SAUDI ARABIA is anticipated to see rapid growth of its hospitality sector, thanks to a significant influx of upcoming projects, according to a report by the National Commercial Bank (NCB).

The kingdom has more than SR20 billion ($5.33 billion) worth of hotel projects in the pipeline and under execution and is ranked as 62nd most competitive out of 140 countries and seventh in the region in the World Economic Forum’s (WEF) latest travel and tourism competitiveness report, the NCB’s Semi-Annual Sector Review states.

With a range of infrastructure projects stemming from favourable public spending policies, ambitious Saudi Commission for Tourism and Antiquities (SCTA) targets, combined with solid market fundamentals, the kingdom has the largest hotel pipeline in the region and is expected to witness the highest growth during the medium-term.

The hotel industry is one of the fastest growing non-oil sectors in the kingdom, and the second best performing real estate market this year after residential real estate, says the report.

Saudi Arabia is also witnessing an increase in international brands with Hilton Worldwide, Marriott International, and Starwood owning the highest number of projects in the pipeline.

Madinah’s market is catching up with demand as room rates are increasing while ocupancies remain high.

The pressure on Makkah’s market is gradually easing with significant supply deliveries such as the Jabal Omar development, one of the largest hotel developments in the world consisting of around 27 hotels, and the Jabal Kaaba, together delivering a cluster of hotels with a total of 8,500 rooms.

After periods of contraction, Riyadh’s market has stabilised with landmark properties such as Damac Towers and Kempinski Burj Rafal under way.