From India to Saudi Arabia: How to expand your hotel business into the foreign market

By IndianCEO Team

Posted on May 16, 2019

The hotel industry in Saudi Arabia is continuously evolving and transforming to meet travelers’ every whim. Luxury hotels, in particular, do not want to risk falling behind. They provide a wide range of accommodation options and design the experience so that it is significant. It is easier than ever to provide a life-changing experience, meaning that companies can position themselves at the forefront of the hotel industry. For foreign companies looking to expand into Saudi Arabia there are numerous business opportunities in the Kingdom. Take advantage of the high growth and market that wants you. If you want to gain international clients, Saudi Arabia is the best fit.

Why exactly Saudi Arabia?

Saudi Arabia is one of the most sociable and friendliest places on the planet. It is every easy to do business here. The Kingdom has a high position in the World Bank Group ranking, which means that the regulatory environment is conductive to business operation. Saudi Arabia is also one of the fastest growing economies, attracting a high number of investors. In 2019, efforts will be made to achieve the goals of the Vision 2030. According to forecasts, the economy of the Kingdom will grow by 2%. Within the non-oil sector, considerable contributions to growth are expected from finance, insurance, and business service. The income is set to rise from $25,303 to $33,500 in 2020.

The Saudi Arabia hotel industry keeps on expanding, supported by increasing demand from religious and business travelers. The Kingdom is strengthening its hotel offering, including interest from international hotel groups, which are driving construction trends across the country. Investment into tourism infrastructure is likely to continue for many more years. Approximately 65,00 guestrooms are in development, so it is obvious that the hotel industry is going through a period of expansion. Interestingly, the hotel market in Makkah has the largest numbers of new hotels, accommodating millions of individuals each year. Haji pilgrims and Umrah pilgrims can easily find premier hotels such as Shaza Makkah in Saudi Arabia’s holy city when they carry out their mandatory religious duty. It is a very lucrative industry for Saudi Arabia.  

How to start a business in Saudi Arabia

If your hotel is a success back home in India, you must consider overseas expansion. Many possibilities have remained unexplored, not to mention that the Government is interested in diversifying the economy. Carry out thorough market research and have a business plan ready for your entrepreneurial venture. A perfect transition can be achieved by understanding new customers – in other words, their hallmarks, impulses, and patterns. Equally important is to work on the market entry strategy.

The process of starting a company in Saudi Arabia is not complicated at all. Where should you start? Continue reading to find out.

1. Get a SAGIA entrepreneurial license

The Saudi Arabian General Investment Authority has recently launched an entrepreneurial license that allows new companies to leverage of the services of small and medium-sized business and enjoy many incentives. The aim of SAGIA is to attract more investments and allow entrepreneurs to set up their own projects and businesses, based on the Vision 2030. As a new business, you have to get a SAGIA license. With this authorization, you will be able to set up a bank account, sponsor shareholders, and start doing business in a legit manner. The time it takes to get a business license in Saudi Arabia has been shortened to encourage further investment in the Kingdom. More precisely, the processing time has been reduced to 4 hours.

1. Complete the incorporation process

Foreign investors are required to finalize the incorporation process, which includes signing the Articles of Association and notarizing the documents at a notary public in the Kingdom. You will apply for registration in the Commercial Register 30 days after having recorded the Articles of Association. The commercial registration is issued by the Ministry of Commerce and Investment. Other licenses may be necessary if you are planning to undertake other activities. Renewal of investment licenses can be done online via a self-service portal.  

1. Set up your office

As a foreign company, you can establish a branch office in the Kingdom of Saudi Arabia with only 500,000 SAR. Unquestionably, the parent company is responsible for the activities of the branch office. Now, you can offer unique accommodation experiences for domestic, as well as international travelers. Think about taking advantage of local expertise and knowledge. Noteworthy support organizations can be found in Makkah and other cities, including Riyadh and Jeddah. They ensure financial and non-financial support.

Seek brand partnerships to enrich customer experience

Over the last years, Makkah has been drawing more and more hotel groups and brand by means of infrastructure projects and easing visa requirements. Taking into account that competition is fierce, you might want to team up with a local business. A strategic partnership with a company like Shaza Hotels can really make the difference. You can take the guest experience to the next level, offering more than traditional lodging. Keep in mind that successful Indian businesses have a team of people behind them. If you want your hotel business to be successful and be acclaimed by the locals, it is a good idea to build long-term business partnerships.

When doing business in the Kingdom, it is essential to get a good understanding of the business etiquette and customs. The nation is highly traditional, not to mention that society is based on strong religious values, beliefs, and customs. Religious and cultural aspects are closely connected, so become aware of the cultural norms. Building trust with business associates is more important than anything. Establish a foundation of respect and cultural adherence. Determine what industry-specific group compliments your branding and vision. You will want to approach the companies that are inspired by the Arabian lifestyle, which lead the way when it comes to luxury accommodation.

Strategic alliances have become important forms of businesses, helping increase market share and leveraging greater opportunities. Establishing ties with the nation is crucial to the success of your hotel.

From India to Saudi Arabia: How to expand your hotel business into the foreign market