Investments will boost the Saudi leisure tourism sector


September 15, 2020 | By RetailME Bureau

Investments will boost the Saudi leisure tourism sector, as mega mixed-use tourism projects worth $810 billion (SAR3,038 billion) promise to transform the Kingdom’s tourism landscape between 2020 and 2030, indicates research conducted by the Middle East and North Africa Leisure Attractions Council (MENALAC).

“Mega tourism projects being developed by Public Investment Fund will be spread over an area of more than 64,634 square kilometres, with a value exceeding $810 billion (SAR3,038 billion),” according to Saudi Commission for Tourism and National Heritage (SCTH), the country’s tourism regulator.

Among these, the $500 billion (SAR1,875 billion) Neom leads the list of the mega projects – which once completed, will deliver a futuristic mega sustainable city, followed by the $10 billion (SAR37.5 billion) Qiddiyah Project, spread across 334 square kilometres in Riyadh.

The third project is Amaala, or the Saudi Riviera, located in the northern region with an area of 3,800 square kilometres, and developing islands in the Red Sea with a total area of 34,000 square kilometres.

Commenting on how Investments will boost the Saudi leisure tourism sector, MENALAC board member Mishal Al Hokair, said, “Saudi Arabia has an array of dynamic plans and attractions planned over the next few years, each of which will add to the fast-growing leisure and entertainment sector. Our Vision 2030 will change the entire economic and tourism landscape of not only Saudi Arabia but the entire Middle East region, which will have a massive positive knock-on effect on the leisure tourism industry.”

“Once the current COVID-19 situation improves, the investment and development in Saudi Arabia’s tourism sector will bring massive opportunities for the industry. It is time for everyone to prepare for the next big growth,” he added.

In addition, SCTH will be developing museums in various Saudi regions and preserving Saudi heritage with a cost of more than $1.3 billion (SAR4.8 billion).

“Saudi Arabia foresees that national tourism will significantly contribute to the gross domestic product as the most growing non-oil economic sector. The tourism revenues increased to more than $51 billion (SAR191.3 billion) in 2017, and to more than $56 billion (SAR211 billion) in 2018,” SCTH said in a report.

The total number of inbound and outbound tourist trips in Saudi Arabia is expected to reach 62 million trips, where tourism revenues are anticipated to exceed $37 billion (SAR139 billion) by the end of 2020.

Changes and growth in Saudi Arabia’s tourism landscape will help leisure attractions operators in the Middle East and North African countries. The recent reopening of the land borders by Saudi Authorities will help boost regional tourism in the GCC region.

SCTH plans to facilitate investment of $46 billion (SAR171.05 billion) that will boost the tourism industry capacity and the number of hotel rooms to 621, 600 rooms and boost the tourism sector’s contribution to the GDP by 3.1%, and increase direct employment to 1.2 million jobs.

“The latest news from Saudi Arabia is very encouraging. The government wants to push ahead with the mega projects that will not only boost the country’s GDP but also the tourism sector. It will create massive opportunities for all the players in the leisure attractions business and we could count on an exciting future for the industry in the MENA region,” stated Prakash Vivekanand, board member, MENALAC.

According to Saudi Arabia’s General Investment Authority (SAGIA), the country wants to increase investment in recreational facilities to 6% from the current 2.9% per annum – more than double the current level, as part of Saudi Vision 2030.

“In 2017, the Saudi Arabian tourism sector attracted investment of $28.6 billion (SAR107.28 billion), which was six times the world average in tourism capital investments,” according to a report by SAGIA. “Investments are expected to rise 5.5% per annum over the next 10 years to $54 billion (SAR203 billion) per annum.”

Despite the current situation with regard to COVID-19, Saudi Arabia is pushing ahead with the construction of some of these massive projects. A number of construction contracts have recently been awarded following the partial re-opening of the economy after the lockdown.

Red Sea Development Company has recently awarded construction contracts worth $1 billion (SAR3.75 billion), while Neom has awarded Bechtel and AECOM programme management contract.

“The leisure attractions industry in the MENA region is upbeat with the new opportunities that are arising in Saudi Arabia. We see massive opportunities for our industry being created by more than a $1 trillion (SAR3.75 trillion) investment in the Saudi economy between now and 2030,” observed MENALAC secretary-general, Rosa Tahmaseb. “I urge the leisure industry stakeholders, both our suppliers and operators, to explore these opportunities and ascertain how they can take a leading role in helping Saudi Arabia develop its leisure facilities in the coming decade.”

“Despite the short-term setback created by the COVID-19 pandemic, the long-term prospects for our industry remain bright. One example of this can be seen in the dynamic projects planned for Saudi Arabia,” she concluded.

 

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