The start of 2018 will see the arrival of the Fairmont Brand in the city. In addition to this, a Hyatt Regency, the Hilton Granada and a luxury boutique Hotel called Nobu, will open their doors. The second half of 2018 will see the appearance of a Sofitel, all of which will continue to challenge and dilute market share in a dynamic where supply growth will exceed demand, and in an economy that will not see growth until late 2019. (See Market Supply Chart).
Each separately, the Strategic Plan contains the following:
1. A Status Quo outlook that represents a baseline forecast assuming no major renovation or strategic positioning.
2. A scenario reflecting the construction and revenue producing potential of a Ladies Spa and Wellness Center.
3. A scenario providing displacement impact, revenue impact and approximate renovation time-line for the Kingdom Ballroom and Meeting Room Event Space.
4. A scenario providing displacement impact as well as occupancy, ADR and RevPAR impact for a Room Renovation with construction time-lines.
5. A combined revenue and displacement study built on the assumption of running all projects almost concurrently.
6. Calculations providing the cost of projects and Return on Investment (ROI).
Erosion of occupancy and RevPAR year-over-year: Occupancy declines to a plateau of 57% in 2019, while RevPAR reduces from SAR1005 in 2016 to SAR 730 in 2022. ADR erodes from SAR1684 in 2016, to SAR 1289 in 2022.
Four Seasons Hotel Riyadh As Status Quo
The construction of a Ladies Spa and Complex assumes demolishing and change use of the existing Bridal Suite. The works involve major structure alterations and a new structure steel frame to cover the courtyard area.