Driving west out of Austin toward Fredericksburg, the road narrows to one-lane blacktop, and the edges of the city’s suburbs gradually give way to a different kind of Texas, one of ranches, old wooden churches, farm stands and wineries.
05.12.2023 - 13:29 / skift.com / John Pagano / Josh Corder
The master developer of Saudi Arabia’s super-luxury island tourism project, The Red Sea, is working on another giga-project that will house more affordable hotel options and tap into a market — millions of travelers strong. Red Sea Global (RSG) group CEO John Pagano confirmed the development to Skift, adding that it will open before 2030 and introduce thousands more hotel rooms to the kingdom’s burgeoning tourism sector.
“Mid-market has a huge market potential and there are some locations that are better suited to that, closer to larger urban areas,” Pagano said. “When we move to more mid-scale, we’ll start getting into the three-star (hotel) offerings, different products, different positioning, and different target audiences. It’s about being strategic across the entire Red Sea coast.”
“As you get into the more mid-scale offerings, the hotel sizes get bigger because you need that scale to make them financially viable. Our sites are very large, many thousands of keys.”
The project will be south of The Red Sea, putting it closer to Saudi’s second major city, Jeddah.
In October 2022, The Red Sea Development Company rebranded as Red Sea Global, announced at that time it would be developing around a dozen more sites along the Red Sea coast. This mid-market hotel hotspot is one of them.
“We are basically developing everything south of Neom,” said Pagano.
Located nearer to Jeddah, the new project could seek to draw in the city’s many religious travelers. Jeddah is located approximately an hour from Makkah, one of the most important locations in all of Islam. Last year, Makkah received close to 7 million travelers, while Jeddah got 6 million.
For many religious tourists, their travels start and end with visiting the holy city. But Pagano sees an opportunity for his mid-market project to extend the stays of these pilgrims.
He said: “Think about the size of that market, one and a half billion Muslims in the world.”
“So if we can tap into that market and have them make it a once-in-a-lifetime trip where they do the religious piece, which is hugely important and then tack on a family vacation at something that’s reasonably affordable, I think it’s a very deep market for us. (Religious travelers) tend to spend more middle and lower end of the (travel) market.”
Pagano declined to tell Skift the name of this new project.
We don’t know the sorts of brand flags being planted on this new giga-project yet. Regional operator Rove has told Skift previously it could land in giga-projects, while Premier Inn Middle East has said the same. Almost all the global operators have mid-scale brands, think Courtyard by Marriott, Hampton by Hilton or Hyatt Centric.
The Red Sea is RSG’s flagship development and a postcard
Driving west out of Austin toward Fredericksburg, the road narrows to one-lane blacktop, and the edges of the city’s suburbs gradually give way to a different kind of Texas, one of ranches, old wooden churches, farm stands and wineries.
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State-owned Qatar Airways has partnered with barefoot luxury brand Habitas to open one of the most costly resorts in the country. The Habitas Ras Abrouq is slated to open next month with room rates starting at around $700 per night to stay in one of its 42 villas.
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