Inside Saudi Arabia's $810bn tourism transformation

New mega tourism projects will occupy an area in excess of 64,634 sq km over the next decade

Massive investment in mega tourism projects to the tune of $810 billion is expected to transform Saudi Arabia as one of the largest leisure tourism industries in the world over the next decade.

According to research conducted by the Middle East and North Africa Leisure Attractions Council (MENALAC), the leisure and entertainment industry council, new mega tourism projects will occupy an area in excess of 64,634 sq km, with the country's Public Investment Fund and Saudi Commission for Tourism and National Heritage (SCTH) leading the transformation.

Already, Saudi Arabia has taken big strides to attract overseas tourists, such as the launch of a tourist visa last year, and by hosting a series of high-profile sporting events such as Formula E, world heavyweight boxing and top European football matches.

So what are the mega projects that will help shape the Gulf kingdom's tourism market over the next 10 years:

1. Neom

The $500 billion Neom leads the list of the mega projects and once completed, will deliver a futuristic mega sustainable city. To be launched on the Red Sea from 2025, it is the largest and most ambitious smart city on the kingdom’s books and in the world. Backed by the Saudi Arabia’s Public Investment Fund and international investors, the futuristic fully-digitised city is slated to contribute $100 billion to Saudi Arabia’s GDP by 2030.

2. Qiddiya

The $10 billion Qiddiya will be spread across 334 sq km in Riyadh. In phase one alone, there are more than 45 projects, where visitors will have access to over 300 recreational and educational facilities including a Formula One-standard racing track, a 20,000-seat cliff-top stadium, an 18,000-seat indoor arena, an aquatic centre and a sports hub, as well as a 2,000-seat performing arts theatre and a cinema. The development will also be home to Six Flags Qiddiya, an extension of the American theme park and with six themed lands.

3. Amaala (Saudi Riviera)

Located in the northern region with an area of 3,800 sq km, the project was launched in September 2018 and is on track to meet its 2028 completion date. It features a total of 2,525 hotel keys and 1,496 residential units and will target ultra-high net worth individuals (UHNWIs).

4. The Red Sea Project

The Red Sea Project will welcome its first guests by the end of 2022. The first phase of the development will include 14 luxury hotels offering 3,000 rooms across five islands and two inland locations. It will also include entertainment facilities, an airport, and the necessary supporting logistics and utilities infrastructure. Upon completion in 2030, the destination will deliver up to 8,000 hotel rooms across 22 islands and six inland sites.

On top of these, the SCTH will also be developing museums in various Saudi regions, at a cost of more than $1.3 billion.

Mishal Al Hokair, board member of MENALAC, said: “Saudi Arabia has an array of dynamic plans and attractions planned over the next few years, each of which will add to the fast growing Leisure and Entertainment sector. Its Vision 2030 will change the entire economic and tourism landscape of not only Saudi Arabia, but the entire Middle East region, that will have a massive positive knock-on effect on the leisure tourism industry.

“Once the current Covid-19 situation improves, the investment and development in the Saudi Arabia’s tourism sector will bring massive opportunities for the industry. It is time for everyone to prepare for the next big growth.”

His comments come as the total number of inbound and outbound tourist trips in Saudi Arabia is expected to reach 62 million trips, where tourism revenues are anticipated to exceed SR142 billion ($37 billion) by the end of 2020.

Tourist facilities licensed by SCTH have achieved a big growth over the past 10 years. In 2008, the number of tourist accommodation did not exceed 800 hotels and hotel apartments. In 2018 the number increased to 7,388.

SCTH plans to facilitate investment of SR171 billion that will boost the tourism industry capacity and the number of hotel rooms to 621,600 and boost the tourism sector’s contribution to the GDP by 3.1 percent, and increase direct employment to 1.2 million jobs.

Prakash Vivekanand, board member of MENALAC, added: “The latest news from Saudi Arabia is very encouraging. The government wants to push ahead with the mega projects that will boost not only the country’s gross domestic product (GDP) but also the tourism sector. It will create massive opportunities for all the players in the leisure attractions business and we could count on an exciting future for the industry in the MENA region.”

According to Saudi Arabia’s General Investment Authority (SAGIA), the country wants to increase investment in recreational facilities to 6 percent from the current 2.9 percent per annum – more than double the current level, as part of Saudi Vision 2030.

Despite the current situation with regards to Covid-19, Saudi Arabia is pushing ahead with construction of some of these massive projects, he said.

Rosa Tahmaseb, secretary general of MENALAC, said: “The leisure attractions industry in the MENA region is upbeat with the new opportunities that are arising in Saudi Arabia. We see massive opportunities for our industry being created by more than a $1 trillion investment in the Saudi economy between now and 2030.

“Despite the short-term setback created by the Covid-19 pandemic, the long-term prospects for our industry remain bright. One example of this can be seen in the dynamic projects planned for Saudi Arabia.”