Hotel conversions are becoming increasingly popular in the MENA region as global operators recognize the value in partnering with local expertise enabling them to expand into foreign markets quickly and efficiently while minimizing costly mistakes. Over the past year, these conversions have been a critical platform for growth, with leading hotel groups launching new brands to broaden their global portfolios. Of the US $27 billion worth of hotel investments in the MENA pipeline, more than the US $3.5 billion worth of new hotel contracts were awarded in the GCC in less than two years. A large chunk of that investment is being driven toward the Kingdom as they open the doors to tourism to welcome 100 million regional, domestic, and international travelers annually.

Saudi Arabia has sharply turned its focus towards tourism as one of the catalysts for economic diversification, valuable job creation, and improved quality of life for its citizens. Vision 2030 inspires a sustainable future for the Kingdom as it undergoes transformational reforms and adjusts its regulatory processes to facilitate ease of business and attract investment. As part of its investment strategy, the Kingdom is revolutionizing the Saudi tourism product with its multi-billion-dollar Gigaprojects: Amaala, NEOM, Qiddiyah, and the Red Sea Project earmarked to become significant attractions with a wide variety of offerings. Having invested substantially through its National Tourism Development Fund, Saudi Arabia projects that the sector will contribute 15% to a GDP of US $1.86 trillion by 2030.

Largest Tourism Segment

With Saudi Arabia on its way to becoming a leading global destination, well-known hotel brands are working to establish their properties across the Kingdom as international arrivals are expected to reach 22.1 million by 2025.

Currently, the largest category of visitors stems from religious tourism, as over eight million pilgrims make their way to the holy cities for Hajj and Umrah each year. The Saudi government aims to increase this already thriving market to 30 million visiting pilgrims by 2030, requiring a significant need for increased accommodation and services.

The challenge of affordable and quality accommodation

Hotel brands have responded to the call by introducing ultra-luxury brands in Makkah, offering premium facilities to host niche-market clientele with room rates trending on the more expensive side. However, many visiting pilgrims usually stay in very modest accommodations with minimal necessities.

Over the years, finding quality and affordable accommodation has become difficult as Makkah’s Grand Mosque expanded to facilitate an additional 300,000 pilgrims for a total capacity of 2.2 million. The Saudi government is working rapidly to improve infrastructure throughout the surroundings of the holy cities to accommodate the increasing demand. This challenge is expected to be further exasperated as global travel has become more accessible, making the goal of welcoming 30 million pilgrims by 2030 even more achievable.

Nur By Makarem is a solution for hotel owners

Recognizing the need for affordable and quality stays, Dur launched its 3-star “Nur by Makarem” brand to enhance the offerings of existing properties in Makkah and Madinah in record time. Dur’s newest home-grown brand provides hotel owners the unique opportunity to have their properties converted, rebranded, and revamped to meet the ‘Nur’ standard while showcasing an authentic Saudi experience.

Drawing on Makarem’s extensive experience and success in the four and 5-star market, Nur will add value to the 3-star hotel segment by providing world-class hospitality services and ensuring a consistent and seamless, upgraded experience for its guests throughout all of its branded properties. An added advantage is that hotel owners of unbranded/old hotels will become part of a fully elevated and integrated hospitality ecosystem within a brief period.

In line with Vision 2030, Dur aims to enhance its visitor's hospitality experiences throughout the Kingdom, inspired by over four decades of knowledge and expertise within the Saudi tourism landscape. The launch of the “Nur by Makarem” brand expands Dur’s portfolio, adding to the quality and variety of hospitality options in the holy cities.

Hotel conversions are the future

The Saudi government has set the ambitious goal of adding 500,000 keys to the market within the next five years to cater to the influx of visitors to the Kingdom. Conversions remain the fastest and most efficient way to enter the market, offering familiar brands to the emerging tourism industry. This trend is likely to continue at a rapid pace due to the uncertain business climate hindering the progress of new developments while offering independent hotel owners the opportunity to benefit from the strength of the brand’s network effect.

Since 2021, Saudi Arabia has registered a significant jump in branded hotel keys to 60,400, representing a 4% increase from the previous year. The number of keys is expected to increase by another 15% to 69,300 to meet the demand, outperforming UAE at 3% and Egypt at 8%. These figures are revealing a robust trend of regional and international brands' heightened interest in the Kingdom.

Saudi Arabia is becoming a prime location for investment in the hospitality industry, with immense potential for growth within the religious tourism segment. Dur leverages its decades of on-the-ground experience to bring a high-quality, familiar, and trusted ‘feel’ to visiting pilgrims with “Nur by Makarem” while making the conversion process relatively simple for hoteliers to join in on this unique opportunity.

Interested hotel owners can visit https://nurbymakarem.com/ for more information or contact convert@nurbymakarem.com to receive a fully detailed plan for the hotel conversion process.