27 April 2016 Saudi Arabia is aiming to develop its tourism sector by opening up to international visitors and more than doubling the number of hotel rooms in the kingdom to half a billion, part of its newly announced plan to diversify the country's economy away from hydrocarbons.
Prince Sultan Bin Salman Bin Abdul Aziz, chairman of the Saudi Commission for Tourism and National Heritage, told Zawya on Tuesday at the Arab Travel Market (ATM) conference in Dubai that the tourism sector was the second biggest contributor to the kingdom's economy, but it had seen slow growth in recent years.
Deputy Crown Prince Mohammed bin Salman this week unveiled the government's ambitious "Vision 2030" plan to end the kingdom's dependence on oil. The plan aims to raise non-oil revenue to 600 billion Saudi riyals ($160 billion) by 2020, from 163.5 billion Saudi riyals last year, with tourism set to be a major focus for growth.
Despite many attractions for leisure and religious tourists, the kingdom's decision-making process "is behind the slow growth in tourism," Prince Sultan told Zawya. "But with the new vision, there will be evolvement and the number of hotel rooms will increase to reach about 500 thousand rooms soon, as well as accommodation facilities," he added.
The number of hotel rooms in the kingdom reached about 230,000 in September 2014, employing around 900,000 employees, according to official numbers of the Commission for Tourism and National Heritage. While a target of half a billion rooms has been set, Prince Sultan did not give any specific details on the timeline or strategy to achieve this goal.
The kingdom is already the biggest hotel sector in the region, accounting for around two thirds of all hotel rooms in the Gulf region, according to a report by Alpen Capital report in 2014.
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The kingdom's hotels last year recorded healthy results, with positive average room rates and room yields in most cities, according to the latest EY Middle East hotel benchmark survey released in December.
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Visa system to restart
Prince Sultan also announced plans to open up the tourism visa system, which was suspended in 2014 to allow authorities to improve the infrastructure for local citizens before it was opened up to international visitors.
"We also asked the Commission to reopen tourist visas to special groups, as we receive the highest number of tourists from GCC [Gulf Cooperative Council] in the kingdom, more than what they receive from Saudi Arabia," he said.
The leisure tourism sector, which remains untapped in the kingdom, is one area it is looking to develop, according to a 2015 report on the Saudi hospitality sector by Aljazira Capital.
"Areas that are gaining traction in the kingdom are entertainment centres located in the malls or indoors. Given KSA's young population, theme park hotels also have great potential," the report said.
The kingdom currently has 245 entertainment centres, including outdoor parks, water parks and zoos. The young Saudi population is an untapped market, with 69 percent of its citizens aged under the age of 35 years old.
This was demonstrated by a report released last month by Network International on the average spend by credit and debit card holders in the UAE in 2015.
It found Saudi-issued cards recorded a 48 percent increase in spending in the UAE in 2015, ranking it third on the list of top spenders, behind local UAE residents and those from the United States.
