RIYADH — Since the beginning of summer vacation, hotels and furnished apartment buildings in main cities have seen a marked rise in occupancy. With the peak in demand, rents of hotels and furnished apartment buildings have also jacked up 150 percent. The increase in the rates, though against the set rules, offsets the losses the housing sector suffers during the low season.
Investment in furnished apartment buildings has been on the increase and many investors buy such buildings and rent apartments out to families during the holiday season. Riyadh sees a high demand on furnished apartments due to the large number of events held in the capital city.
“Eid Al-Fitr holiday is the most profitable season for hotels and furnished apartment buildings because many families prefer to spend their vacations inside the Kingdom and some of them come to Riyadh to enjoy the festival activities,” said an employee at a hotel here.
Mahmoud Muhammad, an accountant at a furnished apartment building, said that it was normal to increase prices to make up for the period when the market gets stagnant. “Prices are raised equally across all economic sectors when there is a high demand on a certain product. The price index rises to strike a balance between supply and demand.”
Ahmad Al-Nasser, a bank employee, considers the rise in rental prices as unjustified. “Owners of furnished apartment buildings take advantage of Eid Al-Fitr holidays and raise the price of a furnished one-bedroom apartment to SR500 per night when the original rate doesn’t exceed SR150 per night. If services provided are excellent, then it’s okay to pay this much. But high prices sometimes don’t commensurate with the quality of services offered,” he said. Concerned authorities, he said, should monitor abnormal increase in rates.
Visitors to the capital have also urged Ministry of Commerce and Industry and Riyadh Mayoralty officials to carry out inspection tours of all furnished apartments to monitor the rates that do not commensurate with the quality of services.
Nayef Muneef, a citizen, said the rates are unreasonably high and should be monitored by the Saudi Commission for Tourism and Antiquities.