Why Saudi Arabia’s Tourism Sector Is Emerging as the Destination of Choice for Global Investors
Saudi Delegation to WEF is a Business Reporter client.
In Saudi Arabia, a landmark shift toward welcoming tourists from across the globe has driven major growth in visitor numbers, spurring a booming industry ripe for global investors.
For years, tourists have flocked to visit the great wonders of the Middle East and North Africa. They have traveled by the millions to amble through ancient souks, explore Roman ruins and unwind on vast, unspoiled Gulf coastlines.
The region has long been an established tourism hotspot for those seeking both adventure and year-round sunshine. Now, there’s a new focal point for international tourists looking for unique, authentic experiences.
According to recent data released by the UN’s World Tourism Organization, the sands of tourism in the Arab World are shifting. Saudi Arabia is the fastest-growing tourism destination in the G20, with visitor numbers up by 121% compared with pre-pandemic levels.
Despite being a relatively new destination on the global tourism landscape, Saudi Arabia offers history, heritage, culture, sea, sunshine and more. When the kingdom opened its doors to international visitors in 2019, the country’s tourism industry immediately began to thrive.
Visitors are quickly discovering that there is much more to Saudi Arabia than undulating dunes
In line with Vision 2030, Saudi Arabia’s national transformation program, the kingdom aims to boost the tourism industry’s contribution to more than 10% of GDP by 2030, with $1 trillion slated for investment into the sector over the next decade.
That means big business opportunities for international investors. More than 3,500 tourism investment licenses have been issued in Saudi Arabia in the past three years. And as the Saudi government continues to increase the ease of doing business and traveling to the kingdom, the sector is set to go from strength to strength in the coming years.
Simplifying travel with the e-visa
In 2019, Saudi Arabia broke new digital ground by launching an e-visa system for international visitors. In the three years since, tourism numbers have surged as people from Auckland to Anderlecht have shown a clear appetite to see and experience the real Saudi Arabia.
Visitors are flocking to cultural landmarks, from the At-Turaif District in Ad-Diriyah, a UNESCO World Heritage Site, to the Hegra archaeological site in AlUla, one of the oldest cities in the Arabian peninsula, deep in the northwestern desert. They are journeying to historic Jeddah, in the west, and discovering the ancient rock art inscriptions in Hail, another World Heritage Site, in the north. And they are exploring the world’s largest palm oasis, Al-Ahsa, in the east.
Along with this increased tourist footfall and groundswell of curiosity in Saudi’s ancient origins, businesses are identifying, creating and seizing new opportunities to expand their global footprint in Saudi Arabia, the Middle East and beyond.
World-leading giga-projects
These opportunities include world-leading giga-projects such as NEOM, Qiddiya, Diriyah Gate and King Salman Park, which, by blending innovative architecture and green technologies, are rewriting the rules of sustainable development and eco-friendly tourism.
Soudah Development, owned by Saudi Arabia’s Public Investment Fund (PIF), also features prominently among these investor-friendly projects, with plans to invest $2.93 billion as it defines a new era of sustainable mountain tourism as part of the kingdom’s ambitious environmental action plans.
Soudah Development intends to build 2,700 hotel rooms, 1,300 residential units and 30 commercial and entertainment attractions to create a luxury mountain tourism destination in the clouds. This planned infrastructure will play a key role in Saudi Arabia’s tourism push by attracting more than 2 million visitors a year, creating more than 8,000 jobs and contributing $7.72 billion to GDP by 2030.
In October 2022, Saudi Arabia’s flagship tourism project developer, rebranded as Red Sea Global, also owned by the PIF, said it would open three resorts in 2023 and 13 more in 2024.
Partner in success
Investors eyeing Saudi Arabia’s thriving tourism sector will have a partner in success: the Tourism Development Fund. Established in June 2020 to empower one of the kingdom’s most rapidly growing industries, TDF is tasked with helping Saudi and international investors access high-potential tourism investments across the country’s destinations, with $4 billion allocated to make it happen.
Ahmed Al-Khateeb, Minister of Tourism for Saudi Arabia, notes that the fund’s successful launch, even in the eye of the pandemic storm, was a “testament to the investor and private-sector confidence in the long-term outlook for tourism in Saudi Arabia.”
In October 2022, TDF signed an agreement with Dana Bay Tourism Company to invest in a closed real estate fund, worth $171.36 million, to develop a mixed-use beach resort in Dana Bay in the Eastern Province, comprising luxury villas, retail stores, restaurants and entertainment venues, a museum, art galleries and artisanal workshops along a 14-kilometer beach.
Previously, in July 2022, TDF launched a digital platform to offer financing solutions for investors and entrepreneurs in the tourism sector, and enabled automated commercial registrations that don’t require filling in data. The new portal’s launch is part of the fund’s commitment to stimulate tourism investment. Earlier this year, TDF approved six strategic tourism projects worth $400 million.
The kingdom’s doors are open for all to explore new, high-potential opportunities, and for all to discover the real Saudi Arabia.
For more information, visit: visitsaudi.com.
This article originally appeared in Business Reporter.
Image: iStock id1397522865
