Alhokair Group pursues expansions in entertainment, hospitality sectors; evalutes income sources: CEO

Fahad Al Obailan, CEO of Abdulmohsen Alhokair Group for Tourism and Development (Alhokair Group)

Abdulmohsen Alhokair Group for Tourism and Development’s (Alhokair Group) strategy is to remain in the entertainment, hospitality, and catering market and to invest more significantly in these sectors to provide returns to investors., CEO Fahad Al Obailan told Argaam.

He also pointed out the growth in the group’s portfolio and its expansion in the entertainment, hospitality, and catering sectors, with a focus on markets and cities with high returns.

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During a meeting with Argaam on the sidelines of the Saudi Entertainment and Amusement Expo (SEA), Al Obailan added that catering is deemed one of the promising sectors in Saudi Arabia, due to the mega projects implemented across the Kingdom. However, it is difficult to predict the strategic financial impact of this sector at the present time, he said, expressing optimism about its rapid growth.

The group continues to reassess the existing income sources within the company, focusing on investing in sectors with outstanding future prospects to boost and increase profits, and intelligently divest from any businesses where the returns do not align with its expectations and those of the investors.

He added that the group has divested from the cinema sector, where it faced numerous challenges that led to significant operational losses, impacting its financial results in the previous year.

Alhokair Group currently owns approximately 23 hotels, comprising 2,960 hotel rooms, across 10 major and secondary cities in the Kingdom and the UAE, serving the tourism system. He added that it owns around 56 entertainment sites, some of which feature more than one brand.

Al Obailan mentioned that NEOM project for catering services, recently awarded to Alfanar Co. aims to cater to 10,000 workers. The first batch of this project has been delivered, and the necessary team has been formed to provide services to our clients, expecting the financial impact of this project to begin as of Q1 2024.

Regarding the financial impact of purchasing the Novotel Riyadh Hotel, Al Obailan said that the hotel was acquired during the current year. The rent and acquisition value will be provided, and the value of the hotel will be included in the company's assets.

He expected the asset value and operating profits derived from the asset to increase over time due to its location and the saving of rent, in addition to expectations of an increase in average hotel rental values in Riyadh, which became evident with the continuation of events and conferences in the city.