Saudi's Boutique Group CEO Targets 2026 for First Luxury Palace Hotel

Skift

08-05-2025

The group has yet to open a hotel, but the new CEO says he's confident in the rollout plan.
Boutique Group, the Saudi hospitality brand focused on converting historic palaces into luxury hotels, plans to open its first property — the Red Palace in Riyadh — in early 2026, with additional openings scheduled through 2030.
The kingdom's crown prince launched Boutique Group in 2022, and it is part of the country's Public Investment Fund.
Three years in, the group has yet to open a hotel, but new CEO Christoph Mares says he's confident in the rollout.
'The last six months have been very focused on getting the Red Palace [in capital city Riyadh] structured for opening,' Mares told Skift at Arabian Travel Market in Dubai last week. 'We will be ready by early Q2 2026 to open the first palace, I'm confident.'
Another site — the 'Japanese Palace' in Jeddah — will open in late 2026.
Two more historic sites will follow in late 2027 and early 2028: Al Hamra Palace in Jeddah with 77 keys and Tuwaiq Palace in Riyadh with 96 keys. All properties will include extensive wellness areas and multiple restaurants.
These four properties make up phase one of Boutique Group's plan.
'The shareholders are expecting a level above Mandarin Oriental — potentially in the range of Cheval Blanc, Aman, that sort of bracket,' Mares said. 'Our hotels will be relatively small in key count, but the palaces themselves are enormous.'
U.S. Business Will Be 'Crucial'
One big issue: Will there be enough demand for more 5-star accommodations? In addition, Skift has reported that Saudi has too many high-end hotels in development and not enough in the mid-tier range.
For now, most of Saudi's tourism has been domestic: The Saudi Minister of Tourism has said it had 30 million international tourists last year, out of a total of 127 million. The goal is for 70 million international tourists by 2030.
But Mares, who until January was COO at Mandarin Oriental, said there's a strong international appetite for experiencing Saudi heritage.
"If one truly wants to discover Saudi and where it originates, we'll find our market. At the top end of the market, for international travelers, to have heritage, culture and luxury in one place, no doubt it will have a following."
Aman also has five projects in the pipeline across Saudi Arabia, including sites in AlUla and Diriyah Gate.
Mares also pointed to which markets Boutique Group would target.
'The Saudi market will be a key pillar for us, followed closely by the GCC, and then internationally. We see strong potential in Asia with the help of Riyadh Air," he said, referring to the new airline set to launch later this year. "Europe already has a strong following for the Gulf, and we can build on that.'
He believes the U.S. will be a core market, despite Riyadh being a 12-hour flight from New York and lacking direct West Coast connections — something Riyadh Air hopes to address.
'It's very critical how we make the entry into the U.S. — through Virtuoso, through American Express, and so on. It's the largest luxury travel market in the world. 5% of a very large market is better than 10% of a very small one. The critical mass is substantial. And don't forget the number of U.S. expats living in the Gulf.'
'No Cutbacks, No Delays'
Mares' predecessor, Mark DeCocinis, said in 2023 that the first palace would open in 2025. Mares said Boutique Group hasn't faced delays and isn't seeing signs of budget cuts.
'We have our finance plan, our budgets approved, and construction is on time. It's a tight schedule for opening, but a realistic one. Every week will count," he said.
'We've had no cutbacks, no changes, none whatsoever. No delays, no requests to slow down. Everything is full steam ahead for the first palace in Q2 next year.'
Phase 2 Growth Plans
After the first four properties open, phase two will begin.
"We'll have a portfolio together by 2030 for sure - there are other palaces under consideration which we are evaluating. Those are all in Saudi. We have Medinah, Makkah, Taif, so many destinations one could consider where there are unused palaces."
"I see myself in Boutique Group for the duration, into phase two. We're considering branded residences and international management agreements for other palaces. We're evaluating if we should do that. We've had a few approaches."
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