The seasonal tourism industry will see huge profits during festivals and holidays, and empty rooms through the rest of the year. In this hospitality TV show Martin Ostermann explains the situation in Saudi Arabia.

Issues with the seasonal tourism industry

Unique market, it’s growing, it’s growing very heavily.  We’re looking at several opportunities in Saudi Arabia at the moment, key cities like Riyadh.  But there’s a lot of focus on the holy cities, a large number of rooms being developed there.  With Saudi, we feel it’s a bit tricky still in terms of getting the right product lined up with the expectation of the market and of the developers as well.  Simply because in the holy cities you find a massive amount of rooms with relatively small room sizes that aren’t, you know, fit for, let’s say, an international five star brand because during the off season there you have the challenge of selling them against the competitors there.  The main season, the religious travellers the hotels fill up naturally.  But then obviously the other part of the year you have to compete as you would in a normal market.  And we see a little bit of leisure tourism developing in Saudi Arabia as well along the coastline. So that’s another opportunity that we’re looking at.

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Seasonal markets are common in the hospitality industry. There will nearly always be variations in revenue throughout the year. In this TV show Hala Choufany discusses the seasonal markets in Saudia Arabia.

Cultural seasonal markets

We do a lot of work.  Saudi Arabia at this point in time, as we speak is probably the focus points would be the holy cities and this is not necessarily reflective of the entire of Saudi Arabia because naturally with the religious tourism these markets will always grow.  You’ve got a growing Muslim population which naturally would feed into more.  The pipeline for Makkah specifically is extremely aggressive.  But again, I mean, there’s always going to be seasonality in that market, but the case of oversupply is existent.  However the dynamics of this market is very different to say Jeddah or Riyadh.  So in looking back at what has happened in Saudi Arabia over the last couple of years there has been obviously great improvement in RevPAR occupancies rate and performance of tourism indicators in both Jeddah and Riyadh.  Jeddah however benefits from limited, if any new supply coming in, which is obviously helping occupancies being achieved in excess of 80% whereas Riyadh seems to be struggling more with all the new supply that is coming in, especially that as a market it’s not diversified, it’s very much of a corporate market so hence the seasonality is more pronounced.

Keep browsing The Hospitality Channel for more fantastic videos on seasonal markets and related subjects.