Accor Concentrates on Makkah and Madinah as Gulf Tourism Cools
Accor is accelerating its hotel growth in Saudi Arabia's holy cities, leveraging religious tourism as a buffer against broader Gulf tourism slowdowns.
Stock photo for illustration only, not from the actual event
- Accor operates over 15,000 keys across 15 hotels in Makkah and Madinah, with 8,000 more in the pipeline.
- Expansion aligns with Vision 2030's goal of attracting 30 million international pilgrims annually.
- Makkah features around 300,000 total keys but only about 65,000 quality keys.
- Relaxed real estate rules aim to attract Muslim investors from Indonesia, Malaysia, and Nigeria.
French hotel group Accor is fast-tracking its expansion in Saudi Arabia’s holy cities, utilizing religious tourism as a stabilizing buffer amid a broader pullback in Gulf tourism demand tied to regional conflicts involving Iran.
The company currently maintains more than 15,000 keys across 15 hotels in Makkah and Madinah spanning 10 brands, with another 8,000 keys in the pipeline to support the Saudi Vision 2030 objective of drawing 30 million international Hajj and Umrah pilgrims every year.
High-profile developments include the upcoming Sofitel Jabal Omar Makkah, which opens later this year with 1,100 rooms to become the brand's largest property globally. A Fairmont under construction in Madinah features attached branded residences, alongside the newly announced ibis Makkah Al Maabdah, a 518-key new-build slated to open in 2031.
"Healthy demand supports the case for continued branded hotel development across multiple segments"
Maya Ziadeh, Accor’s chief development officer for premium, midscale and economy
Although occupancy rates and daily rates in Makkah experienced a sharp decline in June due to the Hajj period shifting into May for 2026, corporate executives emphasize that solid domestic and international demand justifies ongoing multi-segment hospitality development.
Accor's strategic pivot toward Makkah and Madinah highlights a resilient playbook against macroeconomic and geopolitical headwinds in the wider Middle East. While general leisure tourism can fluctuate wildly based on regional tensions, religious tourism is heavily regulated through government quotas, creating a uniquely reliable demand baseline despite pronounced seasonal spikes during Ramadan and Hajj.
Stock photo for illustration only, not from the actual event
Growth is increasingly propelled by conversions and master-development portfolio agreements rather than entirely new constructions. Furthermore, newly relaxed property-ownership rules are expected to open up investment pathways for foreign Muslim buyers hailing from key source markets like Indonesia, Malaysia, and Nigeria.
Source: Skift
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