Propsects for tourism growth in Saudi Arabia bright
RIYADH, February 7, 2017
The cultural, leisure and tourism landscape in Saudi Arabia is changing quite rapidly and the scale of opportunity, particularly from domestic tourism growth, is significant, a new report has revealed.
At a total contribution of SR190 billion ($50.6 billion) in 2015, travel and tourism is currently the second highest contributor to Gross Domestic Product (GDP) growth in Saudi Arabia, albeit from a relatively low base compared to other countries in the GCC, said the report released by Colliers International, a leading real estate services firm.
With a compunded annual growth rate (CAGR) of 7.4 per cent, domestic tourism is forecast to grow to an impressive 66 million trips per annum by 2020 - up from 46.5 million - driven by growth in both religious and leisure tourism, said the report.
Moreover, with a CAGR of 4.8 per cent, inbound tourism is forecast to grow to over 32 million trips per annum by 2026, driven primarily by growth in religious tourism
In 2015, travel and tourism is estimated to have attracted a capital investment of SR81.1 billion ($21.6 billion). This is forecast to rise by 4.2 per cent in 2016, and by a further 4.4 per cent per annum over the next 10 years to SR130.5 billion ($34.7 billion) in 2026.
It is projected that travel and tourism’s share of total national investment will rise from 12.5 per cent in 2016 to 14.3 per cent in 2026, the report said.
Expectations in terms of the variety and quality of entertainment provision within the country are rising and the new Entertainment Authority has high aspirations to meet these expectations.
Initiatives supporting the growth of tourism include:
• Investment in major transport infrastructure such as the new Jeddah airport (open 2018) and the Haramain High Speed Rail line (2018) linking the holy cities of Medina and Mecca via King Abdullah Economic City, Rabigh, Jeddah, and the new Jeddah airport.
• Significant private sector investment in hotels and resorts
• Government investment of over USD 13 million/year on the preservation of heritage sites
• Introduction of the ‘Umrah Plus’ Visa which allows Pilgrims to travel around the KSA for up to 30 days
• Potential introduction of a single Schengen-style visa for all GCC countries
• Gradual opening to new forms of leisure, entertainment and cultural activities e.g. the successful ILuminate Show in Riyadh in summer 2016
In addition to the projected growth in domestic leisure tourism, there are a number of additional factors supporting the development of culture, leisure and entertainment offers in the country:
• A large and fast growing population: The population is forecast to grow from 31.5 million in 2015 to 37.6 million in 2025.
• A young population: 57 per cent of Saudi nationals are under the age of 25 with increasing aspirations for quality leisure and entertainment experiences
• Increasing spend on leisure: 2030 Vision is targeting an increase of household spend on culture and entertainment from the current level of 2.9 per cent to 6 per cent.
• A significant lack of out-of-home culture, leisure and entertainment: The existing offer is on the whole limited to public parks, malls, festivals and traditional museums. This is now changing with the recent opening of commercial attractions such as KidZania in Jeddah and Snow City in Riyadh, together with the world class King Abdulaziz Centre for World Culture in Dhahran.
• A competitive and open business environment: The government is primed to engage and partner with international leisure and tourism investors, developers and operators e.g. Six Flags partnership for up to three theme parks.
• Education and training: ‘Experience Saudi Arabia’ is a programme that aims at educating Saudi Arabian youth about the heritage and culture of the country. New courses and training to support employment in leisure and hospitality are also being introduced.
The large-scale leisure, culture and entertainment projects now emerging in Saudi Arabia are expected to encourage Saudis to spend more of their disposable income within the country rather than overseas.
With other GCC countries also investing heavily in new tourism attractions and infrastructure, the region is becoming increasingly competitive. Nonetheless the prospects for growth in Saudi Arabia are bright, the report added. - TradeArabia News Service