Riyadh – Mubasher: The hospitality sector in the capital of Saudi Arabia is expected to see 2,500 new hotel rooms in 2019.

This addition should bring the total number to 16,000 rooms in Riyadh, while the future supply is expected to increase by 52% in the coming five years, according to the latest real estate report by KPMG Al Fozan & Partners, a leading audit, tax and advisory services provider in Saudi Arabia.

During 2018, a total of 1,700 keys entered the market in the 3-, 4- and 5-star categories across Riyadh.

KPMG believes that despite the growing occupancy rates, up 6% to 53% in 2018, the average daily rate (ADR) and revenue per available room (RevPAR) declined by 10% and 8%, respectively.

Head of real estate at KPMG Al Fozan and Partners Firas Hassan commented: “We expect limited improvement in performance in 2019 compared to last year, as supply continues to increase, occupancy levels and ADR decline moderate and heavy reliance on business travellers.”

Recovery of the real estate market in Riyadh is expected to be driven by the hospitality and leisure sectors. despite various investment opportunities offered in the leisure and entertainment sector.

KPMG’s latest real estate report also noted that Jeddah's hospitality market is expected to receive over 4,000 new hotel rooms in the coming three years.