Saudi Arabia Tourism Industry

Saudi Arabia Tourism Industry

Read Time: 6 Minutes

Tourism plays a pivotal role as an engine driving Saudi’s post-oil economy, serving as a key pillar of its 2030 Vision. And the Kingdom is well on track, having recently revised its target upward to 150m visitors by 2030. To learn more about this growing market, GLG’s Florian Guillot interviewed industry expert Ahmad Arab, the Founder and Chairman of the Board of the tourism and hospitality firm DRB Arabia. Previously, he was a deputy minister in charge of strategy and business intelligence at the Ministry of Tourism of Saudi Arabia.

Saudi Arabia revised its overall target to 150 million visitors by 2030, up from the initial 100 million. Would you say it’s as optimistic as this suggests and how do you see this panning out?

When the national tourism strategy was approved back in 2019, the target of visitation was around 100 million, like you said. The split itself was a little bit 50-50 between domestic and inbound. But what happened in light of COVID and what happened in the aftermath of COVID is that visitation from a domestic point of view has risen significantly.

Last year, we achieved the 2030 target of 100 million visitations, but we did not achieve the targets when it comes to inbound. We overachieved the targets when it came to domestic.

The national tourism strategy is actually being revised as we speak, the north star when it comes to visitation has risen to 150 million, with almost 80 million from domestic and about 70 million from inbound.

From a domestic point of view, I think that, in essence, is easier. But what the tourism sector is trying to attract now is inbound visitors to bridge a gap of 50 million, because today we are in the range of 25 to 27 million visitation inbound, but that number needs to be tripled to be about 70 million by 2030.

You mentioned the key metrics that the Ministry of Tourism is focusing on, as it’s very publicly disclosed. Could you please run us through some of the key metrics and how the kingdom is doing on each?

What I want to talk about is about the GDP contribution. The GDP contribution target was announced, if I’m not mistaken, but in the national tourism strategy, it’s about 10%. Last year, it was from the non-oil, GDP contribution was 7%.

We talk about the sector contribution in GDP, you talk about government projects, you talk about private sector, you talk about FDI, and you actually incorporate the visitation spend as well. That all contributes to the GDP. So this is the second big KPI.

The third big KPI is about job creation. The target is to create a million jobs by 2030, totaling 1.6 million jobs by 2030. So in 2019, the current jobs were about 600K, tourism wants to add another million.

Do you mind giving us an overview of the main giga projects, the ones that contribute particularly into Saudi Arabia’s massive investment into tourism?

The giga projects, most of them are being anchored on tourism and getting visitors in. So the biggest giga project that we have is building the city of NEOM, and the different projects within NEOM. Neom is one giga project that has multiple, I’m not going to say giga projects, that defies the purpose, but it has multiple mega projects within it.

So NEOM is a city that has, off the top of my head, four or five big projects that constitutes NEOM. One related to a winter destination in Trojena. We have a new innovative port in Oxagon. We have small destinations in Sindalah and Aqaba Bay that are going to be live this year and next year. You have The LINE itself, which is the flag product of Neom, and you have multiple other smaller projects within NEOM. So this is just one giga project that sits in the northwest of Saudi.

And then as you go south, you have the Red Sea Project and the Amaala projects, both of them having a take on what they need to do when it comes to sun and sea, and it competes with the likes of the Maldives, the Seychelles, Mauritius and so on and so forth. And this primarily is for tourism.

If you go a little bit south, you have multiple projects within Jeddah. Jeddah is the main port of Saudi. You have Jeddah Historical City, which is an old city that’s being renovated to be a tourism destination. You have Jeddah downtown, which is a new area in its entirety. If you go further south and go center, you’re going to have Riyadh, you have Qiddiya, which is a destination for gaming and theme parks. I can talk about giga projects for days at end.

One of the key issues for any player in the sector is to obtain qualified personnel. How do you think that is going and is Saudi Arabia on track to achieve its goals? Are there enough qualified personnel?

When it comes to a supply of human capital, there is not. That’s why there is a big initiative within the government to actually train, educate, and get people more involved within the tourism sector. The biggest KPI is they want to create a million jobs by 2030, and you cannot create a job without training them, the workforce, into that specific field. From let’s say from executives, to hotel managers, resort managers, to technicians, frontliners, concierge or waiters, baristas and so on.

And there is a big initiative within the country to initiate training centers, national training centers, private sector led training centers to educate citizens on what tourism has to offer, and that naturally there are careers that you can start in.

About Ahmad Arab

Ahmad Arab is the Founder, Chairman of the Board of DRB Arabia since last year, which is a tourism and hospitality firm specialized in the Saudi market. Previously, he was a deputy minister in charge of strategy and business intelligence at the Ministry of Tourism of Saudi Arabia, and before that deputy minister in charge of strategy at the Ministry of Investment of Saudi Arabia.

This article is adapted from the GLG Teleconference “Saudi Tourism Industry” hosted on February 12, 2024. If you would like access to this event, or would like to speak with experts like Ahmad Arab, or any of our industry experts, please contact us below.

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