Saudi tourism well set for take off

29 September 2019
The opening up of the Saudi tourism sector is a significant step for the kingdom’s reform agenda, but the benefits of change must be inclusive

The opening up of Saudi Arabia's tourism market to international visitors is a significant step for reformers in Riyadh. And it is one that has the potential to deliver rapid results in terms of visitor numbers and investments.

Tourism is one of the six sectors earmarked for strategic development in the kingdom’s Vision 2030 reform agenda announced in 2016 by Crown Prince Mohammed bin Salman.

Diversification of the Saudi economy away from oil is the primary objective of Vision 2030 and tourism is right at the front of the diversification agenda.

Tourism offers the kingdom a rich seam of new revenues that is completely independent of oil, and it will create large numbers of exciting jobs and career opportunities for young Saudis.

Saudi tourism set to flourish

With about 18 million visitors in 2018, Saudi Arabia is already the region's biggest tourist market in terms of international visitors.

But the vast majority are religious pilgrims visiting the holy cities of Mecca and Medina. These travellers tend to spend little and have strict limits on their pilgrimage visas.

Most other international visitors to the kingdom are business travellers, who also tend to limit their spending and leave after their business is finished.

On paper, the kingdom is extremely well positioned to grow its tourism sector.

The relaxation of visa restrictions opens up a huge territory with attractions that include thousands of miles of Red Sea coastline, spectacular desert landscapes and incredible ancient cultural sites, including five Unesco sites, which Riyadh hopes to increase to eight in the near future.

Riyadh is also steering billions of dollars of investments into modern attractions such as luxury resorts, themes parks, concerts and sports events. Included in this are megaprojects such as the Red Sea Project, Amaala and Qiddiya entertainment city.

Riyadh wants 100 million visitors a year by 2030. This is a huge increase. But there is no doubt that Saudi Arabia is set to see a long-term surge in visitor numbers.

This will drive significant new non-oil revenues for the country. It will attract investment. And, most important of all, it will create new jobs.

Reform builds momentum

The past 12 months have seen significant progress in Saudi Arabia’s reform programme.

But, real change always takes time in Saudi Arabia and many of the reforms that have been announced over the past few years have been bogged down by bureaucratic inertia or political resistance.

This has been accompanied by a lack of clear information that is creating confusion and frustration for investors.

To overcome this inertia, Saudi Arabia’s reformers must continue to build internal capacity to ensure that institutional and bureaucratic barriers are removed.

Most important of all, they must ensure that the benefits of the reforms reach everybody in the kingdom and are not felt only by a rich, urban elite.

In particular, Riyadh must ensure that the kingdom’s rural youth population does not miss out on the benefits of the reform agenda.

Read MEED’s Saudi Arabia Special Report published this week here

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