Jeddah, Jeddah corniche, Saudi Arabia
Jeddah Source: Arab News

Hotels located in Saudi Arabia's Jeddah are expected to record their highest occupancy rate in three years this month, Arabian Business reported

This is according to preliminary July data for the city recently released by STR, a firm specialized in the statistics of hospitality sectors. The new data indicates that during the month of July, hotels in the Saudi city "reported a 7.3 percent increase in supply against a 9.5 percent rise in demand." 

Could the spike in July be due to the fact that much of the hype around Jeddah Season festival took place in July? We can't forget that the city's biggest music festival to date took place that month. This is all speculation as the firm did not pinpoint the exact reason why hotels experienced an increase in bookings. 

But, based on these numbers, STR has predicted that the occupancy rates in Jeddah hotels are set to rise 2.1 percent to reach 76.8 percent — which would potentially be the highest level to be recorded since August 2016.

Though STR's preliminary data revealed high occupancy rates, hotels witnessed a decline in average daily rates as well as revenue streams in comparison with numbers registered in 2018.

However, analysts noted that although the specific figure rates were down, overall occupancy still held strong due to extremely high demand this season. 

The positive news comes at a time when the kingdom's tourism industry is soaring like never before. 

Saudi Arabia has been focused on developing its tourism industry

In previous years, the kingdom heavily relied on religious tourism for income from that sector but that looks like it's about to change in the coming decade. Saudi Arabian officials have already acted upon plans to bolster the sector, especially when it comes to leisure and entertainment-centered tourism. 

The country has been slowly opening its doors to international visitors. This is all part of Saudi Arabia's Vision 2030, which aims at pushing for greater cultural and entertainment opportunities in the kingdom. A key goal under the ambitious blueprint is to increase the number of tourists and revenues generated from tourism to 18 percent in the next 14 years. 

The kingdom is currently working on developing its Red Sea coast into a luxury beach destination governed by "independent laws." The project aims at transforming Saudi Arabia's Red Sea coastline into a global tourism hotspot, with luxury hotels and pristine beaches.

In December 2018, the kingdom launched a visa service for visitors for the motoring event Formula E and saw 1,000 tourists from 80 countries land in the kingdom. That same year, the Saudi city of Al-Ahsa was named the "Capital of Arab Tourism" for 2019.

In 2017, some Saudi travel agencies - classified in category D - were given the authorization to begin issuing travel visas. That same year, the kingdom announced it will begin issuing tourist visas in the first quarter of 2018. Formerly, visas were only available to pilgrims, business people with a local sponsor, and family members of residents. In 2019, the kingdom issued e-visas in just three minutes to all individuals who purchased a ticket to attend events held as part of the first edition of the Jeddah Season festival. 

While the biggest contribution to revenues generated from the kingdom's tourism industry continues to come from pilgrims performing Hajj and Umrah, it is expected to change over the coming few years.