Can Saudi Arabia’s Billion-Dollar Bet on Tourism Succeed?
Earlier this month, Saudi Arabia signed a multimillion-dollar deal with Habitas, the American company that got its start setting up luxury camping at the annual Burning Man festival in the US desert. That may seem like an odd match at first.
Burning Man is well known for its lack of rules, drinking, dancing, experimental drug-taking and the wild, flesh-baring costumes exuberantly sported by both male and female attendees. Habitas describes itself as an eco-conscious, culturally savvy provider of luxury “homes” and wellness experiences.
Meanwhile, Saudi Arabia is best known for being ruled by a royal family that tolerates no political opposition, as a global leader in dispensing the death penalty and for its extremely conservative and religious culture that prefers both sexes to dress modestly at all times, as well its ban on all alcohol.
But there’s good reason for this $400 million (€365 million) business deal: Saudi Arabia is pouring billions into its tourism sector. As part of Vision 2030, the country’s long-term plan to diversify its economy away from oil, it wants to see tourism go from contributing 3% to national income to 10%, and add a million more jobs to the sector.
It was only in 2019 that the oil-rich kingdom started to allow visitors from 49 countries easier entry, with the purchase of an electronic visa. This currently costs just over $142 (€130).
“It’s extremely exciting to observe what’s happening there because, up until recently, Saudi Arabia had been something of a blank spot on the tourist map,” Markus Pillmayer, a professor of tourism at Munich’s University of Applied Sciences, told DW. “But I think it is also still too early to assess clearly whether it’s going to be a success or not.”
The numbers suggest that while Saudi Arabia’s tourism ambitions are grand, they are not impossible. For example, in the neighbouring United Arab Emirates, the total contribution of tourism to national income is around 12%. And the Saudis are spending big on their plans, with a fund of up to a trillion dollars’ worth of investment.
They have done deals with some of the biggest names in the business, including Hilton, Hyatt and Accor, among others. A new airline, Riyadh Air, will start flying in 2025.
At the same time that hotels are being built and planes purchased, the country has also prepared its often-neglected six UNESCO World Heritage sites for more visitors. Other huge developments are also planned. These include the Mukaab, a gigantic entertainment and shopping centre on the outskirts of Riyadh, as well as new resorts along some 120 kilometres (75 miles) of the country’s underdeveloped Red Sea coast, complete with a harbour for super yachts.
After a years-long publicity barrage, it’s difficult to find an impartial analysis of Saudi Arabia’s tourism plans. All the nonstop promotion appears to be paying off. Last year, the London-based World Travel and Tourism Council reported that Saudi Arabia had the fastest-growing tourism sector in the Middle East and that by 2025, the country would get around 40% more international visitors than nearby tourism-savvy Dubai.
At the same time though, there are more than a few obstacles. “There’s been a huge amount of investment and there likely is a chance of success,” said Justin Francis, co-founder and chief executive officer of UK-based activist tour operator, Responsible Travel. “I’m not entirely convinced yet. There will certainly be strong resistance.”
