Riyadh’s reality

As oil prices continue to slide, causing an unexpected slowdown in travel from the petrochemical industry trade segment, and as new state-of-the-art hotels continue to open unabated here in the Saudi capital, Riyadh, with 30 hotels and 6,000 new rooms expected to come online within the next two to three years, hotel investors, owners and managers are becoming increasingly concerned with both oversupply situations. As a result, they are making strategic and tactical adjustments to their five- and 10-year sales, marketing and profit development plans.

This current softer outlook is very different from my previous two years stay in the Kingdom, from 2004 to 2006, when oil prices were robust and Riyadh hoteliers were enjoying the rich rewards from a strong demand. At that time, hotels were limited in number, especially in the 5- star segment, of which there were only four international brands with 800 rooms and suites.  

So, faced with the inevitable looming price war as new hotels open almost daily with heavy operating costs and a limited supply of guests, our team is now looking at ways to improve our market share the good old fashioned way, which is to improve our people, products, prices and profits in that order. It will make us even more competitive with our current and future competitors, many of whom fly the flags of leading global brands similar to ours.

More about our progress in the weeks and months ahead as the competition and the weather heats up. In the meantime, my number one priority since arriving here in mid-December has been, and still is, to attract and hire our fair share of Saudi hospitality graduates. This task has always been difficult in the Kingdom as the hotel industry has not traditionally been the preferred career choice for young Saudi’s migrating to the workforce from local and overseas universities.

But thankfully, that is now changing, as evidenced by the large numbers of male and female Saudi graduates who attended and submitted applications during our own recently held career fair, the result of which has seen 50 young Saudi hospitality leaders of the future sign up for various positions in our marketing, social media, public relations, wedding sales, government sales, and front office departments. In the kitchen, we signed up our first-ever Saudi apprentice chef, who will eventually become responsible for producing and showcasing Saudi food specialties for our local and foreign guests after a suitable period of training.

I also met a young Saudi applicant named Salman, pictured at left, who is a hospitality graduate with honors and has trained in several of our hotels in London, Paris and Dubai, and quickly signed him up as a trainee hotel manager and as someone who will be receiving my personal training and mentorship over the next several years. We are all working together to emerge from this temporary financial crisis, which no one predicted 12 months ago as the price of oil and our room rates were heading sky high.