Saudi’S Boutique Group Plan To Triple Luxury Palace Hotel Portfolio

Saudi Arabia’s Boutique Group is planning to potentially triple its palace hotel portfolio by 2030 and eyeing international expansion opportunities, as the luxury hospitality company seeks to establish itself as a global cultural heritage brand.

The Public Investment Fund-owned company is evaluating several additional palaces for conversion into luxury hotels, with plans to expand beyond its current three announced projects, Chief Executive Officer Christoph Mares said.

“A doubling, possibly tripling until 2030 of the first three is a very good possibility,” Mares said. The expansion plans are currently under review by the board of directors.

The company, which currently has three palace projects in development including the flagship Red Palace in Riyadh, is also exploring opportunities to export its palace-to-hotel conversion expertise to other markets, particularly in Europe where historic properties face maintenance and viability challenges.

Mares highlighted potential opportunities in European landmarks, suggesting that such properties might need to consider new operating models to remain sustainable and become profitable.

“When you look at Europe, maybe you have a lot of palaces. They have more palaces than they know what to do with,” Mares said. “It’s not being maintained, it doesn’t make any money, insurances, etc. It doesn’t have the vibrancy that they potentially should have.”

The CEO specifically pointed to Buckingham Palace’s current operational model, suggesting that maintaining large sections of such properties for limited public access might become unsustainable. “Prince Charles [is] looking very carefully what he should be doing with Buckingham Palace, where nobody is anymore, because the fortune to maintain it in the heart of the city.”

However, Mares emphasised that international expansion would only be considered after establishing a strong track record in Saudi Arabia. “Let’s learn how to do it really well at home, and then we can talk about that next. But it is a consideration,” he said.

The company is also exploring potential diversification into other luxury hospitality segments, including branded residences and luxury trains. “The first thing that would come to my mind as a natural extension would be possibly very sophisticated, very elegant and historic framework, maybe of service and branded residences,” Mares said.

Boutique Group’s current portfolio includes the Red Palace, Al Hamra Palace in Jeddah, and Tuwaiq Palace in Riyadh’s Diplomatic Quarter. The Red Palace project, which is more than 60 per cent complete, will feature approximately 70-100 keys and is scheduled to open in April 2026.

The expansion plans are supported by what Mares described as “patient and generous shareholders,” referring to the Public Investment Fund, Saudi Arabia’s sovereign wealth fund. “Their support and their drive and their passion and their patience, most importantly in these kind of projects, has been exemplary,” he said.

The company expects to create approximately 1,000 jobs across its three announced projects, including corporate and individual property leadership teams. The expansion is part of Saudi Arabia’s broader Vision 2030 initiative to develop its tourism sector and diversify the economy away from oil.

Mares, who joined Boutique Group in January 2025 after nearly 25 years at Mandarin Oriental Hotel Group, said the company’s focus on cultural heritage and luxury hospitality creates a unique proposition that could resonate globally.

“These are brands that have been in existence over decades, over hundreds of years,” Mares said, acknowledging the challenge of establishing a new luxury brand. “We will be able to break into this sphere, I would think, with time and support and great relationship and marketing and execution.”