A conversion project, estimated at US$8 million, funded by existing cash and debt facilities.
April 28 2015: Action Hotels, a leading owner, developer and asset manager of branded three- and four-star hotels in the Middle East and Australia, announced the addition of a three-star hotel in Saudi Arabia's capital city, Riyadh.
The 130-bedroom property is in a prime location on Olaya Street in the Olaya district, the fast-growing financial and hospitality heart of Riyadh City. The hotel will be developed by the conversion of an existing office building in just over twelve months.
According to Alain Debare, CEO, Action Hotels, there is a limited supply of quality, internationally-branded economy and midscale hotels in Saudi Arabia.
'There is great potential for Action Hotels in the Kingdom, and in Riyadh in particular. Although the Riyadh hotel market is a mature market, there is considerable demand for mid-economy branded hotels from the corporate segment, yet this segment is currently under supplied,' he said.
Indeed, recent reports suggest that Riyadh has seen a sharp rise in RevPAR since 2008, achieving one of the highest Average Daily Rates in the region during 2014 (STR Global, March 2015).
The conversion project is scheduled to open in Q2 2016, at an expected project cost of approximately US$8 million. Debare indicated that this will be funded by existing cash and debt facilities available to the Group.
He went on to confirm that Action Hotels has signed a 20-year operating lease agreement, and is finalising the terms of a long-term management agreement with a leading hotel brand, with an announcement expected shortly.
The addition of this hotel in Riyadh brings the committed development pipeline from Action Hotels to a total of nine hotels with 1,514 rooms and a combined operating hotels and committed pipeline of 3,002 rooms. This is an increase of 19 per cent in rooms above the 2,516 rooms committed at the time of Action Hotels' IPO, in December 2013 (AIM:AHCG).
His Excellency, Sheikh Mubarak A. M. Al Sabah, founder and Chairman of Action Hotels stated; “We are proud to announce this primely located addition to the Action Hotels portfolio. Saudi Arabia is an attractive market for us, being the largest country in the region and having recently undertaken a widespread, long-term strategy for non-oil economic diversification
driving business travel. This new hotel is a great addition to Action Hotels’ portfolio and the prime location of the property is a very strong statement for our first hotel in Saudi Arabia’s capital city.”