Reforms and investments are set to drive the hotel, travel and tourism sectors in Saudi Arabia over the next five years, according to a report by Arabian Travel Market.
The report, issued ahead of Arabian Travel Market 2018, says that recent reforms in Saudi Arabia will drive growth in the hospitality market of 13.5% compound annual growth rate (CAGR), higher than the established markets of the UAE (10.1%) and Oman (11.8%).
Commenting on the findings, Simon Press, Senior Exhibition Director, Arabian Travel Market (ATM), said: “Following recent reforms and the relaxation of visa regulations, Saudi Arabia is poised to capitalize on these factors as it nurtures a vibrant leisure and entertainment sector, supported by a new generation of hotels.”
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Saudi Arabia is expected to see a vast expansion of its hotel and resort inventory, along with a steep increase in airport passengers, as Crown Prince Mohamed bin Salman continues to drive economic and social reforms, including direct investment in tourism.
The study produced by ATM’s research partner Colliers, found that religious tourism in the kingdom is still driving demand, with 30,000 rooms opened during 2017, with a further 40,020 guestrooms in 89 projects currently under construction – compared to 35,050 rooms in the UAE.
The report forecast that five-year air passenger numbers will increase 8% at King Khalid International Airport Riyadh and 6% at King Abdulaziz International Airport, Jeddah. This is compared to 8% at both Muscat and Dubai International and 7% at Abu Dhabi International.
“These higher visitor arrivals will support jobs, investment opportunities and economic diversification, in line with the Kingdom’s plans for its future. In terms of regional tourism, these are game changing developments, completely unprecedented, and something few expected,” Press added.
Last year, Saudi Arabia set the stage for this to expand to leisure tourism, as it pursues targets of 30 million visitors annually by 2030. As a result, 2018 will see the first tourism visas granted to international travellers and, for the first time, women aged 25 and older will now be able to obtain a single entry, 30-day tourist visa without a male chaperone.
The kingdom has announced a series of leisure projects in recent months, including the creation of a Six Flags theme park in Riyadh by 2021 and a Red Sea resort built on 100 miles of sandy coastline and backed by investment from Virgin Group founder Sir Richard Branson. Featuring hotels, residences and a transport hub, the project will create 35,000 jobs, adding SR15 billion to the economy.
Aligned with the vision, the Public Investment Fund (PIF) ploughed SR10 billion into entertainment ventures in 2017 and, under the National Transformation Programme (NTP) the kingdom has invested SR171.5 billion in tourism development.
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In 2017, 1,671 visitors from Saudi Arabia attended the ATM event in Dubai, a 14% year-on-year increase compared with the 1,471 who visited in 2016.
Saudi Arabian exhibitors at ATM 2018 will include the Saudi Commission for Tourism and National Heritage, Saudia, Makarem Hotels, Saja Al Madinah, Mansard Hotel, Aljomaih Auto Rentals, ITRIP, Zeeyarah.com, Choice Hotels International and Al Tayyar Travel Group.
Celebrating its 25th year, ATM 2018 will build on the success of this year’s edition, with a host of seminar sessions looking back over the last 25 years and how the hospitality industry in the MENA region is expected to shape up over the next 25. The event will take place at the Dubai World Trade Centre (DWTC) from April 22-25.
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