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Buy U.S. Hotel Companies: Mecca Goes 5-Star

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Thursday, 28 June 2012
* Investors should Buy Starwood Hotels & Resorts, Hyatt Hotels and Intercontinental Hotel Group on dips as these groups expand aggressively into Saudi Arabia particularly Mecca

* The Haj is an Islamic prilgrimage that every able bodied Muslim is obliged to make during his lifetime

* Rising wealth in Islamic countries from the Persian Gulf to Indonesia is boosting demand for a higher standard of accomodation in Mecca as about 3 million pilgrims prepare for the Hajj in October

* This is contrinuting to a surge in Investment into Saudi Arabia by hotel companies such as Starwood. Hyatt and Intercontinental Hotels

* Hilton, owned by Blackstone Group, plans to more than double the number of hotels it oprates in Saudi Arabia to 14, including six in Mecca

* Intercontinental Hotels Group will increaae its room capacity by 50% to 7,300 in the next three to five years

* Hyatt expects to have eight more hotels in the region in five years

* Starwood plans to manage five more hotels, adding 1.300 rooms. It currently has 10 hotels with 3,000 rooms

* STR Global: The boom in Saudi Arabia will increase the number of branded hotels by 58% in the next few years

* International hotel companies are not allowed to own property in Saudi Arabia

* Accor, Europe's largest hotel operator, will open the 1,315 Pullman Hotel in Mecca and another property in the south. It plans to have 17 properties in Saudi Arabia by 2015 from 12 currently

* In 2010, the Abraj Al-Bait Towers was built just across from Mecca-s Grand Mosque housing an 858-room Fairmont Hotel. Swissotel plans to open a 1.562 room hotel this year. Both operators belong to Colony Capital's FRHI Holdings

* Saudi Hotels and Resorts has 10 hotels in the Kingdom and plans to add four in Mecca

* Average daily rates in Mecca's hotels rose 15% to 631.79 riyals ($168) in the first three months of 2012 while falling 2.7% in Riyadh

* Mecca's revenue per avaulable room (RevPar) has climbed 43% in 1Q 2012 compared with a 10% drop to 638 riyals in Riyadh

* Business Monitor International: In 2011, Saudi Arabia hosted 10.6 million pilgrims and religious visitors out of 15.4 million foreign arrivals overall. This will increase an average 6% annually until 2016

* The Saudi Ministry says that it expects a record number of pilgrims this year. In 2011, 2.5 million passed through Jeddah's airport on 10,650 flights

* Accor is looking to fill the niche for the 3-star hotel segment

* International hoteliers are also looking at smaller cities such as Jizan, Yanbu, Khobar, Jubail and Hofur

* Our Top picks to profit from Mecca's expansion: Starwood (HOT), Hyatt (H), Intercontinental Hotels Group (IHG) and Accor (AC)

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Makkah Clock Royal Tower A Fairmont Hotel, Mecca, Saudi Arabia (SA)

Added Date:
28 June 2012
Length:
01:10

Makkah Clock Royal Tower A Fairmont Hotel, Mecca, Saudi Arabia An Icon of Hospitality in the Holiest City on Earth. Located adjacent to the Masjid al Haram, Makkah Clock Royal Tower, A Fairmont Hotel, offers the finest hospitality in the holy city of Makkah. One of the world™s tallest, this 76-story hotel is the focal point of the Abraj Al Bait Complex, part of the King Abdul Aziz Endowment Project. Among its outstanding features is a 40-meter (130-foot) Royal Clock, visible from 17 kilometers (10 miles) away, which will announce daily prayers to the Muslim world; meanwhile, the Lunar Observation Center and an Islamic Museum aim to preserve Muslim heritage for future generations. In addition to the opulent and elegant comfort of the rooms and suites offered at this five-star hotel, 76 state-of-the-art elevators allow easy access to the holy Masjid al Haram for prayers. And, at any time, ten exceptional dining venues will be available to accommodate intimate or expansive gatherings. Makkah Clock Fairmont Hotel Tower authentic hospitality is seen throughout 858 rooms distributed in 29 floors. Guests would have the privilege of choosing their rooms either overlooking the Kaaba - House of God “ said to be built by Abraham and Ismail (Peace Be Upon Them), the Haram or the Holy City. Businessmen can benefit from services that meet the round-the-clock needs with smart technology design and high speed internet. The Hotel appeals to pilgrims and business visitors alike - in addition to large prayer facilities for both males and females. For a memorable spiritual experience, the Makkah Clock Royal Tower is a beacon for pilgrims in the heart of the Holy City.