This year’s conference theme for the Future Hospitality Summit Saudi Arabia (FHS) is ‘Invest in Change’, highlighting the importance of the positive change that can be brought forward through the investment in time, intellect and expertise in the hospitality industry to keep up with changing times and trends to better shape the future of the industry. In the lead up to the event we asked a number of industry partners how they are investing in change.

The global hospitality industry is expected to perform strongly in 2023 due to fast-growing travel demand. The optimistic outlook is also buoyed by the hospitality sector’s impressive turnout in 2022, with an estimated global contribution of $8.6 trillion, 6.4% below pre-pandemic levels, according to the World Travel and Tourism Council. Meanwhile, the Middle East’s tourism market is anticipated to fully bounce back to pre-pandemic levels this year, up from the 83% recovery achieved in 2022.

As one of the leading regional markets, Saudi Arabia is at the center of this activity. The resumption of the Hajj pilgrimage has been a critical factor in the recovery. The budding national plans to stimulate tourism and spark business growth in the capital and beyond will play a vital role in the anticipated growth.

While continuing to grow into a popular business and leisure hub for millions of visitors worldwide, Saudi Arabia is also becoming a preferred destination for local travelers of all segments. In 2022, the Kingdom recorded over 77 million domestic tourists, compared to 63.8 million the year before.

Today, Saudi Arabia’s hospitality businesses seek to harness this unprecedented momentum, exploring the ideal framework to channel their resources to more efficiently meet the market requirements in a way that recognizes and embraces the fast-changing global industry trends. By investing in innovation, hospitality leaders focus more on adapting to evolving consumer needs, simplifying operations, and streamlining customer experiences with enhanced scalability.

Fundamentally, bringing digitalization and automation to the industry will generate value for all stakeholders. The digital-savvy consumer of our modern day anticipates seamless tech-powered experiences, from all-digital reservations to keyless doors and online room service. And as automation via advanced technologies such as AI, robotics, and IoT move forward to upscale the entire journey for guests, it will ultimately come a long way in driving satisfaction and loyalty.

Also, Saudi hotels are increasingly adopting digital solutions to optimize their services to be more customer-centric. These include systems that analyze data harnessed from customer interactions to extract meaningful insights that provide operators with critical information to tailor their offerings. For example, Saudi hotel owner, developer, and operator Dur Hospitality utilizes AI-based digital solutions to modernize interactions with guests. The group is also partnering with Smart Zone Real Estate Company to build an AI-powered hotel in Riyadh. From a broader perspective, prioritizing the quality of services in line with the latest tech advancements also serves the ambitious goals of Saudi Vision 2030 in terms of enhancing tourism offerings and accelerating digital transformation.

In parallel, digitalization is considered a key enabler for driving sustainability. With more consumers opting for hotel brands with clear-cut responsible business strategies, innovation is vital to meeting the growing needs of guests while creating value for the community. More Saudi hospitality leaders today are considering circularity in new developments and refitting existing properties to meet sustainability standards in conserving energy and increasing efficiency, reducing consumption, reducing waste, and using environmentally friendly innovative technology.

Beyond leveraging technology, Saudi hospitality leaders are innovating new concepts that will deliver value for diverse segments while ensuring the optimal use of resources. Long-standing hospitality companies are creating concepts and launching original local brands tailored to the needs of modern-day visitors. One example is Makarem, Dur Hospitality’s arm in Makkah and Madinah, which has launched several concepts to accommodate the requirements of different visitor segments, from niche concepts for luxury-seekers to a brand dedicated to three-star hotel conversions.

The targeted expansion of local brands through innovating differentiated concepts also provides guests from the Kingdom and the world with meaningful and authentic cultural experiences. These boutique hotels can play a significant role in increasing loyalty and augmenting social returns, positively promoting culture, boosting local content, and creating jobs.

To leverage Saudi Arabia’s fast-paced modernization, locally-born hotel brands can adjust their models and offerings and improve their competitiveness by rethinking priorities and placing innovation at the heart of business strategies. There are great opportunities for agile and tech-forward businesses to navigate the rapidly evolving market and expand at scale to create a more robust, future-ready hospitality industry.

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