Hotels in Saudi Arabia are systematically underperforming in the F&B mid-market. Not because of talent or capital - but because of how F&B is framed, contracted, and delivered. Working in the Kingdom, it’s a topic that gets discussed pretty often, yet all that chat seems to circle around without offering real answers.

So, let’s change that in 2026 and look at why hotels are falling behind in KSA’s F&B mid-market and what needs to change.

Owner Expectations vs. Contractual Reality

Owners increasingly expect hotel operators to deliver market-leading F&B concepts. Yet in many cases, F&B barely features in the Hotel Management Agreement (HMA).

This disconnect creates predictable tension:

• Owners may expect every restaurant to be a breakout destination success.
• Operators are contractually set up to deliver essentially functional outlets. 

Franchising and leasing are not universal panaceas for F&B success! Both must be carefully considered, starting with whether the tenant or franchisor is as committed to the project as the core stakeholder team. If not, it quickly becomes apparent.

If F&B is meant to be a value driver, it must be recognised as such –contractually, strategically, and financially. Hotel Management Agreements need tightening, and F&B needs a defined commercial mandate rather than a vague aspiration.

Concepts Are Created Far Too Late

Too often, F&B concepts are an afterthought – introduced after the design is complete. At Keane, roughly one in three briefs we receive involves retrofitting a concept into a finished space. That’s equivalent to designing a factory before deciding what it will produce, or building a fashion store before knowing the brand.

The result is:

• Concepts that are misaligned with the market.
• Inefficient layouts.
• Too much/too little kitchen or front-of-house space.

At times, we find the kitchen planner is already in the room, and the concept is almost fully cooked before we’ve had the opportunity to shape it. F&B strategy is ideally defined before architecture is finalised, not squeezed in afterwards. When it is, the risk of needing a costly refurbishment within just a few years rises dramatically.

A Broken Ecosystem

The coordination between owner/developer, architect, operator and concept consultant is often fragmented. When this happens, F&B loses coherence early.

Common symptoms include:

• Architects are often not briefed on the commercial importance of delivering an effective F&B strategy.
• Restaurants hidden on mezzanines and other floors with no street presence.
• Insufficient and inefficient space.
• Rooftop venues without dedicated elevators.

The fix is simple: bring F&B concept specialists in as early as kitchen and facility planners are involved. One informs the other. When this doesn’t happen, everyone loses.

Gap in Confidence

Independent F&B in the mid sector has existed for decades in Riyadh and Jeddah, especially, and has grown in recent years – we sense that many hotels simply don’t believe they can compete. And yet, hotels hold significant advantages:

• Stronger operational infrastructure.
• Higher staff calibre and welfare.
• Access to capital and systems that independents can only dream of.

Capability exists; confidence and intent are what’s missing. 

The Market Moved. Hotels Didn’t.

Saudi Arabia has changed – fast. Municipal regulations have eased around:

• Gender separation.
• Music.
• Operating hours.

Yet many hotel F&B concepts still feel designed for international transient travellers guests rather than the Saudi domestic market surrounding the hotel. Common gaps include:

• Absence of a clear narrative; a storyline.
• Generic ‘luxury’ concepts with no cultural connection.
• Limited engagement with Saudi cuisine, identity, or design language.
• Weak digital presence in a mobile-first market.
• Little integration of social, delivery, or influencer ecosystems. 

In today’s KSA, if your restaurant doesn’t live online, it barely exists.

Stretched Corporate F&B Teams

The media is reporting on large-scale pipeline projects for hotel groups in Saudi Arabia; some operators are targeting 50–60 openings by 2030. And yet a number are trying to deliver this with:

• Under-resourced regional F&B teams.
• Teams based outside the Kingdom.

For this reason, the corporate F&B team begins to focus almost exclusively on the growth pipeline, leaving little time to focus on the needs of the existing F&B portfolio.

 This leaves three options:

• Using AI to fill the gap, yet it remains poor at predicting how people actually dine.
• Increase corporate F&B resources.
• Allocate sufficient budgets to experienced third-party concept specialists.

No F&B Owner

In some hotel groups, there is no corporate F&B support, or it sits under regional operations, utilising existing F&B operators assigned to properties. Operations teams are already stretched and expecting them to also deliver innovative, trend-leading, commercially competitive concepts is unrealistic. F&B development thrives when it has:

• Clear ownership.
• Dedicated leadership.
• Decision-making power on the ground in KSA, not offshore.

Without this, concepts drift, accountability blurs, and performance suffers. So what does a reset actually require?

Time for a Reset

The good news? Owners and asset managers are waking up to the opportunity in the mid-market. They recognise that F&B is no longer a support function - it’s a primary driver of:

• Footfall.
• Shaping the overall hotel brand experience.
• Non-room income. 

The F&B mid-market opportunity in Saudi Arabia is wide open, and hotels are missing it. This isn’t a capability problem; it’s a failure of planning, confidence and early intent. As long as F&B is treated as an afterthought, hotels will continue to lose ground. The market has moved on – it’s time for hotels to do the same

Stefan Breg - Managing Partner - Consulting