One of the fastest growing business sectors in Saudi Arabia is the food and beverage industry. Opportunity for restaurant and hotel growth abounds in Saudi Arabia.
Saudi Arabia’s Population Demographics
Saudi Arabia’s population ranks fifth among Arab nations, with over 28 million residents in 2011. Among these 28 million residents are over 16,000 restaurants.
The Biggest Players in Saudi Arabia’s Restaurant Industry
Of the top 20 restaurant chains in Saudi Arabia, more than half are Western brands. These include Baskin Robbins, KFC, McDonald’s, Seattle’s Best Coffee, Pizza Hut, Hardee’s, Mövenpick, Starbucks, Burger King, Domino’s, and Dunkin Donuts. Cinnabon has 100 locations in Saudi Arabia and The Cheesecake Factory plans to move to the Kingdom after its successful launch in Kuwait.
Why the Dinner Rush?
In Saudi Arabia, it’s not uncommon for families to eat out — sometimes as often as three times per week. It’s not just a penchant for service and selection, dining out can be the most economical option for some. A 40 percent rise in the price of chicken led to a decline in home cooking.
A Push for Healthy Options
Obesity is on the rise in Saudi Arabia, with 45 percent of all premature deaths caused by cardiovascular diseases. Here, eating to impress by ordering excessive amounts of food is common. And while one restaurant began fining patrons for not cleaning their plates, the government favors a less miserly approach.
Hospitality Industry in Saudi Arabia is Buzzing
InterContinental Hotels Group (IHG) is set to build the largest Holiday Inn in the world in Saudi Arabia. The hotel will have 1,238 rooms and is due to open in 2016. Also in the works? Crowne Plaza Riyadh Olaya (308 rooms, 2015), Radisson Blu Riyadh Ring Road (252 rooms, 2015), Four Points by Sheraton Dhahrain (236 rooms, 2014), and Aloft Riyadh (238 rooms, 2014).
Government Investment in Saudi Arabia’s Restaurant Industry
Over 3,500 Saudi restaurants were ordered to ban smoking (a move that actually increased restaurant revenue when enacted in New York City). The Kingdom’s government also allocated USD $218.7 billion in 2013 to improve growth and employment opportunities by revamping public transportation, expanding the healthcare system, and increasing education funds.
Saudi Arabia Faces Employment Woes
Saudi chefs are typically underpaid and underemployed and women working in hospitality are still underrepresented, despite the fact that more women graduate with a degree in hospitality than men.
Nitaqat, a new Saudi labor policy, also presents some problems for hospitality employment in Saudi Arabia.
Investments in Education and Employment
Saudi chefs are calling for the creation of a culinary academy — a possibility with 25 percent of the 2013 budget set aside for expanding education. Hotel management company Accor is also working to bolster female employment. By 2015, they hope to see female service employees account for 35 percent.
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