotel. Cost appears to be the least of their concerns (28%), ranking lower than any other group.
For Gen Z, cost is a major determining factor for why they would choose not to stay at a hotel (48%). Most older Gen Z respondents (over 45 years) say they feel like hotel rooms are too small (44%), which is presumably linked to their desire to accommodate large family groups.
