Riyadh: Saudi Arabia is starting a 1.5 billion riyal ($400 million) fund to expand the hospitality brand - Habitas - across the kingdom.
The hotel and events company, which has its roots in creating camps at the Burning Man festival in the Nevada desert, plans to have as many as six new properties throughout the kingdom, in addition to two existing ones. The details aren’t finalized, but sites could range from the Red Sea coast to the inland capital of Riyadh. The aim is to attract new international visitors to Saudi Arabia as well as locals that haven’t done much domestic traveling.
“What’s amazing about the kingdom is just how diverse the geography is,” CEO Oliver Ripley says, adding that the investment in infrastructure has opened up much more of the country to potential visitors. “A lot of these locations were difficult to access, or access was until recently restricted for religious reasons.”
The funding will be anchored by the Saudi Tourism Development Fund, or TDF, which was established in June 2020 with an initial pot of 15 billion riyal to finance the industry’s growth. The kingdom’s goal is to more than double the number of tourists, to 100 million annually by 2030, including domestic travel, and increase tourism’s share of the economy from 3 per cent to 10 per cent, according to a document on the fund’s website. A spokesman for the TDF declined to answer questions for this story.
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Saudi officials have said they’ll commit at least $1 trillion creating enticing destinations in the country and expanding the tourism industry. The Habitas investment, ventures such as a new luxury airline, and a $500 million e-sports destination are part of the broader strategy. Saudi Arabia has almost 99,000 hotel rooms in the pipeline from various stages of development, according to figures from April from hotel data company STR.
TDF has already made agreements with companies as large as Hilton and as small as a Dubai startup called Envi Lodges to create additional lodging. The Saudi fund often provides financing and receives an ownership stake in a string of planned hotels; the hotel companies license their brands and manage the operations.
The planned Habitas fund is the same size as one set up for Accor’s Ennismore collection, which agreed to develop 10 to 12 hotels with 150 to 200 rooms each - though that deal spans several individual hotel brands. TDF has committed 10 per cent - or $40 million - to the fund so far and will own the properties, an Ennismore spokesman said. As for Habitas, the company will likely build one property on the Red Sea on the country’s west coast and another near Jeddah, with Riyadh as a possible third spot, Ripley says. He anticipates that visitors will come for as little as three or four days or as long as two weeks and will travel in a circuit between the hotels in an experience called “A Journey of Discovery Through Saudi Arabia.”
Hotel circuits are becoming increasingly popular with travelers who want to see a swath of a country and have varied experiences while staying within one brand’s familiar confines - with all the transfers and logistics sorted out. Habitas’ circuit, if completed, could be one of the most comprehensive in the world.
Habitas - a company that grew out of camps at Burning Man and has a manifesto for “like-minded souls” - with the six newly announced locations, 40 per cent of the company’s current and upcoming properties will be in the kingdom. So far, it has found some success in Al-Ula, a desert oasis in northwest Saudi Arabia where it opened a boho-luxe property with a mixed-gender infinity pool in 2021. Ripley says Habitas AlUla is 60 per cent full in the summer. Of those who are coming, about 80 per cent are local.
