As Riyadh’s hospitality sector expands at pace, operators face the challenge of absorbing new supply while meeting the evolving expectations of business and leisure travellers.

Firas Mneimneh, general manager of Radisson Collection Residences, Riyadh, discusses the rise of luxury serviced residences, the growing convergence of business and leisure travel, and why differentiation, Saudi identity and sustainable profitability will define the market’s next chapter.

Riyadh is seeing an extraordinary amount of new hotel supply coming into the market. Are you confident demand is growing quickly enough to absorb it?

I would say we are cautiously confident. Riyadh is experiencing an exceptional level of new hotel supply, so there will undoubtedly be some short-term pressure on occupancy and rates. However, we believe the underlying demand drivers remain very strong, supported by Vision 2030, business and government activity, the regional headquarters programme, major events and growing tourism.

The key is that demand will not necessarily absorb all new supply immediately. We expect a period of normalisation and increased competition in the near term, with performance increasingly differentiating between well-located, well-positioned assets and more commoditised hotels.

So, rather than assuming the market will absorb supply across the board, our confidence is based on the quality and resilience of demand growth relative to the specific location, segment and positioning of the hotel.

You’ve chosen a serviced-residence model rather than a conventional luxury hotel. What does that tell us about how the profile of visitors coming to Riyadh is changing?

I think it tells us that Riyadh is evolving from a city people visit into a city people increasingly spend time in.

The traditional luxury hotel model is built around transient travellers: a few nights, meetings, dining and then departure. But Riyadh’s transformation is creating a much broader demand base: executives relocating for regional headquarters, consultants and project teams, government and corporate visitors, and families who may be in the city for several weeks or months.

That changes what people value. They still want five-star service, but they also want space, privacy, flexibility and the ability to live normally while they are here.

So, I wouldn’t describe serviced residences as a compromise from a luxury hotel. I see them as a more relevant luxury product for the next phase of Riyadh’s growth.

And importantly, it gives us access to a different demand pool and potentially a more resilient revenue profile, because we’re not relying entirely on short-term transient demand.

Riyadh’s recent hotel performance has shown that new supply can put pressure on conventional hotel occupancy and rates, which makes having a differentiated demand proposition even more important.

Ultimately, the bet is that as Riyadh becomes a regional business and investment hub, the definition of a luxury stay will increasingly be about how well you can live in the city, not just how well you can stay in a hotel.

Who is actually driving your business today — Saudi guests, international executives, government-related travel, consultants, families or longer-term corporate residents? And has that mix surprised you at all?

What has been interesting is that it’s not one single customer segment driving the business. The mix is broader than we initially expected.

We see a strong base of corporate and professional demand — executives, consultants, project teams and government-related business — but increasingly we are also seeing families and guests who are staying for longer periods. That is particularly relevant to a serviced-residence model because the same unit can serve very different needs: a senior executive on a long assignment, a relocating family, or a project team that needs a home rather than simply a hotel room.

What has surprised us is the degree of overlap between these segments. Someone may initially come to Riyadh for business, but the nature of their stay becomes much more residential. They extend, bring family or return repeatedly.

I think that is an important signal about where Riyadh is heading. The city is developing a much deeper and more permanent business ecosystem, rather than relying purely on short-term visitors. Corporate demand remains a major driver of Riyadh hospitality, particularly around the regional headquarters programme, while the market is also seeing increasing domestic and leisure demand.

So, if I had to summarise the shift, we’re not just accommodating visitors to Riyadh; we’re increasingly accommodating people who are becoming part of Riyadh. And that is exactly where we think the serviced-residence model has an advantage.

Riyadh has traditionally been a heavily business-driven hotel market. As the city develops its entertainment, events and tourism offering, how quickly are you seeing the leisure segment become meaningful?

I think the leisure segment is becoming meaningful faster than many people expected, but I would still describe Riyadh as a business-led market with an increasingly powerful leisure layer.

What has changed is the frequency and scale of reasons to come to Riyadh. Events, concerts, sports, dining and entertainment are creating more weekend and short-break demand, both domestically and internationally. Riyadh Season, for example, attracted 17 million visitors in its latest edition, which gives you a sense of how quickly the entertainment ecosystem is scaling.

But I don’t think the story is that Riyadh is suddenly becoming a traditional leisure destination. The more interesting story is that business and leisure are starting to overlap. Someone who comes for a conference may extend for an event; an executive may bring their family; and a business trip can increasingly become a broader lifestyle experience.

That’s particularly relevant for us as a serviced-residence operator. The ability to accommodate a couple of nights, a weekend extension or a several-week stay means we can participate in that changing demand without being dependent on one segment.

So, I would say leisure is already meaningful, but the real opportunity is the convergence of business, events and leisure. As Riyadh’s calendar and destination offering mature, I expect that blended demand to become an increasingly important part of the market.

There are now some of the biggest luxury hospitality brands in the world entering Riyadh. In such a competitive market, what does a hotel actually have to do to command a premium rate rather than simply compete on location and brand name?

I think the days when a hotel could command a premium simply because of its brand name are becoming less relevant in Riyadh. With so many internationally recognised luxury brands entering the market, guests have more choice than ever.

To command a genuine premium, a hotel must give the guest a reason to choose it beyond the name on the door. That comes down to three things: a distinctive sense of place, exceptional and consistent service, and an experience that feels genuinely difficult to replicate.

For us, that also means understanding the Riyadh customer rather than simply importing a global luxury formula. The winning properties will be those that combine international standards with a strong understanding of the local market, how people live, entertain, work and spend their time.

And I think this is increasingly important because Riyadh already has strong pricing power, but the rapid arrival of new supply is putting more pressure on operators to differentiate.

Ultimately, a brand can get you considered; it can’t guarantee you a premium. The premium must be earned every day through the product, the service and the experience.

For me, the real test is very simple: if you took the logo off the building, would the guest still be willing to pay the same rate? If the answer is yes, you’ve created a genuinely valuable hotel.

This is being billed as Saudi Arabia’s first Salmani Architectural Tower. How do you translate Saudi identity into the guest experience without it becoming something superficial or simply decorative?

For me, the key is that Saudi identity cannot just be something you see; it must be something you feel.

Salmani architecture is fundamentally about finding a balance between authenticity and modernity, rather than recreating the past. So, the same principle should apply to the guest experience.

We can use local materials, patterns, craftsmanship and references to Najdi architecture, but if that is where the story ends, it becomes decoration. The more important question is how Saudi culture influences the way the guest is welcomed, how spaces are designed, how people gather, how privacy is respected, how food and service are presented, and how the property connects guests with Riyadh itself.

For us, architecture gives the building its identity, but hospitality has to give that identity meaning. A guest should be able to recognise that they are in Riyadh without us having to explain it to them.

And I think that is the real opportunity with a Salmani tower: to create something unmistakably Saudi, but at the same time completely contemporary and globally relevant. That balance is what makes the identity authentic rather than nostalgic.

Ultimately, we don’t want guests to leave saying, “That hotel had Saudi decorations.” We want them to leave saying, “That could only have been Riyadh.”

Riyadh itself is changing incredibly quickly — new districts, infrastructure, businesses and a rapidly growing population. From where you sit, what has been the biggest change in the city’s hospitality market over the past two or three years?

I think the biggest change is that Riyadh has moved from being a strong business hotel market to becoming a much more diversified destination.

Three years ago, the conversation was largely about corporate travel, government business and the shortage of quality hotel rooms. Today, we’re talking about a much broader ecosystem: international companies establishing themselves here, major events, entertainment, dining, tourism and increasingly guests who are coming to Riyadh for the experience as much as for business.

You can see that transformation in the scale of new supply. Riyadh had roughly 25,000 hotel rooms at the end of 2024, with another 16,000 expected by 2030. At the same time, the market is seeing a significant increase in luxury and international-branded supply.

But perhaps the biggest change from our perspective is the sophistication of the customer. Guests have far more choice now, and their expectations are evolving very quickly. They are comparing Riyadh not just with other Saudi cities, but with the best hospitality experiences globally.

So, the market has become much more competitive, but also much more interesting. Riyadh is no longer simply adding hotel rooms; it is building an entirely new hospitality ecosystem. The challenge for operators is making sure the product evolves at the same speed as the city.

Saudi Arabia has ambitious targets around tourism as part of Vision 2030, but ultimately hotels have to produce returns for their owners. What metrics are you watching most closely to judge whether Riyadh’s hospitality boom is translating into sustainable business?

Ultimately, I think the test is whether top-line growth is translating into durable profitability, rather than simply whether we can fill rooms.

We watch the traditional hotel metrics very closely — occupancy, ADR and RevPAR — but I would put even more emphasis on the relationship between them. If occupancy is growing only because we are discounting rates, that is not healthy growth. Equally, a high ADR is not meaningful if it comes at the expense of occupancy.

The other metrics I would focus on are GOP margins, flow-through, cost per occupied room, length of stay, booking mix and repeat business. Those tell you whether the demand is genuinely high quality and whether the asset is becoming more efficient as it matures.

And in a market like Riyadh, I would add one more metric: how much new supply the market can absorb without permanently losing pricing power. That is probably the biggest test over the next few years. Riyadh has already seen pressure on occupancy and RevPAR as new supply has come into the market, so simply pointing to rising tourism numbers isn’t enough.

For us, the ultimate measure is therefore cash flow and return on invested capital. If demand is growing, rates are holding, margins are improving and the asset is generating an attractive return despite the additional competition, then I would say the hospitality boom is translating into sustainable business.

So, I would summarise it quite simply: we’re not measuring success by how many people come to Riyadh; we’re measuring it by the quality of that demand and the returns it generates.

Talent is one of the biggest challenges facing a hospitality sector expanding at this speed. How difficult is it to recruit and retain enough people, and how important is developing Saudi nationals into management and leadership positions?

It is certainly a challenge, because the hospitality sector is expanding at a pace that the traditional talent pipeline cannot fully match. But I see that as one of the most important opportunities created by the transformation of the Kingdom.

For us, the objective isn’t simply to recruit enough people to operate the hotel. It is to build a generation of Saudi hospitality professionals who can eventually lead the industry.

That means creating genuine career paths, bringing Saudi nationals into the business early, giving them exposure to different departments, investing in training and international experience, and most importantly giving them real responsibility rather than treating Saudisation as a headcount exercise.

I think the market is moving in the right direction. Recent research shows that Saudi employers are increasingly investing in upskilling, while employees place a very high value on development and opportunities to build transferable skills.

And I think leadership development is particularly important. You can recruit an experienced international hotelier today, but the long-term success of Saudi hospitality depends on transferring that knowledge and creating local leaders who understand both international hospitality standards and the Saudi guest.

So yes, talent is one of the biggest constraints on growth. But I would frame it positively: the goal isn’t to solve a talent shortage; it is to turn hospitality into one of the sectors that creates Saudi talent.

If we can do that successfully, then we’re not just building hotels, we’re building an industry and a leadership pipeline that can sustain the Kingdom’s hospitality ambitions well beyond Vision 2030.

If we came back five years from now, how different do you think Riyadh’s hotel market will look — and do you ultimately see it competing with cities such as Dubai, London or Singapore for international business and luxury travellers?

Five years from now, I think Riyadh will look fundamentally different from the market we know today. It will be a much deeper hospitality market, with a far broader range of international brands, luxury experiences, serviced residences, entertainment, events and business infrastructure.

The scale of investment is extraordinary. Saudi Arabia is currently heading toward more than 281,000 hotel rooms by 2030, with Riyadh one of the principal markets for that growth. At the same time, the city is attracting major international hospitality brands and developing the infrastructure needed to support a much larger international visitor base.

But I don’t think the ambition should be to simply “compete with Dubai.” Riyadh has the opportunity to become something different.

Dubai is an established global tourism and business destination. Riyadh is building its proposition around something broader: a global business capital, a centre of government and investment, and increasingly a destination for culture, entertainment, sport and luxury. That combination is quite unique.

And I think the next five years will be less about proving that people can come to Riyadh and more about giving them compelling reasons to choose Riyadh, and then stay longer, return more frequently and potentially relocate here.

So yes, I absolutely see Riyadh competing for international business and luxury travellers. But the real measure of success won’t be whether we become the next Dubai, London or Singapore.

It will be whether, five years from now, Riyadh is itself a city that international travellers and businesses feel they cannot afford to ignore.

That, to me, is the much bigger opportunity.