Dubai: Citymax Hotels, a UAE-based hotel chain, wants to expand into Saudi Arabia to cash in on rising demand for three- and four-star hotels, according to a top executive.

The company, with three properties in the UAE, looks to open 15 mid-market hotels over the next five years across the kingdom, including Jeddah, Riyadh and secondary locations such as Buraidah, Abha and Yanbu, said Russel G.H Sharpe, its chief operating officer, in an interview on Wednesday. “Tourism will grow [in Saudi Arabia] ... there is a need for both leisure and business hotels ... the west coast of Saudi Arabia has a number of locations where Citymax hotels would be ideal,” he said.

The hotel chain is already in discussions with potential joint venture partners to enter the Saudi hospitality market, he said, declining to give further details. It is considering having hotels linked to shopping malls and near airports in the kingdom.

Saudi Arabia last month announced national reforms aimed at boosting revenue from non-oil sectors like tourism and mining.

Elsewhere, Citymax, part of Landmark Group, is eyeing hotels in Dubai’s Al Qusais and International Media Production Zone (IMPZ) areas and an entry into Indonesia, according to Sharpe. Pipeline

It has three hotels with a total of 800 rooms in the UAE pipeline — all scheduled to open in 2017. These will be located in Al Barsha and Business Bay in Dubai and Ras Al Khaimah. Citymax also expects to open a hotel in Alexandria, Egypt, in the fourth quarter of 2017.

In terms of the company’s performance, occupancy rates edged up to 92 per cent in the first quarter of this year, from 90 per cent during the same period in 2015. However, room rates were down 6 per cent year-on-year, Sharpe said.

A combination of more hotel rooms and fewer tourists from certain markets have put pressure on room rates in Dubai, which were down 10.1 per cent year-on-year in the first quarter of this year, according to a report from research firm STR.

Sharpe expects the company’s profitability in the current financial year ending June to be “levelled out” compared to the previous year due to the pressure on room rates.

Citymax recently repositioned the brand to appeal more to millennials and plans to increase its marketing budget for the next financial year (July 2016-June 2017) by 20 per cent, focusing on digital marketing campaigns, he said.

“As we move into 2020, customer needs are changing. We have to adapt the product to customers’ needs to ensure we’re still competitive,” he said.