Saudi Expects To Become A Top Five Global Tourism Destination By 2030

Saudi Arabia has been saying since 2016 that it is moving away from its dependence on oil production. Led by the crown prince, Mohammed bin Salman, the government has been working to diversify and improve Saudi Arabia’s non-oil economy.

Last month, news was announced about the kingdom’s attempts on becoming a tourist destination. The overall Saudi economic diversification is led by a program called Vision 2030, which aims to create new industry and new jobs in the kingdom. In the spring of 2016, Prince Mohammed said, “I think by 2020, if oil stops we can survive.” With four months to go until 2020, the national oil company, Aramco, is still the main contributor to the Saudi economy and the government’s budget.

Aramco accounted for 63% of the government’s revenue two years ago, but according to KPMG, the oil industry was projected to contribute 68% of the revenue in 2019. The government has instituted new non-oil taxes, like a value added tax, but non-oil GDP has not improved.

Now the government is touting its plans for a new tourism industry with an announcement alongside the CEO of Six Flags and an exclusive for CNBC. The kingdom released a grand vision. Six Flags will be the centerpiece—for now—of a planned entertainment center outside of Riyadh to be called Qiddiya.

Six Flags is the first large tenant announced for Qiddiya, though the idea behind Qiddiya, including elaborate renderings, has been public for months. At other megaprojects, the kingdom intends to attract resorts and hotels, though this has not yet materialized. According to CNBC, Saudi Arabia expects to become a top five global tourism destination. It is looking for tourism to contribute 10% of GDP (likely well in excess of $100 billion) by 2030. And yet the kingdom currently does not offer a tourist visa at all. Almost all of the tourism is for Muslim religious pilgrimages.

READ  Yemen's Houthis storm schools to recruit children as fighters, say residents

The government told CNBC that it will begin issuing tourism visas next month, but they were originally scheduled for April 2018 with several delays since.

It might be useful to compare some of these goals, for example, to the US state of Florida’s tourism industry. Florida has a population about the same size as Saudi Arabia in less than a tenth of the geographic area. It has much better weather. Much of Saudi Arabia is prohibitively hot in the summer months, with average high temperatures of about 110 degrees Fahrenheit. Florida is part of the U.S. and thus an easy destination for over 300 million Americans. Florida also allows alcohol, has gambling casinos, allows men and women to dress and interact freely, and allows churches, synagogues and general freedom of religion. Florida also protects free expression, civil rights and due process, and has Miami, Key West, Disney World, Universal Studios, world famous golf courses, college bowl games, professional sports and a booming cruise industry. And yet, in 2017, total tourism spending in Florida was only $88.6 billion.

READ  Saudi Arabia is building a more transparent system

So the big question is, how is Saudi Arabia going to create more than $100 billion of tourism spending by 2030, when it is starting basically at nothing? All Six Flags parks combined only saw $1.5 billion in revenue in 2018, according to its annual report.

CNBC reports that Saudi Arabia is also counting on “eco-tourism,” because, as Amr AlMadani, the CEO of Al-Ula, a UNESCO site, said, “trends show that people travel now for intimate interaction with nature, low-key and lowdensity.” But low-key and low-density tourist sites don’t bring in the big money. Petra, the more famous ancient attraction to which Saudi Arabia’s best heritage sites are compared, only attracted a disappointing 400,000 visitors in 2014.

Saudi Arabia is planning resorts on the Red Sea coast, but much is left unexplained such as what companies may build there, will alcohol will be served, will women be allowed to wear what they choose, will unmarried men and women be able to socialize freely, will nightclubs serve men and women together, and will religious freedom will be permitted.

2020 is almost here, and oil is as important to Saudi Arabia’s fiscal solvency as ever. If this tourism plan is indicative of overall progress for Vision 2030, then there is much still to be achieved.

Leave a Reply

avatar
  Subscribe  
Notify of