Accountability ‘crucial’ for success of Saudi Vision 2030

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• Rua Al Madinah Project coincides with soaring Saudi hotel occupancy
• Expert predicts building challenges as Madinah still receives pilgrims 
• Says all companies working on giga projects must be held accountable

Saudi Arabia is entering a “crucial” part of its ambitious Vision 2030 programme as the kingdom begins to deliver on its promises, described by a leading expert as the “moment of accountability”.

Pedro Ribeiro, the recently appointed general manager for commercial real estate services and investment firm CBRE in Saudi Arabia, told AGBI that the kingdom must now start to deliver on its promises following the announcement of many projects including the $500 billion Neom City, Qiddiya, the Red Sea Project and the transformation of Diriyah.

“All the advisors and consultants of the gigaprojects and all projects directly linked with Vision 2030 need to be held accountable. The responsibility for delivering exists, and if those advisors or consultants are not meeting deadlines, they need to be replaced.”

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“Companies that aren’t reaching the phased targets while advising on those projects should not continue to be involved with any project related with the Vision,” Ribeiro emphasised.

“We are entering into a crucial moment of the Vision 2030, the moment of accountability.”

Ribeiro’s comments follow the unveiling of the masterplan for the Rua Al Madinah Project, in an area east of the Prophet’s Mosque, by Saudi Crown Prince Mohammed bin Salman bin Abdulaziz. 

The project aims to raise the capacity to 30 million Umrah pilgrims by 2030.

It also plans to position Madinah “as a modern Islamic and cultural destination.”

After rehabilitating 1.5 million sq m, the project is set to add over 47,000 hotel rooms by 2030. 

As much as 83,000 sq m of the project’s master plan will consist of green areas, with open and green spaces comprising 63 percent of the project’s total land area.

Ribeiro, who described the Crown Prince as a visionary, said the Rua Al Madinah Project will not be an easy task and “will have its particular challenges while still receiving Hajj, Umrah pilgrims”.

“This project is aligned with the Vison to support the infrastructure services related with all travel sectors, so the numbers aim to be reached in 2030 are not only met, but will increase on an annual basis due to the quality provided. 

“It is fundamental that this project is delivered on time. That’s why I refer to accountability.

“What is being done in Saudi Arabia is not being done in any part of the world. In fact, we believe that the rest of the world will follow Saudi Arabia,” he claimed.

The project is being developed and implemented by Rua Al Madinah Holding Company, a PIF unit that specialises in development, operation and real estate investment in Madinah. 

It also offers integrated transportation solutions, including nine bus stops for visitors, a metro station, tracks for self-driving vehicles and underground parking. 

The project also seeks to enrich the quality of services provided and boost the hotel inventory of the area on the east side of the Prophet’s Mosque, including in the luxury segment.

Rabia Yasmeen, senior research consultant at Euromonitor International, said: “Saudi Arabia has traditionally been a leading religious destination for Muslim tourists and pilgrims. 

“However, as the country opens up to share its heritage and culture globally and embraces social reforms, it is attracting interest from global tourists. 

“These tourists are particularly intrigued to experience the culture and understand the heritage of the country.”

Companies that aren’t reaching targets cannot continue to work on Vision 2030 projects

Pedro Ribeiro, general manager for real estate firm CBRE

Since Vision 2030 was unveiled by the Crown Prince in 2016, the country has sought to create a progressive kingdom capable of tapping into its social, cultural and economic potential. 

The scale of the undertakings has boosted construction growth in the kingdom. According to MEED, projects with a combined value of $41.3bn were awarded in 2021.

The Rua Al Madinah Project announcement coincides with soaring Saudi average hotel occupancy rates which have increased by 19 percent in the year to June compared to the year-earlier period.

According to research by CBRE, average daily rates (ADR) increased by 13.5 percent and average revenue per available room (RevPAR) jumped by 72.8 percent in the same review period. 

Average Saudi hotel occupancy rates sit 5.1 percent lower than pre-pandemic levels, while ADR is up by 2.6 percent compared to the first half of 2019, and RevPAR is down by 6 percent. 

Riyadh and Madinah are the only two markets which have exhibited improved performance levels in comparison to 2019. 

CBRE said that with further easing of restrictions on religious tourism, it expects performance in the holy cities of Makkah and Madinah to continue to improve during the remainder of 2022. 

“With regards to business and leisure visitation, we also expect performance to improve, albeit not dramatically. 

“We believe this slower rate of improvement will be underpinned by a number of regional events scheduled outside of Saudi Arabia during the last quarter of 2022,” it added.

Saudi Vision 2030 progress

According to its official website, many “noteworthy achievements” have been made to support the kingdom’s economic diversification objectives and build a prosperous future for the people of Saudi Arabia. 

The Vibrant Society pillar has progressed as a result of adopting healthy lifestyles and serving Hajj and Umrah pilgrims from all around the world, in addition to embracing the kingdom’s archaeological sites and adding them to UNESCO’s World Heritage List. 

Dozens of cinemas have also opened, while Saudi Arabia has launched the largest reforestation programme in the world. 

The Thriving Economy pillar has achieved the 2030 target for women’s participation in the workforce, while the assets of the Public Investment Fund have grown significantly, and the contribution of SMEs to the GDP has increased. 

Saudi Arabia has also seen the largest IPO in history (Saudi Aramco) while leading the world in reforms to its business landscape.

The Ambitious Nation pillar has made progress in two strategic objectives as non-oil revenues have increased significantly and the number of volunteers doubled annually to reach 409,000 in 2020.