BLEISURE AND HOTEL WORKSPACES: THE NEW NORMAL
The country has embarked on a transformative journey to diversify its economy and reduce dependence on oil, with tourism playing a crucial role in this strategy. Thanks to Vision 2030, tourism in Saudi Arabia is experiencing significant growth. Over the last two years, remote work has become increasingly prevalent throughout the world. And evidence suggests that it is more than just a passing trend.
With the lines of work and personal lives blurred, remote work is giving rise to another trend in hospitality and leisure; bleisure.
The concept of "bleisure" travel has gained significant traction as professionals now seek ways to merge their business obligations with leisure experiences. This emerging trend reflects the growing desire among travellers to maximise their time and make the most of their business trips by incorporating moments of relaxation and exploration.
The Saudi hospitality industry recognises this evolving demand and hotels in KSA are capitalising on this trend by transforming themselves into remote working hubs with high-speed internet, an element which has a direct impact on a hotel’s performance with this segment of travellers. Hospitality groups can also leverage this trend by creating comprehensive packages combining business facilities with recreational activities, allowing attendees to extend their stay and explore the destination beyond work obligations.
By providing a seamless integration of work and leisure experiences, the Saudi hospitality industry can attract and retain a diverse range of guests, thereby contributing to the growth and development of this market sub-segment.
PRIORITISING HEALTH AND WELLBEING: A NEW TRAVEL TREND
For today’s consumer, travel is now more than just a good stay. It has become an important part of wellbeing. Although the pandemic is behind us, it has brought the importance of wellness into sharp focus.
Today, the wellness industry is experiencing a remarkable transformation, becoming a thriving USD 1.5 trillion per year market that is growing by 5-10% per annum. Consumers across the world are more willing to spend on products and services that promote wellness.
Moreover, international wellness tourists tend to spend 35% more on average compared to traditional leisure tourists. This spending disparity can be attributed to the premium placed on wellness experiences, which often involves higher-end accommodation, specialised treatments, and exclusive wellness facilities.
This presents a profitable opportunity for the hospitality sector in Saudi Arabia. While traditional beauty and relaxation spa treatments, and standardised fitness services remain popular, there is also a rapidly growing demand for cutting-edge and personalised wellness plans.
Although the Saudi hospitality sector is making progress in its health and wellbeing focus, there is still more to be developed in terms of expanding and deepening the range of offerings and services. As the demand for wellness-oriented travel continues to rise, there are opportunities for the industry to further invest in and prioritise health and wellbeing to meet the evolving needs of travellers.
THE DIGITAL REVOLUTION: PERSONALISATION & CONVENIENCE
Hyper-personalised guest experiences are now more important than ever. Digital and contactless services, such as mobile check-ins, contactless payments, voice control, and biometrics, have increased in popularity.
Leisure and hospitality businesses in Saudi Arabia recognise customers' need for seamless tech-powered experiences. With the Kingdom at the centre of the flurry of activity in hospitality and leisure, Saudi hotels can incorporate VR, AR, and IoT technologies to offer better guest experiences and derive valuable data to offer more tailored and personalised experiences. 71% of customers expect businesses to provide hyper-personalised experiences based on their specific preferences, behaviours, and needs.
VR simulations offer captivating customer experiences during the booking process, providing guests with a comprehensive preview of what awaits them. On the other hand, AR technology enhances guests' on-site experiences by adding practical and entertaining elements to the property, elevating their overall stay.
Within hospitality, the Internet of Things (IoT) can be used to integrate services, and offer guests automated control of everything from door locks to light switches, window blinds and more, conveniently from their mobile devices. IoT is enabling operational efficiency and much higher levels of personalisation through the real-time customer data that it collects, which can be analysed to reveal habits, routines, and preferences to provide hyper-personalised guest experiences.
Robots are also expected to become more commonplace in hospitality. YOTEL’s ROBO Hotel in Saudi Arabia based in Oxegon, NEOM, is opening its doors to the public in 2025 and will feature robots, smart beds, and a plethora of other high-tech options.
Hospitality businesses in Saudi Arabia can prepare for the adoption of emerging technologies by taking a number of proactive steps. Firstly, existing hospitality venues should invest in infrastructure upgrades and ensure reliable connectivity to support the implementation of these technologies.
Secondly, fostering a culture of innovation and digital literacy among staff members is crucial, as it will enable them to embrace and utilise these technologies effectively, once they are implemented. Thirdly, businesses should collaborate with technology experts to explore practical applications of AI, IoT, AR, and VR in enhancing guest experiences and optimising operations.
And finally, hospitality leaders should conduct pilot projects and gather feedback from customers to help refine the integration of these technologies and ensure they align with the specific needs and preferences of the customers they serve.
SUSTAINABILITY: A RISING DEMAND IN THE HOSPITALITY INDUSTRY
Sustainability is a big trend in hospitality. An increasing number of consumers are opting for hospitality brands that embody responsible - and genuine - ‘green’ business practices. They are more aware of 'greenwashing' - ideas and practices that are packaged as 'environment-friendly' but aren't - and seek the real deal.
On the other hand, a growing number of hospitality leaders are adopting circularity within new projects or retrofitting existing properties to meet sustainability standards. For new and upcoming hospitality venues, eco-conscious decisions are being made at the design and construction stages.
Real estate developers in Saudi Arabia can play a key role in promoting sustainable development for the hospitality industry by prioritising eco-friendly practices at the earliest development stages. These can range from utilising passive design strategies to maximise natural light, optimising building orientation for solar heat gain and shading, promoting natural ventilation, using energy-efficient materials, implementing renewable energy sources, and adopting sustainable water management systems.
Developers can adopt and encourage the use of green building certifications and standards to ensure that hospitality properties meet stringent sustainability criteria. Contrary to popular belief, LEED-certified ‘green’ buildings may cost only one to two percent more than their ‘brown’ counterparts - an additional expense that is recovered many times over in long-term cost savings.
By taking these steps, real estate developers can contribute to a more sustainable and responsible hospitality sector in Saudi Arabia while meeting the growing demand for eco-conscious travel experiences. For existing properties, the focus should be on using renewable energy to power their enterprises, reduce consumption and waste, and adopt circularity wherever possible. These may take considerable upfront investment and resources to implement, but this is a positive step toward lowering their carbon footprint and long-term cost savings.
Data revealed by Booking.com confirmed that over 53% of global travellers want to travel more sustainably in the future. Saudi Arabia is setting a new sustainability precedent with its giga-project NEOM, worth USD 500 billion, which will run on 100% renewable energy and become the first project of this scale to do so.
INSIGHTS AND CONCLUSIONS: A BRIGHT FUTURE FOR THE HOSPITALITY SECTOR IN SAUDI ARABIA
Saudi Arabia’s hospitality market presents many opportunities for agile and tech-forward market innovators. The domestic tourism sector will play a significant role in driving the success of Saudi Arabia's thriving hospitality market. At the time of publication, the sector is thriving, with almost 65% of Saudis travelling within KSA anywhere from once to thrice a month. Another notable trend is KSA’s young population, two-thirds of which is aged below 35 years.
To cater to diverse travellers, developers need to offer a wide range of experiences, spanning from luxury options to budget-friendly youth hostels, ensuring there is something to suit every type of traveller. Presently, only 17% of the hotel supply stock falls under the 3-star category.
Original brands and niche concepts will be in higher demand from both local and international tourists. This will result in more authentic and meaningful cultural experiences for guests, increased brand loyalty, and promotion of local culture and content.
Currently in Saudi Arabia, the real estate and infrastructure development pipeline is worth USD 1 trillion, out of which USD 21.3 billion is the total development cost of non-giga projects. This accounts for only one-third of the Kingdom’s total expenditure. At least 50% of these projects are expected to become operational by 2028.
This points towards the ambitiousness of Saudi Arabia's 2030 vision which aims to attract 100 million visitors by 2030. Apart from unlocking promising hospitality investment opportunities, in the coming decade, KSA is set to transform the country's landscape and redefine tourism.
To know more about Saudi Arabia's tourism and hospitality market, including valuable insights and in-depth analysis, we invite you to download the complete report. Discover the opportunities, trends, and potential for growth in this thriving sector as Saudi Arabia continues its ambitious journey towards Vision 2030.
