Although global hotel brands with loyalty programmes, rigorous brand standards, and often beautiful and unique assets will surely continue to grow the number of visitors to the kingdom, the path to success will not be without hurdles. In a very competitive global tourism sector, guests will expect the same level of service in Saudi Arabia as they would in any other city around the world, especially as ADR mirrors longer-established premium and leading tourism destinations. Yet the race for talent in the hospitality industry on the heels of the COVID-19 crisis continues, with many key geographies reporting millions of job shortages.
In Europe for instance, Effat and Hotrec Hospitality Europe announced in their joint declaration from March 2024 that “on average the sector is currently missing between 10 per cent to 20 per cent of the workforce in the EU compared to 2019”, when the sector currently employs around 10 million hospitality professionals in the EU.
Over in Asia, The Hotel Association of India reported in March 2023 that despite recent efforts to reduce its manpower shortages, the industry still experienced a 60 per cent shortage partially driven by high attrition rates, poor skills and a negative perception from young professionals about the industry.
Meanwhile, in America, according to a press release from the American Hotel and Lodging Association in February 2024, 82 per cent of hotels surveyed in the US reported having increased wages, yet 72 per cent were still unable to fill in opened positions.
Through its Vision 2030 strategy, Saudi Arabia has set an ambition to create 1.6 million jobs in tourism. Many of the jobs in the sector have traditionally been low-skill jobs, yet the kingdom is keen to see the job creations benefit its citizens. Young Saudis are attracted by the growth in the sector, but are not eager to fill entry positions, despite often lacking the necessary skills expected by hotel chains. Roles in the sector are still stigmatised by a perception of low social status. As a result, Saudi Arabia is suffering from a shortage in technically qualified labour, particularly in critical functions such as culinary, kitchen, F&B, or sales.
The country has long offset labour shortages in entry positions with expatriate workers coming from countries like Pakistan, India, the Philippines, Egypt, Bangladesh, and Nepal. The trend is unlikely to go away short term. Yet Saudization targets are putting pressure on hoteliers to actively pursue the employment of Saudi nationals, proving difficult at times while forcing hotel brands, hospitality asset owners, and operators to carefully design their human resource strategies. Given the global shortages in manpower and skills, the kingdom will likely need to not only focus on attracting visitors but also global talent able to deliver the expected standards of quality from a tourist population with nearly endless destinations to choose from.
To achieve the 150 million visits by 2030, Saudi Arabia now counts, in part, on the rising middle classes of China and India. To capitalise on these nations’ fast-growing middle class, the country will need to adapt its offering to their preferences. Saudi Arabia has, for example, added standard Chinese as a third language in its schools following the visit of the Crown Prince Mohammed bin Salman to Beijing in 2019. The decision has been intended to bring the two trading nations closer. Her Royal Highness, the Vice-Minister of Tourism Princess Haifa Al Saud, also mentioned that the ministry was working to bring tour guides speaking Mandarin to the kingdom, to welcome Chinese tourists.
Catering to Chinese visitors may further complicate staffing considerations for hoteliers in Saudi Arabia, as their staff currently primarily communicate in Arabic and English, and cater to more Western standards of hospitality. Saudi Arabia will not be the only nation trying to court Chinese visitors, which will also likely result in an intense competition to attract talent that is able to cater to Chinese customers.
Given the strength of the domestic travel, and otherwise diverse visitors to the Saudi Arabia, and a growing expectation for personalised treatment by guests, hospitality companies will have to not only rethink their staffing priorities but also carefully design visitors journeys, and diligently execute on them.
