Tourism, after oil. Saudi Arabia announces a huge investment to give a further boost to the sector: the equivalent of 700 billion euros.
The plan was presented by Saudi Tourism Minister Ahmed Al-Khateeb. There are some hinges worn. The Tourism Investment Enabler Program (TIEP) aims to make doing business in Saudi tourism easier and more profitable. The flagship project is the Hospitality Investment Enablers, which aims to facilitate and increase the accommodation capacity of specific tourist destinations, diversifying the Kingdom’s offer: a move to position Saudi Arabia as a leading tourist destination worldwide. Furthermore, this global initiative aims to catalyze private investment in key Saudi tourism sites of up to SAR 42 billion (over €10 billion) and generate an estimated annual GDP increase of SAR 16 billion (€4 billion) by 2030.
Among the key drivers of Hospitality Investment Enablers – it was explained by the government – are the simplification of access to government-owned land on favorable terms, the streamlining of project development processes and the reduction of barriers to entry into the market. There are also numerous regulatory adjustments that are part of the effort to reduce operating costs and encourage growth in the sector. The ministry expects the initiative to have a significant impact on the socio-economic landscape, creating 42,000 new hotel rooms and approximately 120,000 job opportunities.
The broader TIEP includes reforms in the regulation of tourism licenses for the many forms of operations now available, so as to streamline the investment process, reducing annual government taxes by almost 22% and with the aim of reducing them further in the short term term. And again, the launch of the Tourism Investment One Stop Shop, in collaboration with the Saudi Business Center: a one-stop shop that will act as a reference for all the services of the tourism ecosystem, supporting investors along the entire investment path, in addition to integration of online services and digital experiences”.
The objectives
“In 2023, we have seen a 390% increase in demand for tourism business licenses and this is just the beginning. Thanks to continuous investment in our country’s potential, in the next 10 years Saudi Arabia will be the world‘s leading investor in this sector,” says Minister Ahmed Al-Khateeb.
Vision 2030, the strategic program promoted by the Kingdom of Arabia to reduce its dependence on oil and diversify the country’s economy, developing public service sectors such as healthcare, education, tourism and entertainment, a plan announced in 2016 by Crown Prince Mohammed bin Salman planned to welcome 100 million tourists by that date, but the objective – the government says – “has already been achieved seven years ahead of schedule”. So much so that the bar has already been raised to 150 million tourists.
The opening to the sea
Also notable within Vision 2023 is the Red Sea megaproject, which focuses on luxury and ecotourism to attract visitors to the Saudi coast of Tabuk province, particularly between the cities of Umluj and Al-Wajh. Ninety pristine offshore islands between the two cities will also be part of the project, carried out by the Red Sea Development Company in the North of the Red Sea, as well as hotels, marinas, a leisure center and an international airport. A great boost will also be given to boating.