PIF’s Red Sea Global plans Saudi and overseas expansion

• New project in a Saudi city expected
• Looking at 100+ international targets
• 11 more Amaala and Red Sea hotels

Red Sea Global is expanding beyond its west coast base to develop hotels and other projects in Saudi Arabia and overseas, a company executive has said.

The company will probably announce a new project in a Saudi city later this year, head of hospitality Sébastien Carre told AGBI on the sidelines of Arabian Travel Market in Dubai this week. He did not give further details. 

Red Sea Global, which is owned by the Saudi Public Investment Fund, is also looking at expanding overseas. 

“There are about a hundred-plus destinations in the world that we consider A-plus targets,” said Carre. 

Red Sea Global’s core project is to develop the Red Sea coast and an archipelago of islands opposite Egypt and its Sinai peninsula, as part of Saudi Arabia’s Vision 2030 strategy to diversify its economy. It is one of the country’s five leading giga-projects along with Neom, Qiddiya, Diriyah and Roshn.

The company’s expansion plans come at a time when government budgets, including at the $940 billion PIF, are under pressure. 

Oil prices, on which Saudi Arabia relies for 60 percent of its government revenue and almost three-quarters of its goods exports, have fallen to a four-year low as forecasts for global economic growth in 2025 and 2026 are downgraded. 

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Red Sea Global expects to open 11 new hotels at its Amaala and Red Sea resorts this year, Carre said.

The company’s Thuwal Private Retreat, on a group of private islands off the coast of Jeddah, began taking bookings at the end of last year.

“The projects are funded and advancing ahead of schedule,” Carre said. Red Sea Global hotels are running at between 50 and 60 percent occupancy “which, for the first year of operations, is very good”.

Saudi Arabia’s Red Sea coast has until now been largely undeveloped, especially when compared to the proliferation of beachside resorts in Egypt and Jordan.

Unlike those markets, Red Sea Global’s resorts are targeted almost exclusively to high-end travellers, with seaplane and yacht hire among the services on offer. 

This wealthier target market may offer Red Sea Global some protection against the threat of a global economic downturn, Carre said.

“They’re still going to go skiing once a year, they’re still going to go to beach destinations once a year, and they’re going to do a cultural city destination once or twice a year,” he said. 

“The more upscale the hotels, the less sensitive people are when it comes to disposable income.”