POS Systems Drive Growth in Saudi Hospitality Sector

In the evolving landscape of Saudi Arabia’s economy, the hospitality sector, particularly restaurants and cafes, has experienced significant growth driven by demographic shifts, changing consumer preferences, and policy reforms aligned with Vision 2030. The emergence of Point-of-Sale (POS) systems has played a pivotal role in supporting the expansion of this sector, enhancing financial transactions and operational efficiency.

Studies have shown that POS systems not only facilitate transactions but also contribute to operational efficiency, inventory control, and customer loyalty programs. The increasing adoption of POS systems reflects the broader trend of digital transformation in the food services industry, driven by consumer preferences for convenience, efficiency, and enhanced customer experiences.

The Saudi restaurant and cafe market has witnessed a surge in new establishments, catering to diverse consumer preferences for international cuisine, healthy dining options, and traditional Saudi dishes. This growth underscores the sector’s importance in driving economic and social development in the country, with POS systems becoming essential tools for enhancing consumer engagement and transaction growth.

Regulatory changes, such as the introduction and adjustment of value-added tax (VAT), have influenced consumer behavior and impacted POS sales in Saudi Arabia. The COVID-19 pandemic has further accelerated the shift towards digital payments, emphasizing the importance of adapting to changing consumer preferences and market dynamics.

The study conducted path regression analysis to investigate the impact of various macroeconomic variables on POS systems in the food sectors of Saudi Arabia. The results revealed a positive correlation between factors like per capita income, population size, credit card loan values, and the COVID-19 crisis with POS sales. Conversely, higher inflation and VAT implementation were associated with a decrease in POS transactions.

The relative importance of these variables on POS sales was ranked, with population size having the most significant influence, followed by the COVID-19 crisis, inflation, credit card loans, per capita income, VAT, and the number of POS devices. These findings provide valuable insights for policymakers and business leaders on strategies to promote cashless transactions and enhance sectoral resilience amid economic fluctuations.

In conclusion, the study underscores the critical role of macroeconomic factors in shaping POS sales in Saudi Arabia’s food sectors. By understanding the impact of inflation, VAT, population dynamics, and other variables on consumer behavior and transaction volumes, stakeholders can make informed decisions to support the growth and sustainability of the hospitality industry in the country.