Episode 146: Building Saudi Arabia's Next Wave of Mid-Market Hospitality

Speaker A: Welcome to FHS podcast. In this episode we speak with Dori Moawat, Director of Operations KSA at IWA Hotel Group about the evolution of Saudi Arabia's hotel market and the growing importance of budget and mid scale hospitality. With over 25 years of experience in the Middle East, Dori has played a key role in strengthening IWA's operational foundations, supporting the rebranding of Grand Plaza and helping shape Iware Express, a fast growing hotel brand now operating across 12 properties. With more in the pipeline, this conversation explores what it takes to build a scalable hospitality brand in Saudi Arabia, how guest expectations are changing and why operational excellence is becoming one of the most important drivers of growth products. Dori, welcome. Such a pleasure to have you here.

Speaker B: Thank you Dara. Uh, good afternoon first and thank you. It's my pleasure also.

Speaker A: Well you have spent over 25 years in Middle east hospitality. What has changed the most in the way hotels are uh, operated today? I'd imagine it's quite a huge change and huge transformation indeed.

Speaker B: Actually I agree with uh, I agree as if you are looking at two different uh words if you want to say. If you go back to the 1900s, early the late 1990s and early 2000s and now it's completely different for uh, sure the guest service oriented uh, I guess oriented service is still there but um, there's too much in the. At the back end has, has ended. The front end have been changed. I mean my lab before uh we used to uh, we used to um uh count more about uh unalt gut intuition. There was no data uh, uh everywhere. Now data driven analytics. Uh you can analyze the forecast better, you can uh optimize the guest service network and you can uh also um uh anticipate guest needs and um demand and supply. So uh, that's the main difference leaders now still we need uh definitely to watch out for gas but uh they need I uh think in my opinion they need an analytical mindset in order to survive in the inevitables.

Speaker A: So would you say then uh, uh it has changed what would made someone really good at their job, uh let's say 90s versus now 90s.

Speaker B: A good PR networking guy or lady would be excellent. Now a good lady and guy just for the lady and uh guy he needs with the PR with the networking with the guest, uh communication he needs um definitely analytical mind definitely. He cannot survive without analyzing data.

Speaker A: So uh, if we then zoom in uh in terms of uh the biggest uh operational opportunity in Saudi uh Arabia where, where do you see this is exactly?

Speaker B: Ah in My opinion I It's a mid scale to up to upper minute. Uh that's the greatest opportunity. You know Saudi Arabia is targeting a 150 million if I'm not mistaken. I don't know if the number has changed but uh if we look at the Vision 2030 it is targeting 150 million travelers uh by 2030. And uh there's massive GIGA projects ongoing. But uh unfortunately for this mass to be accommodated you need the mid and mid up. That's what I see. And we are definitely scaling our brands according to that to this region.

Speaker A: Yeah, well um. Evo Express uh the brand that uh I've mentioned uh in the introduction has grown into ah a 10 property brand. And uh what do you see is the biggest challenge in building that consistency and continuing the growth as well?

Speaker B: Yeah, uh to correct your. It's not 10, it's last month we opened the two, the extra two which is. Wow. Thank you. As you speak 12 hotels now next month another hotel and RR and the other end by uh I think September another hotel so 14 by September max. So uh yeah you see how much we are aggressive in group now to build it up uh the most uh. You asked me about the challenge correct how it was built up from our. The biggest challenge was the keeping a centralized uh standard and management workflow along versus giving the hotel a little bit of autonomy and uh adapting to the guest needs in each and every single. That was the biggest challenge. But uh if you have a good infrastructure in place of revenue, purchasing supply chain and uh definitely cost and uh quality control uh with integrated system with all hotels you covered.

Speaker A: Well we mentioned that um, um budget and mid scale is a huge opportunity for Saudi Arabia. Uh what really makes that such an important part uh of segment uh right

Speaker B: now I didn't get your question. What do you mean by what is

Speaker A: what really why those particular sectors uh segments uh specifically guests.

Speaker B: Now if you want to say I don't like to this Generation Z Alpha and these I like to say I like to describe it as modeling guests. I don't know this is what. So it will combine all these generations Modern gas now um wants to. They need a budget of 300 to 600700 real maybe around 200. We are talking about 150 to 2 million dollars maximum and they want an experience uh or they want a hotel with they think or they want. They expect the hotel as their destination and not the city or the area where they are going as a destination. So uh the mid scale if you provide with this limited budget on 50 to $200. Such experience, such guest experience. Reserving the basics which include a nice bed, a comfortable bed and permit high pressure shower and nice breakfast. That's what they need. That's what we think. It's more profitable on the bottom line. Margins also to the owners and the.

Speaker A: No, absolutely. Well, apart from those, uh, but those three things you mentioned as well, um, how, how else do you create that sort of strong gift guest experience without over complicating the product or obviously three factors. Anything else that needs to be considered?

Speaker B: Well, simply you need to make the your hotels. First of all you need to bring the guest to your property. You need to make your, your hotel visible on all selling channels, distribution channels. So within excellent tech infrastructure at the back end. This can be done now when the guest arrives. As simple as that. If uh, uh yeah I mentioned before in terms of back office, I mean finance and uh, uh, procurement and revenue management. It's all centralized now at the front end the people has the empowerment to deal with each, uh, to deal and serve each and every single guest as a personal. With a personalized service. That's it. As simple as that. No complications.

Speaker A: Well, um, how do you then balance the profitability with the service quality? We talked about how simple it is and how important it is uh for the bottom line. But you know, where, where is this sort of balance between service quality?

Speaker B: Definitely hug your teens would be excellent. Cross training would be perfect. That's what we are doing in our uh, brand and especially we scale up to 60 hotels under our direct management, more than 15 core management. Uh, this will help us uh move the assets that we have, all the staff that we have m on the team, move it around. So whatever we need we can just plug and play. Uh, that's I think where we uh, that's what reflects on the bottom line. We do not manage, uh, if you want to manage the old school, the old way, uh, each team for each hotel, it will not work out definitely it will return badly on the uh, margins and on the EBITDA profit lines. Yeah.

Speaker A: Well, we initially talked about how different hospitality is over um, and change over the past uh two decades. Um, in terms of uh, travelers and Saudi travelers in particular, uh, and their expectations. How uh, you know, what do they expect today that for example they you know, didn't expect five years.

Speaker B: They expect to anticipate what. Sorry I've interrupted you but this is a very familiar question to me. That's why the Saudi travel expects each and every single stay in your hotel uh to be uh matching his thinking or whatever he anticipates the moment he decided to come and visit your hotel. I. E. That means what you need to to know before he speaks. You need to know what he wants. As simple as that. Generation Z and the families also before the older generations were not like this. Now they need. They think you need to know whatever they want you need to know. You need to ask them before you need to make everything ready. Uh from the smoothness taking and maybe from the parking car if you want or what or the even the parking lot in the parking. Sometimes people ask they need to park their car in a special area. So you need to anticipate all these leaks. That's uh. As simple as that. That's something.

Speaker A: Yeah. That's a huge task. How do you do it?

Speaker B: Uh the CRM plays a big role in this. Um the integrated systems that we um. Actually we have a very huge team that follows up on all these pre states. Uh so we are communicating um with these uh with the guests beforehand and we are asking him according to his last day or if she is the new guest. But uh according to our trend or whatever other guests needs we are asking these questions nowadays we are integrating. We are working on a huge project. I think by mid 27 it will be finalized. Uh we are integrating all this with the um artificial intell AI uh and bots and agents. Um basically by. By Q4 it will end up. It will be finalized but ongo testing and uh six months before we launch it and make it uh. Yeah.

Speaker A: Exciting, exciting. Very, very forward thinking as well. Well um. Talking about the development uh of the hospitality market in Saudi Arabia and uh as it continues to expand its tourism offering as well. What kind of hotels do you think uh the market would need more? Um we obviously touched upon on the budget and mid scale but do you see this sort of continuing trend or there's going to be a change uh uh more of a different type of uh offering needed.

Speaker B: Look Daria, I repeat I see in the. No I cannot see it except in the mid scale and the upper mid because at the end you need to please the investors and the profit is there is in this. In this scale five star and luxury hotels. Seven star upper luxury. They are doing fine but uh it's not uh want to talk mass. Uh we want to. We will speak about mid and upper scale and dual brand book because it will uh a bit um um minimize the overheads and the back at the back end. So dual branded hotels. I think it will Be uh. It will be excellent and we future um Any.

Speaker A: Any particular trends that happening in Saudi Arabia at the moment that you are particularly excited about? If we're talking about just general wider hospitality and travel market for the time

Speaker B: being there's not much. There's not much m. Undergoing except whatever is undergoing under whatever is seen in the last two to three years. But I think uh last week we were in the Saudi with the some people from the Saudi Ministry Ministry of Tourism. Uh it will be alone a new strategy in marketing the destination. Um very recent. I think it will be launched in Q4. This will help a lot. And then what's when will this some projects like Kingston it will open in Q1 I think 2027 the first phase would uh be uh. It will help also uh this will change a bit but until 20 end of 27 I don't think there will be like a huge change in Riyadh. I'm talking about re. Yeah, 2028 it will move.

Speaker A: Fantastic. Well we are only a few days away from uh FHS Saudi Arabia and as ah uh one of our wonderful uh partners as well at the event. What sort of conversations are you most looking forward to having with the industry there and uh just uh generally what are your plans?

Speaker B: I don't know if you knew. Uh we recently opened a um. A department in our uh or a division in the group. Uh we are taking over management. We are taking over the hotels now we are managing uh we have talks with. I don't want. It's there's still. It's still confidential. With chains a big news is to be co brand or co manage these properties but through us basically it's their um. It's our brand but under the um uh white label uh by one of the biggest brands uh that we know biggest chains that we know. Uh this is our aim for Opalhs. Um I think uh owners or investors they are um. Rethinking about the hospital hotel economics. You want to put it that way. What do I mean by that is that they are not looking now for big huge uh names and buildings. They are more focused on profits and returns on investment and IRRs. Uh it's not like 20 years back open your hotel only for ER or just like for and just I inject money from the other business now. No uh investors they want to generate profit out of it and they want to scale up and this is where

Speaker A: the opportunity lies and if someone is uh still figuring out whether to attend the event or not why they should uh in Your opinion going back to

Speaker B: the first question or the second? I don't remember. Uh, if a hospitality lady or a gentleman wants to develop, he needs to attend such events for networking, to know what is going in the market, to learn about the investor mind, to learn about the management company's mind. So, uh, networking is the blood or the oxygen of hospitality. So he cannot live without or she cannot live without. So they need to. And I ask them to apply. Yeah.

Speaker A: Oh, good. Can I, can I, can I steal that quote that uh, networking is the oxygen of the hospitality industry?

Speaker B: Definitely.

Speaker A: That's wonderful. Thank you so much.

Speaker B: If there's some, uh, trend on it, I need some money back. It's all about the profit margins.

Speaker A: Deal? Deal. Absolutely.

Speaker B: Okay, perfect.

Speaker A: Well, wonderful. Thank you so much, Dari, uh, for all the insights. Uh, wonderful to be speaking with you and I really look forward to welcoming yourself and uh, Ivar to FHS Saudi, uh, later this month. Thanks so much again and we'll see you soon.

Speaker B: Thank you, Daria. Thank you.

Speaker A: Mhm, Mhm, Mhm, Mhm, Mhm, Mhm. Mhm. Mhm. Mhm, Mhm. Mhm. Mhm. Mhm. Foreign. You're listening to the FHS podcast where we explore the future of hospitality. Join us as we dive into the latest trends, innovation and stories shaping the industry. Welcome to FHS Podcast. In this episode we speak speak with Dori Mouawat, Director of Operations KSA at IGWA Hotel Group, about the evolution of Saudi Arabia's hotel market and the growing importance of budget and ah, mid scale hospitality. With over 25 years of experience in the Middle East, Dore has played a key role in strengthening IWA's operational foundations, supporting the rebranding of Gran Plaza and and helping shape Ewhare Express, a fast growing hotel brand now operating across 12 properties. With more in the pipeline, this conversation explores what it takes to build a scalable hospitality brand in Saudi Arabia, how guest expectations are changing and why operational excellence is becoming one of the most important drivers of growth. Doris, welcome. Such a pleasure to have you here.

Speaker B: Thank you. Dara. Uh, good afternoon first and thank you. It's my pleasure also.

Speaker A: Well, you have spent over 25 years in Middle east hospitality. What has changed the most in the way hotels are, uh, operated today? I'd imagine it's quite a huge change and huge transformation indeed.

Speaker B: Actually, I agree with. I agree. As if you are looking at two different, uh, words. If you want to say, if you go back to the 1900s or the late 1990s and early 2000s and now it's completely different for sure the guest service oriented uh guest oriented service is still there but um. There's too much at the back end at the front one have been changed. Uh I mean by that before uh we used to uh. We used to um uh count more about uh unalt gut intuition. There was no data uh uh everywhere. Now data driven analytics, uh you can analyze the forecast better, you can optimize the guest service network and you can also um uh anticipate guest needs and um demand and supply. So uh that's the main difference Leaders now still we need uh definitely to watch out for gas but uh they need I uh think in my opinion they need an analytical mindset in order to survive in the nowadays.

Speaker A: So would you say then uh uh it has changed what would made someone really good at their job. Uh let's say 90s versus now 90s.

Speaker B: A good PR networking guy or lady would be excellent. Now a good lady and guy just for the lady and uh, uh he needs with dpr with the networking with the guest um communication he needs um definitely analytical mind definitely. He cannot survive without analyzing data.

Speaker A: So uh, if we then zoom in uh in terms of uh the biggest uh operational opportunity in Saudi uh Arabia where where do you see this is exactly?

Speaker B: Ah in my opinion I it's a mid scale to up to upper minute. Uh that's the greatest opportunity. You know Saudi Arabia is targeting a 150 million if I'm not mistaken. I don't know if the number has changed but uh if we look at the vision 2030 it is targeting 150 million travelers uh by 2030 and uh there's massive GIGA projects ongoing. But uh unfortunately for this mass to be accommodated you need the mid and mid up. That's what I see. M And we are definitely scaling our brands according to that to this region.

Speaker A: Yeah, well um. Evo Express, uh the brand that uh I've mentioned uh in the introduction has grown into ah a 10 property brand. And uh what do you see is the biggest challenge in building that consistency and continuing the growth as well.

Speaker B: Yeah, uh to correct your. It's not 10, it's last month we opened the two, the extra two which is now as you speak 12 hotels. Now next month another hotel, an RR and the other end by uh. I think September another hotel. So 14 by September max. So uh yeah you see how much we are aggressive in group now to build it up uh the most uh. You asked me about the challenge correct how it was built up from our. The biggest Challenge was the keeping a centralized uh standard and management workflow along versus giving the hotel a little bit of autonomy and uh adapting to the guest needs in each and every single. That was the biggest challenge. But uh, if you have a good infrastructure in terms of revenue, purchasing supply chain and uh definitely cost and uh quality control uh uh with integrated system with all hotels you covered.

Speaker A: Well we mentioned that um, um budget and mid scale is a huge opportunity for Saudi Arabia. Uh what really makes that such an important part uh of segment uh right now.

Speaker B: I didn't get your question. What do you mean by what really

Speaker A: why those particular sectors uh segments uh specifically guests.

Speaker B: Now if you want to say I don't like to this Generation Z Alpha and these I like to say I like to describe it as modeling guests. I don't know. This is what. So it will combine all these generations modern gas now um wants to uh. They need a budget of 300 to 600700 real maybe around 200. We are talking about 150 to $200 maxi and they want an experience uh or they want a hotel with or it they think or they want. They expect the hotel as their destination and not the city or the area where they are going as a destination. So uh. The mid scale if you provide with this limited budget on 50 to $200 such experience, such guest experience reserving the basics which include nice bed, a comfortable bed and commit high pressure shower and nice breakfast. That's what they need. That's what we think. It's more profitable on the bottom line margins also to the owners and the.

Speaker A: No absolutely. Well apart from those uh three things you mentioned as well, um how else do you create that sort of strong guest experience without over complicating the product or Obviously three factors. Anything else that needs to be considered?

Speaker B: Well simply you need to make the your hotels. First of all you need to bring the guest to your property. You need to make your hotel visible on all selling channels, distribution channels. So within excellent tech infrastructure at the back end this can be done now when the guest arrives. As simple as that. If uh yeah I mentioned before in terms of back office I mean finance and uh procurement, uh and revenue management. It's all centralized now at the front end the people has the empowerment to deal each to uh deal and serve each and every single guest as a personal with a personalized service. That's it. As simple as that. No complications.

Speaker A: Well um, how do you then balance the profitability with the service quality? We talked about how simple it is and how important it Is for the bottom line. But, but you know where, where is this sort of balance between service quality?

Speaker B: Definitely Hugger cleans would be excellent. Cross training would be perfect. That's what we are doing in our uh, and especially we scale up to 60 hotels under our direct management, more than 15 co management. Uh, this will help us uh, move the assets that we have, all the staff that we have on the team move it around. So whatever we need we can just plug and play. Uh, that's I think where we uh. That's what reflects on the bottom line. We do not manage, uh, if you want to manage the old school, the old way, uh, each team for each hotel, it will not work out definitely it will return badly on the uh, margins and on the uh, EBITDA profit lines. Yeah.

Speaker A: Well, we initially talked about how different hospitality is over uh, and change over the past uh two decades. Um in terms of uh, travelers and Saudi travelers in particular, uh and their expectations. How uh, you know, what do they expect today that for example they you know, didn't expect five years.

Speaker B: They expect to anticipate what. Sorry I've interrupted you but this is a very familiar question to me. That's why the Saudi travel exposure each and every single stay in your hotel to be uh, to be as if uh, to be uh, matching his thinking or whatever he anticipates the moment he decided to come and visit your hotel. I. E. That means what you need to, to know before he speaks, you need to know what he wants. As simple as that. Generation Z and the families also before the older generations were not like this. Now they need. They think they. You need to know whatever they want. You need to know. You need to ask them before you need to make everything ready. Uh from the smoothness taking and maybe from the bargain card if you want. Or what. Or the. Even the parking lot in the parking. Sometimes people ask they need to park their car in a special area. So you need to anticipate all these leaks. That's uh, as simple as that. That's something.

Speaker A: Yeah. That's a huge task. How do you do it?

Speaker B: Uh, the CRM plays a big role in this. Um, the integrated systems that we um. Actually we have a very huge team that follows up on all these three states. Uh so we are communicating um with these, with the guests beforehand and we are asking him according to his last day or if he is the new guest. But uh, according to our trend or whatever other guests needs we are asking these questions nowadays. We are integrating. We are working on a huge project. I think by mid 27 it will be finalized. Uh we are integrating all this with the um artificial intel AI uh and bots and agents. Um basically by. By Q4 it will end up. It will be finalized but ongo testing and ah six months before we launch it and make it uh. Yeah.

Speaker A: Exciting. Exciting. Very very forward thinking as well. Well um. Talking about uh. The development uh uh of the hospitality market in Saudi Arabia and uh. As it continues to expand its tourism offering as well. What kind of hotels do you think uh the market would need more um we obviously touched upon on the budget and mid scale but do you see this sort of continuing trend or there's going to be a change uh uh. More of a different type of share. Uh uh. Offering needed.

Speaker B: Look Daria, I repeat I honestly and no I cannot see it except in the mid scale and the upper mid because at the end you need to please the investors and the profit is there is in this. In this scale. Five star and luxury hotels. Seven star upper luxury. They are doing fine but uh. It's not uh want to talk mass. Uh we want to. We will speak about mid and upper with scale and dual brand book. Okay. Because it will a bit um. Um minimize the overheads and the back at the back end. So dual branded hotels. I think it will be. It will be excellent in the future.

Speaker A: Um any. Any particular trends that happening in Saudi Arabia at the moment that you are particularly excited about? If we're talking about just general wider hospitality and travel market for the time

Speaker B: being there's not much. There's not much um undergoing except whatever is undergoing under whatever is seen in the last two to three years. But I think uh last week we were in the Saudi with the some people from the Saudi Ministry Ministry of Tourism. Uh it will be alone a new strategy in marketing the destination. Um very recent or think it will be launched in Q4. This will help a lot. And then what's when will this some projects like Kingston park it will open in Q1 I think 2027 the first phase would uh be uh. It will help also uh this will change a bit but until 20 end of 27 I don't think there will be like a huge change in Riad. I'm talking about Ria. Yeah 2028 it will move Fantastic.

Speaker A: Well we are only a few days away from uh FHS Saudi Arabia and as ah uh one of our wonderful partners as well at the event. What sort of conversations are you most looking forward to having with the industry there and uh just uh generally what

Speaker B: are Your plans, I don't know if you knew. Uh, we recently opened, opened a um department in our or a division in the group. Uh, we are taking over management, we are taking over the hotels now we are managing, uh, we have talks with. I don't want, it's, there's, it's still confidential. With uh, chains a big news is to be co brand or co manage properties but through us, basically it's their um, it's our brand but under the um, white label by the uh, by one of the biggest brands uh, that we know, biggest chains that we know. Um, this is our aim for OpenHS. Um, I think uh, owners or investors, they are re, um, rethinking about the hospital hotel economics if you want to put it that way. What do I mean by that is that uh, they are not looking now for big huge names uh, and buildings. They are more focused on profits and returns on investment and IRRs. Uh, it's not like 20 years back it's opening hotel only for VR or just like for, and just I, I, I inject money from the other business here now. No, uh, investors, they want to generate profit out of this and they want to scale up and this is where the opportunity lies.

Speaker A: And if, if someone is uh, still figuring out whether to attend the event or not. Why, why, why, why they should uh,

Speaker B: in your opinion going back to the first question or the second, I don't remember. Uh, if a hospitality lady or a gent wants to develop, he needs to attend such events for networking, to know what is going in the market, to learn about the investor mind, to learn about the management, uh, company's mind. So uh, networking is the blood or the oxygen of hospitality. So you cannot live without or she cannot live for them. So they need to and I, yeah,

Speaker A: can I, can I uh, can I steal that quote that uh, networking is the oxygen of the hospitality industry?

Speaker B: Definitely.

Speaker A: That's wonderful. Thank you so much.

Speaker B: There's some uh, trend on it. I need some money back. It's all about the profit margins.

Speaker A: Deal? Deal. Absolutely.

Speaker B: Perfect.

Speaker A: Well, wonderful, uh, thank you so much Dori, uh, for all the insights. Uh, wonderful to be speaking with you and I really look forward to welcoming yourself and uh, Ivar to FHS Saudi later this month. Thanks so much again and we'll see you soon.

Speaker B: Thank you Daria. Thank you.