A Big Undertaking

INVESTMENT

The government has, over recent years, outlined a robust investment program for the tourism sector, in what it hopes will become a significant vehicle for job creation and economic diversification. According to an Aranca report on MENA tourism and hospitality, investment in the sector is expected to grow at a CAGR of 4%, reaching SAR30.9 billion by 2023. That will put the sector’s contribution to GDP up to SAR83.7 billion by 2023, or 9% of current GDP. Elsewhere, the number of tourists visiting the Kingdom is expected to rise at a CAGR of 2% to 21.3 million by 2023, with revenues up to SAR60.9 billion by the same year.

And the government, aware of the growing interest, has also set out a plan to boost capacity at its most popular airports. Approximately $30 billion is to be spent revamping airports, including those in Jeddah, Riyadh, Dammam, and Medina, of which $10 billion will be private investment. So far, $12.5 billion has been earmarked for the four mentioned air hubs, which handle over 90% of total air traffic through the country, as well as over 70% of domestic travel. And according to official figures, 32 million domestic tourism trips were taken in 2009, which, when contrasted with the estimated 16.7 million inbound tourist arrivals in 2014, suggests that domestic tourism is where the real opportunity lies. And as it has also been recorded that over 8 million Saudi Arabians travel abroad every year, the government is keen to keep some of that bounty in the Kingdom. With domestic tourism expected to grow to 128 million trips and 640 million nights by 2019, the tourism sector thus represents a key area of economic diversification.

HAJJ & UMRAH

Aside from a bustling international business community, the majority of foreign arrivals in Saudi Arabia come to perform the Hajj or Umrah. Visas are required for both, albeit at no cost, with locals also required to obtain a visa for the Hajj.

In 2013, 1.38 million international pilgrims from 188 different countries arrived for the Hajj, which occurred in October. This was down from 1.75 million international pilgrims in 2012 due to concerns over the MERS virus. Also in 2013, 800,000 local pilgrims performed the Hajj, down from double that figure in 2012. The authorities, however, have announced that the Kingdom is ready for the 2014 pilgrimage.

Other interesting figures from the exceptional religious gathering include the 45,000 tents that make up Mina, or the Hajj tent city. Helping to make sure that the yearly pilgrimage goes off without a hitch, 18,000 officers helped to direct the flow of visitors to sites in 2013, while 200 ambulances were on standby. Approximately 5,000 security cameras also observed events, 20.7 million liters of Zamzam water, which flows from the well of Zamzam and is believed to have medicinal properties, distributed, and 770,000 sheep were sacrificed as part of Eid Al-Adha at the end of the Hajj.

For those performing the Hajj or Umrah, however, the once-in-a-lifetime trip won’t necessarily have to end with the drawing to a close of the pilgrimage. According to government plans, the tourism sector could soon be opened up, with those having arrived to perform the Umrah allowed to convert their pilgrimage visas into tourist visas.

ANTIQUITIES

The Royal Commission for Tourism and Antiquities has been instrumental in developing a new antiquities law, which was recently approved by the Council of Ministers and now awaits implementation. The work of the Commission has also resulted in the first public-private business association in Saudi Arabia, with associations to be formed in the fields of accommodation, tourism and travel, and tour guides. “Tour guides, as an industry, were practically non-existent in Saudi Arabia. Now, we have more than 250 fully trained tour guides,” said HRH Prince Sultan bin Salman of the Commission. And while the antiquities law still has much to achieve, Prince Sultan bin Salman is enthusiastic about its potential; “We are rediscovering our history and the history of Islam with these new initiatives… Never before in the history of Saudi Arabia have we had so much work happening at the same time,” he added, before giving TBY a hint at the scale of the effort to protect some of the Arabian peninsula’s most valuable treasures: “There are more than 30 archaeological teams from all over the world excavating in Saudi Arabia,” he concluded.

And there is certainly plenty to see across the Kingdom’s vast landscape, which has, over history, attracted great civilizations including the Ottomans, the Nabataeans, and various Arabian kingdoms. According to Prince Sultan bin Salman, SAR700 million has already been spent restoring Ottoman buildings, including the historic Ottoman railway station at Medina, a part of the Hejaz Railway Museum.

An affluent population is likely to keep the tourism sector ticking over in domestic terms, while the Hajj and the Umrah will continue to be the main tourist draw for the Kingdom. With an increasing number of business visitors, coupled with new legislation to open up new areas to international arrivals, the sector is highly likely to continue upping its contribution to the Saudi Arabian economy in the years to come. Investment is now the name of the game, which will be a boon for new graduates looking for domestic employment, as well as the construction sector as it gets to work building new hotel capacity and revamping the Kingdom’s existing airports.