Al-Madinah recorded the highest room occupancy rate for luxury hotels and accommodations in the Kingdom during the second quarter of 2024, at 74.8%, Room rates at serviced apartments in the region also recorded the highest occupancy rate of 48.7%, reflecting the growing demand from Umrah pilgrims and visitors for high-rated hotels, luxury hotels, and smart hotels, as well as the promising investment opportunities in this vital sector in Madinah.
An economic report published by Medina Chamber of Commerce reported that the average daily hotel room rate in Medina reached 998.8 riyals during the second quarter of 2024, while the average daily rate for a hotel room in Riyadh was 998.4 riyals, in Makkah 634.5 riyals, in Tabuk 562 riyals, and in Al-Baha 377 riyals, respectively.
The report also indicated that the average daily rate for rooms in serviced apartments and other hospitality facilities during the same period was 304 riyals in Madinah, while the average room rate in the Eastern Province was 295.9 riyals, 266 riyals in Riyadh, 251 riyals in Makkah, 229 riyals in Jazan, and 218 riyals in Asir, indicating that these prices point to rising demand for both types of accommodation services in Madinah, driven by the growing number of visitors—particularly pilgrims performing Hajj and Umrah—and the rising market value of hospitality activities in the region.
The report noted that visitors’ preference for hotels over serviced apartments presents an opportunity to invest in the development and improvement of hotel apartments and hospitality facilities by offering innovative services, competitive pricing, and targeted marketing programs, as these are among the most promising investment opportunities in the region’s tourism and hospitality sector, noting that Madinah is home to more than 1,500 historical and heritage sites, which provides opportunities for investment in the development of new tourist destinations such as museums and cultural centers that reflect Madinah’s history and Islamic heritage.
The report highlighted a rise in business registrations within the tourism and accommodation sectors, travel agencies, tour operators, and wedding venues during the year 2024, increasing from 2,700 business registrations in January 2024, to 3,381 in December of the same year. It attributed the rise in registrations to government support aimed at promoting tourism and serving the guests of Allah, as well as major investments in the tourism sector—including hotel projects, transportation, and hospitality, as well as increased demand for travel agencies and hotels in line with improvements in transportation services and infrastructure, and the trend toward organizing Umrah trips and visits to historical sites, all of which supported the growth of commercial registrations in the tourism sector.
He added that the growth in business registrations in the sector reflects the expansion of luxury hospitality and smart hotels, which has encouraged companies to enter the market, along with support for leisure tourism and conferences, the implementation of quality standards, the streamlining of investment procedures, and the launch of marketing campaigns to enhance Medina’s status as a tourist destination.
The report noted that providing budget and mid-range accommodations with high-quality services to visitors in Madinah at competitive prices is an attractive option that meets the needs of visitors with limited financial means, and constitutes one of the promising areas for investment in the sector. It added that the growing trend toward eco-tourism and sustainable tourism creates opportunities for investment in eco-friendly hotels and restaurants that rely on renewable energy and sustainable environmental practices, as well as the potential to invest in travel agencies, tour operations, tourist transportation, tour guide services, and the development of smart apps to enhance the visitor experience—such as providing instant hotel and tour booking services.