What is the concept of tourism investment?
Tourism investment is the process of capital investment of material and human in the tourism sector, with the aim of increasing income or revenues for the country by increasing tourism activity in it by building hotels, resorts, and tourist cities, supporting small tourism projects and developing infrastructure projects, such as transportation, electricity, health, sanitation services, and other projects that serve the local population and tourists alike.
The Kingdom is interested in tourism investment, as it pumps billions of dollars into huge tourism projects all over the Kingdom in many fields, such as the establishment of resorts and hotels, and the construction and development of airports, and others.
Moreover, it is making efforts to make the economic contribution of the tourism sector rise from 3% to 10% by the year 2030 within the Kingdom’s Vision 2030 plan, and this is through developing many tourism projects that aim to increase the number of tourists in the Kingdom to nearly 100 million visitors annually.
In support of these efforts, the Tourism Development Fund was established with aim to empower the tourism sector by developing attractive tourist destinations in the Kingdom and attracting tourism investments to enhance development in this sector, in order to support the Saudi economy.
The importance of tourism investment
The tourism sector is just as important as other sectors, and we cannot ignore the importance of investing in it and what it can achieve for the country, and this is shown through the following:
Achieves economic growth
Investing in tourism contributes to providing more job opportunities, enhancing competitiveness in the tourism sector, and increasing the country’s income and general public revenues to achieve economic growth in the country. The impact of Saudi investment in the tourism sector on economic growth in the Kingdom can be seen through the report of the Ministry of Tourism on tourist spending in Saudi riyals during the years (2015 – 2021), which appears through the following graph:
The tourism sector also contributed to the gross domestic product of the Kingdom by approximately 5.3% in 2022.
Benefits the locals
Tourism investment has a positive impact on the residents of the areas in which it is invested. It is what helps them to benefit from the services and features that are added to the invested area. Which benefits them in the economic, social, cultural, and even environmental fields, and increases their well-being.
Among the most prominent things that citizens obtained in Al-Ula, which is one of the tourist investment destinations in the Kingdom, are the following:
- Providing new job opportunities in restaurants, hotels, craft industries, and others.
- Supporting the agricultural and industrial sectors in the region, by increasing the demand for their products, handicrafts, and traditional industries.
- Protecting the heritage of the region to which they belong.
- Providing a less polluted environment and improve the aesthetic image of the area.
- Benefiting from transport services and various infrastructures.
- Raising the level of their culture through cultural exchange with the different cultures of tourists.
- Reviving their local culture, such as folk arts, industries, arts, crafts, and others.
Provides opportunities for economic diversification and raises the level of skills
The tourism investment process and attracting more tourists creates the need for new products that the local market has not seen before, and thus paves the way for businessmen and company owners to enter new challenges in the local market by trying local products in international markets before exporting them. This is through its experience with tourists visiting the region, which raises the skills of businessmen and opens new horizons for them on both levels, locally and globally.
For example, the National Program for Saudi Crafts and Industries “Bari’a’” formerly affiliated to the Ministry of Tourism, was known as the General Authority for Tourism and National Heritage, opened a store called “Sougha” in the Diplomatic Quarter located in Riyadh in 2019, and it is the first specialized store of this kind, in order to market Saudi handicraft products locally in the short term and globally in the long term, in order to revive the trade and tourism movements, as part of the Kingdom’s Vision 2030 plan.
Protects environmental and cultural assets
Tourism investment contributes to the allocation of financial resources to preserve the two natural and cultural heritages in the country, whether it is protecting and restoring archaeological areas and ancient cities, or even national parks and many others.
Believing in the importance of these assets, the Cultural Development Fund in the Kingdom supports the sector of restoration of archaeology, preservation of heritage and museums, as well as facilitating investment in cultural activities, and enhancing the profitability of the cultural sector. In addition, working to allocate sustainable financing from both public and private sectors as part of its mission.
The most important areas of tourism investment
Tourism investment is not limited to one area only but extends to many areas:
It is important to take care of archaeological areas as part of tourism investment, to attract more tourists interested in archaeology and to develop the cultural heritage in the region, which is what the Kingdom has worked on. As it made the Al-Ula part of the tourism investment plan by establishing the Al-Ula Development Project, because it is rich in historical monuments and unique features that can make it a distinctive and sustainable tourist destination overall.
The outcome of the Saudi efforts continues to protect the national heritage and the Saudi history. In this case, 6 Saudi archaeological sites joined the UNESCO list in 2021, and they are Mada’in Saleh, Al-Turaif District in Al-Diriyah, and Al-Balad in Jeddah, in addition to each of the Rock Art in Hail, Al-Hasa Oasis, and Bir Hima.
The field of entertainment is one of the important areas in which tourism can be invested. It gives tourists the pleasure of entertainment and adventure, and to have new experiences in the country to which they travel.
The Kingdom focuses on this aspect, for example the project to develop Sindala Island within the NEOM project, as it is an important destination for marine tourism. In this case, the crown Prince emphasized it when he said: “This project represents an important moment that reflects the acceleration of development in NEOM and embodies a major step towards achieving our tourism ambitions within the framework of Saudi Vision 2030.”
The Kingdom has also worked on many recreational tourism projects, such as the Qiddiya entertainment city in Riyadh, the King Salman Park project, and many others.
It is possible to invest in the field of religious sites by restoring and caring for these sites and developing services that can attract more tourists to them, regardless of the special interests of tourists, whether it is religious interests for worship, or cultural with the aim of learning about other cultures.
The presence of the holy cities of Makkah and Medina, and other holy places in the Kingdom is a motive for investment in order to serve these places. It is visited by millions of visitors annually, and it is important to establish hotels and restaurants, provide basic services and work to improve them. This returns the country with revenues that can be invested in improving these services.
The field of tourism hospitality means providing facilities in which tourists can stay and carry out some activities, such as dining and so on. These facilities include hotels, resorts, camps, and others.
The latest report published by the General Authority for Statistics in the Kingdom in 2017 for the number of tourism hospitality sector establishments, according to the Saudi Ministry of Tourism, showed that the number of rooms in the Kingdom has reached 544,519 rooms, depending on the type of establishment, and the ministry has established the national platform for tourism monitoring in order to find a market that attracts investments in this field in the Kingdom.
Establishing and developing cultural centers
As part of supporting cultural tourism, tourism investment can be promoted and supported to establish and develop cultural centers, and to enhance tourists’ knowledge of the country’s identity and culture.
Emphasizing the interest of the Kingdom in integrating culture and tourism together, many efforts have been made to restore a number of ancient castles and historical palaces in the Kingdom, and to transform them into cultural, creativity, urban heritage, and handicrafts centers.
Many tourists are interested in visiting countries where different sports can be played, or in going to watch distinctive sporting events. Therefore, tourism investment in this field can provide more tourist attractions for the region.
Among the events organized by Saudi Arabia is the Arab Cup for the U-20 national teams for the year 2022 in the city of Abha, coinciding with the start of the Abha summer. This enhanced internal and external tourism, due to the importance of the event, the city was well chosen, which is characterized by its attractive nature for tourists.
As part of the activities of Hosting International Sporting Events, Saudi Arabia hosted the Italian Super Cup and the Spanish Super Cup three times in a row in Riyadh. Moreover, hosted the Volleyball World Cup (Super Globe) three times, two hosted in Dammam and one in Jeddah. In addition, Saudi Arabia hosted Formula E starting from 2018 in Diriyah in Riyadh, and Formula 1 in the year 2021 in Jeddah.
These events have contributed to attracting thousands of visitors from Gulf countries and countries around the world, enhancing tourism that benefits from the momentum of these global events that contribute to tourism in the Kingdom.
It has been decided that the Kingdom of Saudi Arabia will host the 2034 World Cup finals. The Saudi Arabia Football Federation has submitted a bid to host the tournament in accordance with a comprehensive plan through which the Saudi Arabia Federation seeks to harness all capabilities and energies to provide a wonderful and unprecedented experience in the world of football. Sports are an essential tributary to the growth and prosperity of the economy. Therefore, Saudi Arabia is keen on optimal and effective investment in the sports sector of all kinds through continuous work to achieve the goals of Vision 2030, which is reflected in the quality of life of the Kingdom’s citizens and residents.
Investing in medical tourism, which aims to cure some diseases or achieve convalescence and relaxation, enhances the tourist attraction of the region in which it was invested, and raises its revenues.
In this regard, the Kingdom seeks to develop the therapeutic tourist experience. It ranked 14th in the GCC countries in the field of medical tourism, according to the Medical Tourism Association index for the year 2022.
How can tourism investment be supported?
Tourism investment can be supported by providing attractive facilities to investors and providing guidance to them, to invest in areas and regions that serve tourism in the country.
The Tourism Investment Portal of the Saudi Tourism Development Fund presents the Awn program, which supports the launch of new facilities that create unique experiences for tourists throughout the Kingdom, and targets tour and event organizers, and providers of cultural tourism products. In this regard, it targets cafes, restaurants, hotel projects, and more.