Saudi Arabia’s hospitality market is difficult to project in the short term as the kingdom enters a turbulent time, says Ellie Younes, executive vice-president at Belgium’s Rezidor Hotel Group.

“Oil prices, a current oversupply of hotel rooms and geopolitical issues in Yemen have meant the kingdom is facing a headwind of challenges,” said Younes on the sidelines of the Arabian Hotel Investment Conference (AHIC) in Dubai on 27 April. “At the same time, continued liquidity, government support and the continued confidence in the Saudi Arabia as the largest economy in the region will mean the kingdom will be able to reach its tourism targets.”

In saying this, Younes recognised the need for the kingdom to boost its mid-level supply. “This trend is not new and, more recently, investors have been interested in this segment as it is a natural change of direction during a period of economic correction.”

Younes also told MEED that 50 per cent of the group’s current supply is in Saudi Arabia with more expected to enter the market in 2016. “We have five to six hotels expected to be ompleted this year in Saudi Arabia, the UAE and Oman,” said Younes.

Saudi Arabia’s Vision 2030 said it will look to capitalise on the government’s reserves of real estate and allocate prime areas within cities for educational institutions, and retail and entertainment centres. Large areas along coasts will be dedicated to tourist projects and appropriate lands will be allocated for industrial schemes.

The kingdom is also looking to double the number of religious tourists.