Saudi Arabia: the race to build new business hotelsIn Saudi Arabia there are a lot of Oil magnets, which means that great business can be done over there. So, what’s the effect of allowing foreign direct investments in Saudi Arabia? Just read further to know something more about this item.
The kingdom Saudi Arabia had 11 investment banks, but 2 years ago, the king of Saudi Arabia, King Abdullah, relaxed the bank laws to allow foreign direct investing in the country. Today, there are 110 investment banks over there. The result of this law means that there are capitalist who are known for building new business hotels, particularly in Riyadh, the capital of Saudi Arabia.
All the new hotels count at least three and four stars. There are even international brands who are building their hotels over there, like Hilton and Movenpick for example. Because of the current economic climate which is caused by the financial crisis, brands chose to built for at least three stars hotels. Hotels like the Burj Al Arab in Dubai, which counts ten stars are common these days. Business people think twice before they act. But you can find 2 five star hotels in the capital. One of them is called The Four Seasons Hotel which looks like the French Eiffel tower. But last year the five star segment decreased by 5.5%. So the other star segments are more attractive for prospective investors.
The rich aspect of these hotels are easy to explain. The buildings are eccentric which means the buildings have a special shape. Thanks to the added value, these hotels will become a success. If you can afford a room, you’ll get a 24-hour butler service, you can go to a ballroom witch a capacity of 4000 people. Icons like Bill Gates want to have such a choice.
The figures show that: three-quarters who visit these hotels are people who are on business travel. 11% are form the United Kingdom and 6% from the United States. Even Friday brunches are popular in these hotels. It’s a segment that’s well known in the west. Even religious tourists who are taking the annual pilgrimage to Mecca, visit Saudi as second city. So these hotels become more popular.
According to me, the future looks bright for the capitalists who have invested in the hotel branch in Saudi Arabia because if you compare it with the tourism in Dubai, where’s a total ban on alcohol, you’ll see mostly archaeological and cultural tourists over there. The future for Saudi is in the hands of the capitalist, their target groups can even be tourists instead of only business people because today, more and more regular people of the west who go on holiday have a high demand for luxury. If they go on holiday, it may cost. So the task for the investors is to built out a business and even an tourist infrastructure. I can call it a sort of resort-style development. But one of the most capital things to do is: invest in the hotels with the right quantity of stars, like three or four star hotels. As a prospective investor, I should advice you to invest in hotels which look attractive. Something modern because the first view in the catalogue can make the difference. People mostly think, if it looks good at the outside, it will be also sufficient at the inside.
I can conclude by telling you that only an investment in the hotel branch can turn out profitable when there is a tourist industry building out in the country. The profit of this, is that jobs can be created because if you have an industry, you need people to run it.
Source:
http://www.timesonline.co.uk/tol/travel/business/article7079180.ece
