The Ministry of Tourism is cracking down on room brokers with binding electronic contracts
In a strategic move aimed at enhancing transparency in Saudi Arabia's growing hospitality sector, the Ministry of Tourism a set of new regulations that reshape the relationship between hospitality establishments and commercial intermediaries. These measures aim to regulate what are known as "room brokers" by mandating legally binding electronic contracts and governing subletting processes, thereby safeguarding tourists' rights and improving operational efficiency in the tourism market.
The context of tourism transformation and Vision 2030
These decisions are particularly important given the significant growth the tourism sector is experiencing in the Kingdom, driven by the goals of Saudi Vision 2030 , which aims to attract 150 million visitors annually. With the increasing number of hotels and serviced accommodations, the need to regulate the relationship between property owners, booking platforms, and travel agencies has become crucial to ensuring a world-class tourism experience free from administrative complexities or booking manipulation.
Digital documentation and transparency mechanisms
The new regulations mandate that all tourism and hospitality facilities must exclusively document their rental contracts with intermediaries through approved electronic systems. This measure aims to eliminate paper contracts or verbal agreements that could lead to the loss of rights. The Ministry also requires the submission of accurate disclosure reports detailing the number of rooms rented to online platforms and travel agencies (both local and international) and their percentage of the total hotel inventory.
In a regulatory precedent, the ministry stipulated that licensees must provide official justifications if the percentage of rooms rented to brokers exceeds 50% of the facility's total capacity, in order to prevent monopolies and ensure the diversity of sales channels.
Protecting tourists from "booking hijacking"
The regulations put an end to arbitrary practices in transferring bookings, categorically prohibiting booking platforms and travel agencies from transferring contracted units to another intermediary without prior written consent from the tourist facility's management. To ensure guests are not negatively impacted, the regulations also prohibit transferring any pre-booked unit to a new intermediary without immediately notifying the tourist and adhering to the same agreed-upon terms and specifications.
Privacy of pilgrims and legal responsibility
Given the paramount importance of the Hajj and Umrah sector, the Ministry has restricted all rental contracts for pilgrims arriving on Hajj and Umrah visas to the officially approved "Nusk Masar" platform. This is to ensure the reliability of services provided to pilgrims and to properly document their rights.
The ministry emphasized that hospitality establishments bear full responsibility to regulatory bodies for the execution of reservations and the quality of services, regardless of the booking channel. The regulations also criminalize registering rooms under the names of intermediary companies, stressing the necessity of recording the actual data and identities of guests for security and organizational purposes, and warning violators of strict legal penalties.
