Hotel Industry Regulations and Cross-Border Franchising: The Case of Saudi Arabia

Abstract

Saudi Arabia has formulated and enforced a new tourism law to develop its tourism sector with special emphasis to open more international activities in the hotel industry. The main objective of this study was to determine the influence of new regulations of hotel industries in Saudi Arabia on the decision making process of the hotel companies in relation to international franchising. Qualitative research design was used to investigate the connection between new regulations of hotel industry in Saudi Arabia and its cross-border franchising activities. Data was retrieved from two primary sources: governmental agencies and, the hotel and leisure companies involved in franchising. The main sectors covered were the investment in tourism lands, establishment of tourism based associations, and replacement of foreigners, price and classification. Data was generated through twelve in-depth interviews with the representatives of the sample companies, from April to September 2016. The primary data generated during interviews was complemented by data from industrial publications and the annual reports to know about the current status of Saudi hotel industry and the activities of the sample companies. Findings confirmed that the regulatory reforms of a hotel industry, by following new hotel-based regulations, added new vigor to hotel based industry and enhanced its international profile. The new tourism law authorized the Saudi Commission for Tourism and Heritage (SCTH) to identify and propose new lands for tourism investment, which may increase its importance among the global hotels' franchisors.

Factors Affecting Service Quality in a Saudi Hotel Industry: A Case Study in Albaha, Saudi Arabia

“…Similarly, many studies have implemented the SERVQUAL scale to measure SQ in the hotel industry (Al Khattab & Aldehayyat, 2011;Dhar, 2015;Hue Minh, Thu Ha, Chi Anh, & Matsui, 2015;Rauch, Collins, Nale, & Barr, 2015;Tsaur & Lin, 2004). Studies have highlighted the importance of service quality in Saudi Arabia because of its high tourist turnover due to Islamic pilgrimage and local tourists (Al-Ismail, Carmichael, & Duberley, 2019;Alamoudi, 2009;Aleidan, 2017;Ascoura, 2013;Ihsan & Alshibani, 2018). Therefore, by examining the factors and their impact on the SQ of hotels in Albaha province, this study utilizes SQ's five SERVQUAL antecedents.…”