Rotana reveals plans to reflag hotels in Saudi Arabia

Rotana

• ‘Five or six’ properties under discussion
• Nine new hotels planned for kingdom
• ‘Saudi Arabia is the new Vietnam’

Rotana, the Abu Dhabi-based hospitality company, is looking at aggressive expansion in Saudi Arabia, including taking over already operational hotels, its chief executive has revealed to AGBI.

At this month’s Arabian Travel Market, Rotana outlined plans to launch nine new properties in Saudi Arabia within four years, aiming to double its rooms to more than 4,400.

The company’s CEO, Philip Barnes, said that discussions are also under way to reflag existing properties in the kingdom.

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Reflagging is when a hotel switches from one brand operator to another.

“We probably have another five or six projects that we’re in conversation about in Saudi,” Barnes said. 

“Not all of those will materialise but if even 30 percent do that’s another two hotels that could potentially get signed on within the next year.” 

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Barnes said Rotana’s homegrown brand is a key factor in its appeal to hotel owners in the Gulf state.

“We have a lot of owners who recognise that Rotana is [a] regional brand and want us to go into those destinations where there is an opportunity for development and for new properties, or in some instances to reflag existing properties,” he said.

Barnes said Rotana was prioritising growth in established locations over new mega developments such as Neom.

The company’s expansion includes four planned Edge by Rotana properties, a Rayhaan by Rotana property in Riyadh, three in Al Baha, and the upcoming opening of Al Manakha Rotana in Medinah.

Rotana will launch its first two properties in the United Kingdom this year, Centro New Malden and Centro Kingston. Centro is its affordable hotel and serviced apartment brand. 

The hotel sector in Saudi Arabia is recovering robustly since the Covid-19 pandemic with improved occupancy and average daily rates boosted by the easing of travel restrictions, faster visa processing and business reforms. 

A report from Deloitte said Riyadh and Jeddah hotels reached occupancy rates of 80 percent and 79 percent respectively at their peaks last year. 

There are dramatic changes within Saudi Arabia that are making it much more appealing, much more inviting.

Philip Barnes, CEO, Rotana

The national average occupancy rose to 63 percent in 2023, up from 58 percent the previous year, with Riyadh’s average daily rate increasing by 18 percent to SAR 797 ($213).

Barnes likened Saudi Arabia’s new tourist appeal to Vietnam’s transformation in the 1990s. 

“If you’d have told me five years ago that anybody would go to Saudi on vacation, I’d have told you that you’d obviously been on something that was helping you look at the world through rose-coloured glasses,” he said.

“Today, that’s a very different story, similar to what the UAE has done.

“Culturally, there are dramatic changes within Saudi that are making it much more appealing, much more inviting.

“Like the UAE, it’s a very stable geopolitical situation. It has a lot of appeal as a new destination. There’s a lot to see, a lot to do.”

Rotana operates 76 hotels in the Middle East, Africa, Eastern Europe and Turkey, serving more than 6 million guests per year. 

The company’s overall pipeline includes 10,420 keys across six brands, including 40 international hotels and seven new properties in the UAE.