Saudi Arabia banks on religious tourism
Tourism to contribute 5.7pc of non-oil Saudi GDP by 2020
RIYADH, September 30, 2015
Saudi Arabia’s non-oil sector is forecasted to maintain robust growth with tourism expected to contribute as high as 5.4 per cent to the non-oil GDP in 2015, reaching a strategic level of 5.7 per cent by 2020.
The non-oil sector benefits from government spending, corporate lending, and solid domestic consumption as well, with the hospitality sector being the key contributor.
Following the announcement of Human Resources Development Fund (HRDF), Saudi Arabia’s tourism sector is expected to create more than 400,000 jobs in the next five years. Anees Moumina, CEO of SEDCO Holding Group, said: “In its continuous surge, religious tourism stands as a haven to investors and a world of opportunities to young Saudis. The success, efficiency and overall infrastructure of this sector is a tribute to the country’s economy.”
“We have a successful platform to build on. Our multiple infrastructure projects and the growing business and leisure tourism, as well as the increasing inflow of religious tourists, the expansion of Al-Haram and the government supporting growth by way of building transportation and properties infrastructures are all healthy indicators. Furthermore, the development of this sector contributes to new ancillary services such as training, and this constitutes a great investment potential,” he said.
Governmental entities collectively acknowledge the growth potential of this sector. Vocational training programs have been developed with the support of the Ministry of Labour, which is a promising sign to sustain the sector’s growth. We seek to capitalize on these trends, and with the expansion of our operating company, Elaf Group, the employment growth will increase by 75 per cent across our properties,” Moumina said.
Millions of pilgrims visit the Kingdom every year with growth showing no sign of abating as the government continues its massive expansion projects. Visitors to Makkah and Madinah are expected to reach an average of 30 million by 2025, an increase of 42 per cent compared to 17.5 million in 2014.
Ziyad Bin Mahfouz, Elaf Group CEO, said: “Haj season plays a key role to the religious tourism sector. Visits have witnessed an overall surge in recent years and the number of pilgrims, which stood at 2 million in 2013, is expected to increase to 5 million by 2025. Regarding Elaf hotels, our occupancy rate last Haj in Makkah reached 95 per cent and our revenue per available room recorded higher numbers than international hotels.”
While furnished apartments are gaining prominence as an alternative, hotels remain the predominant form of accommodation in both cities. Makkah is the city with the most visitors in the country contributing to 96 per cent of the total tourists to the kingdom. The government approach to development confirms that the kingdom’s tourism industry has become a labour market on its own, focused to deliver a high-quality religious tourism experience, as is the case with Haj services.
Mahfouz added: “Our Group is expanding in line with the rapidly-developing religious tourism sector as we plan to supply 5,000 rooms over the next five years, more than doubling our total capacity. We know that premium hotels dominate the Holy cities - one can even speak of an oversupply of premium hotels - hence there is considerable scope for expansion in the branded economy hotels and apartments segment. With this understanding of the market, we have worked towards the opening of four more properties next year– two properties of three-star hotels, one four-star and one five-star, which is on Tahlia Street in Jeddah.” – TradeArabia News Service