Mr. Abdullah Saad Al-Mogren
General Manager of Riyadh Palace Hotel
The five-star Riyadh Palace Hotel is what a white elephant in Saudi Arabia remains: an upscale hotel both owned and managed by Saudis. General Manager Abdullah Saad Al-Mogren was appointed to his current position in 2006, after initially joining the company in 1993. “I know of only five other Saudi managers of upscale hotels,” he says, “including the Intercontinental here in Riyadh. The hospitality industry is after all a rather new sector in the country, and the related skills are still scarce. Only this year is the first students graduating from the Tourism College, and for many Saudis hospitality is not the first study or career choice.”
The Riyadh Palace, one of the oldest hotels in the country, has been around for some thirty years and has been renovated in anticipation of the new season. The hotel is equipped with all facilities from a business centre to banquet and meeting facilities, a sports club, fitness centre, spa and swimming pool.
Located in the government sector of the capital, surrounded by ministries, the Chamber of Commerce and more recently shopping malls, it has traditionally catered primarily to government officials and their international guests, nowadays joined by a corporate clientele. After inviting a French hotel chain to manage the hotel for the first four years and teach the tricks of the trade to Saudis, the owners took over the management.
The hotel's 303 rooms and suites now enjoy an occupancy rate of 85%, and the Riyadh Palace regularly hosts conventions, symposia and other national and international events. “When we started out there were only a few hotels around: there was the Yamana, which was a government-owned guest house on the old airport road, the Marriott, and the Intercontinental, which was purpose-built by the Ministry of Finance to promote the hospitality industry at a time when nobody was prepared to invest in it,” says Al Moghren.
To the observer of today's booming hospitality industry in the country, such an attitude seems scarcely believable. Upmarket hotels are sprouting up in the country at a rate of one every two or three months. Expenditures by incoming tourists, after doubling to just under $8 million between 1999 and 2007, are projected to grow to over $11.3 million in 2012. Expenditure on hotels and restaurants, at around $4 million in 2007, is expected to more than double to $9.3 million in the same year.
Al Moghren is happy to see the tourist sector growing fast and receiving a boost with HRH king Abdullah's development efforts both in the sector itself and the economy in general. “But challenges remain,” he says, “particularly in terms of government assistance for the huge financial investments required to start up new hotels, which only start generating profits in the long term. The Saudisation quotas also add to the challenge. The required quota is 30%, but it is hard to find Saudis willing to do menial jobs like cleaning or waiting, while the required skills and education for higher-level jobs are still lacking.” He also quotes the widespread complaints about the challenging visa procedure and the underdeveloped MICE business. Regardless, business is brisk and the Riyadh Palace.
Our latest investment report on Kuwait was recently published in one of the leading Spanish dailies, ABC. FindMe in Kuwait explores the economic perspectives of Kuwait and the country´s future plans to compete with its fast developing neighbours. Once the leading country of the Gulf, Kuwait has remained silent for the past decade. And although many would like to see faster changes, Kuwait is moving, at its pace, to them. Inexorably. Learn about who is who in Kuwait and read what the leaders say about their own future in our upcoming release: FindMe in Kuwait Mobile app.
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