Riyadh Struggles with Full Capacity as LEAP Conference Boosts Hotel Prices to Over $25,000 per Night

Hotels and rental facilities in Saudi Arabia's capital are operating at full capacity this week as Riyadh prepares to host the highly anticipated LEAP technology conference. According to an Al Arabiya TV report, accommodation prices have skyrocketed to over $25,000 per night.

With an estimated attendance of more than 200,000 people, the LEAP conference will delve into topics such as artificial intelligence (AI), smart city technologies, the impact of digitization and AI on the workforce, and strategic transformation.

As Riyadh continues to serve as a host city for major global events, the demand for hotel accommodations has outstripped supply. Occupancy rates have reached 100 percent, with daily room rates ranging from $2,933 to $3,999, according to the report.

To ensure fairness and reasonable prices, Saudi Arabian authorities need to implement measures to cap the soaring hotel prices. Dr. Mohammed Makni, Assistant Professor of Finance & Investment at Imam Muhammad ibn Saud Islamic University, emphasized the need for balancing affordability, quality of services, and costs compared to accommodations in other countries.

Makni highlighted the current imbalance, stating that it is unreasonable for the prices of low-rated hotels and apartments to be excessively high due to increased demand.

Hotels are grappling with the costs of accommodating such a large number of guests, prompting them to increase their prices. Some hotels employ AI tools in their revenue management departments to determine suitable prices for each room, factoring in supply and demand.

To meet the rising demand, investments in the hotel sector are crucial, according to Dr. Makni. He stressed the importance of increasing supply to accommodate individuals and companies coming to Riyadh from around the world for tourism, investment, or residence.

The week during which the LEAP conference takes place, particularly from March 4 to 7, has witnessed a surge in reservations from international guests. Giant technology firms participating in the exhibition have booked numerous rooms and made reservations for hotel halls and restaurants to host meetings.

To maintain the highest standards of service, cleanliness, and quality, the Ministry of Tourism has issued stringent requirements for five-star hotels. These requirements include the use of organic sanitary and personal supplies in every room and the implementation of specialized violet ray machines for detecting bacteria, viruses, and germs during cleaning services.

As Riyadh experiences a surge in global events, parallel growth in the hotel sector is essential to cater to the substantial demand and ensure a thriving economic activity.