International hotel brands open in Jeddah despite tough economic times
JLL recently released its Q3 2016 Jeddah Real Estate Market Overview report, which assesses the latest trends in the office, residential, retail and hotel sectors. The latest market summary report discusses the opening of two internationally branded hotels - the Movenpick City Star Hotel (228 keys) and the Centro Shaheen by Rotana (254 keys) - which adds to the burgeoning supply of quality branded midscale hotels in Jeddah. The opening marks the first property for Centro Shaheen by Rotana in Jeddah, while the Movenpick City Star Hotel is its third property in the city. A further two Movenpick properties are under construction and expected to open within the next three years.
Hotel occupancies in Jeddah have declined by 4% compared to the same period last year, but remain strong overall at 72%, according to the report. Unlike most other regional markets, average daily rates (ADRs) in Jeddah have also shown strong performance over the summer months (increasing by 5% compared to the same period last year) due to domestic tourism during the summer holidays and the Hajj pilgrimage in September.
However, a challenging economic backdrop amid low oil prices and government reforms continues to add to a slowdown across the residential, retail and office real estate sectors.