As most of us know by now, tourism is one of the main pillars of the Saudi Vision 2030 economic reform plan aimed at weaning the country off its dependence on oil revenue.
Last year, the Kingdom opened up to international tourists, launching a new visa system while appealing to foreign companies to invest in the sector, a move which was predicted to contribute more than 10 percent to the gross domestic product by 2030.
Prior to that, a number of new cultural destinations, such as AlUla and Diriyah, were launched by the Public Investment Fund (PIF) and future entertainment destinations include the Six Flags amusement park in Qiddiya, an area just outside Riyadh, ultra-luxury Red Sea waterfront resorts, and the iconic NEOM city which will attract tourists and artificial intelligence entrepreneurs.
Despite Saudi Arabia’s economic contraction this year as a result of the coronavirus disease (COVID-19) pandemic and associated drop in oil revenues, there is a growing confidence in the private sector over the long-term outlook for the country’s tourism sector.
This optimism is driven by the latest developments in the tourism sector around the world which has been faced with unprecedented challenges due to travel restrictions imposed by governments to stop the spread of COVID-19.
Last week, the Saudi government approved a Tourism Development Fund with an initial capital of SR15 billion ($4 billion). It will launch a range of equity and debt investment vehicles where proceeds will be deployed to support mixed-use destinations, address gaps in the tourism value chain, and enable technologically enhanced tourism.
The Ministry of Tourism is handling strategic and regulatory control of the industry in Saudi Arabia, and the Saudi Tourism Authority is responsible for destination promotion and tourist experience.
Collectively, these entities will collaborate to evolve and enhance Saudi Arabia’s tourism eco-system for decades to come.
Vision 2030 will cater very much for future generations of Saudis, and the tourism developments springing up all over the country will hopefully encourage them to spend summer breaks and other holidays locally.
My teenage children said they would definitely prefer to holiday in the Kingdom if its attractions matched those of other foreign destinations.
A year ago, I wrote an article about local tourism, highlighting the importance of the sector as a defensive investment strategy. Despite the current pandemic, I believe that this investment strategy still applies.
Not only will religious tourism to Makkah and Madinah flourish by the enhancement of the transportation and hospitality infrastructure in the holy cities, but new developments and destinations supported by the fund across the country will help to satisfy tourism objectives covering areas including entertainment, wellness, culture, and nature.
In view of its importance to Vision 2030 and the promotion of foreign direct investment into the country, there will be a panel on tourism during the forthcoming BMG Economic Forum on July 15, followed by a classical music concert conducted by musicians from G20 countries playing Saudi national tunes in classical notes format at one of the iconic music halls in Vienna.
The longer-term plan is for the G20 orchestra to be invited to Saudi Arabia to play in front of local tourists.
Basil M.K. Al-Ghalayini is the chairman and CEO of BMG Financial Group.