Analysis Tourism Golden age of Saudi tourism ‘needs new airlines to soar’ By Andy Sambidge May 25, 2022, 12:30 AM Creative Commons: Richard Mortel The World Heritage site at AlUla is a key part of Riyadh's plan to attract international tourists Hospitality experts say 310,000 hotel rooms will be added by 2030More carriers needed ‘rapidly’ to cater to the predicted influx of touristsThe kingdom’s heritage sites are attracting international visitors Saudi Arabia will need to launch new airlines in the next few years to support the expected “golden age” of tourism in the kingdom, industry experts have said. The hospitality market is set to be transformed under Saudi Arabia’s Vision 2030, with 310,000 new hotel rooms due for completion by the end of the decade according to research by global property consultancy Knight Frank. Knight Frank also found that Accor Group would be Saudi Arabia’s largest hotel room operator by 2030, doubling the number of rooms it manages to almost 28,000. Hilton hotels will leapfrog from fifth place to emerge as the country’s second biggest brand, with almost 19,000 rooms under management by 2030. Kingdom’s largest hotel pipeline Turab Saleem, partner and head of hospitality, tourism and leisure at Knight Frank, said: “Delivering the vast number of rooms the kingdom has planned is going to bring with it a number of opportunities. However, given this is the biggest hotel supply pipeline ever seen in the region, it will usher in a golden age of hospitality for Saudi Arabia. “We expect to see the rapid development of a number of parallel industries that will be forced to evolve to cater to the impending influx of visitors. Cruise Saudi CEO reveals big ambitions for kingdom’s tourism “Clearly, there will need to be a significant change in the kingdom’s physical infrastructure but, in parallel, new national carriers will be needed to be rapidly established.” He added: “Most importantly, regulations will need to be developed to manage all aspects of an international and vibrant tourism scene, ranging from hospitality labour to facilitating hospitality investments through streamlined processes.” Luxury boom Rabia Yasmeen, senior research consultant at Euromonitor International, said Saudi Arabia had become an attractive investment destination for international players in the travel and hospitality sector over the past year, particularly hotel groups. She told AGBI: “The interest from global hotel chains has been quite evident, particularly in the luxury and upscale segment. This is also expected to raise the industry service standards within the country and enhance overall traveller experience.” She added: “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 tourists globally. These tourists are particularly intrigued to experience the culture and understand the heritage of the country.” The kingdom “is also designing its tourism offerings across multiple elements and boosting investment across various pillars to complement the country’s vision”, Yasmeen said. AccorAccor is building a Rixos Obhur hotel in the Saudi city of Jeddah From vision to reality Faisal Durrani, partner and head of Middle East research at Knight Frank, said: “We stand at the precipice of a sea-change for Saudi Arabia’s hospitality landscape – we are moving from vision to reality. “The $110 billion herculean task of transforming Saudi Arabia’s hospitality landscape goes well beyond the delivery of extra hotel room keys. Care and attention must be taken to deliver the correct quantum of product in the right locations. “The competition is starting to heat up as hotel operators jostle for a piece of the remarkable hospitality and tourism vision now unfolding in the kingdom. The real crown jewel for hotel operators will be securing a presence in the giga-projects, with NEOM and Roua Al Madinah forecast to add around 80,000 keys each.” Saudi Arabia: a kingdom in transformation These giga-projects represent nearly 73 percent of the hotel supply pipeline. Nationwide, a 63.2 percent surge in the number of four and five-star rooms is expected by the end of the decade. Yasmeen said: “For Saudi Arabia’s Public Investment Fund, tourism is not only a sector to unlock economic growth but also a springboard to connect with the global audience. There have been multiple deals signed by the Saudi Tourism Development Fund over the past year which aim to ensure an inclusive strategy to boost tourism via both public and private sector investments and developments. With the number of new tourism offerings, ranging from cultural experiences at AlUla to sports and entertainment, the country aims to unlock a new stream of international tourists, thereby increasing the need for additional capacity to host these tourists.” Creative Commons: Francisco AnzolaBalconies in Jeddah’s Old Town, a UNESCO World Heritage site. Picture: Creative Commons/Francisco Anzola Knight Frank estimates that $3.4 billion is needed to deliver the 11,300 rooms planned for Jeddah, the highest level nationally. Riyadh comes a close second, with 11,200 new hotel keys forecast to cost $3.2 billion. This will take the capital’s hotel room supply to around 30,000. “As the country aims to achieve a GDP contribution of 10 percent from the tourism sector by 2030, this has not only launched a new set of investment opportunities for the private sector, but also opens a new era for the Saudi economy and society,” Yasmeen added. How Saudi tourism compares to the rest of the world Saudi Arabia ranked 33rd out of 117 countries ranked in the World Economic Forum’s annual Travel & Tourism Development Index, published on May 24. Countries are ranked on factors related to the development, sustainability and resiliency of their travel and tourism industry, which in turn contributes to economic and social development. The list was topped by Japan, followed by the United States, Spain, France and Germany. Saudi Arabia was the second-placed Gulf country, behind the UAE in 25th spot. Qatar was ranked 43rd, Bahrain 57th and Kuwait 86th. Oman was not included in the list. In the wider MENA region, Israel came 47th, Egypt 51st, Jordan 64th and Lebanon 94th. The forum’s report said that although overall international tourism and business travel was still below pre-pandemic levels, the sector’s recovery has been bolstered by greater vaccination rates, return to more open travel and growing demand for domestic and nature-based tourism. According to the World Tourism Organisation, the difference in international tourist arrivals between January 2021 and January 2022 is greater than arrivals growth in all of 2021.