Saudi Arabia’s tourism fund signs deals to develop project in Jeddah resort

Saudi Arabia’s Tourism Development Fund (TDF) has signed two financing agreements with Dallah Al Baraka Group and Dallah Real Estate Company for building a tourism project at the Durrat Al Arous resort in Jeddah.

The funding from the TDF will be used to develop the Durrat Lagoon destination, which will be operated by IHG’s boutique brand Hotel Indigo. The second agreement, signed with 17Sixty, will enable the companies to provide recreational activities and adventures for Durrat Al Arous resort visitors, the TDF said in a statement on Wednesday.

“[The] TDF is focused on providing innovative solutions that link investors to the abundant opportunities in the Saudi tourism sector, contributing to achieving the objectives of the National Tourism Strategy and consolidating the kingdom’s position as a tourist destination that attracts visitors from all over the world,” Qusai Al Fakhri, chief executive of TDF, said.

Saudi Arabia, the world's biggest oil exporter, is rapidly transforming its economy as it aims to reduce its dependence on oil, nurture domestic industries, boost jobs and diversify revenue. Developing the tourism sector is a key plank of its Vision 2030 transformation plan.

The kingdom started issuing tourist visas in 2019 in a quest to expand the contribution of tourism to its economy. Tourism is expected to account for more than 10 per cent of Saudi Arabia's gross domestic product by 2030 – up from 3 per cent currently – and provide one million jobs.

Saudi Arabia is also developing a number of projects, including Neom – a $500 billion futuristic city comprising a nature reserve, coral reefs and heritage sites on islands along the Red Sea – and a mega entertainment and sports project, named Qiddiya, in the capital.

The Red Sea Development Company is also building a mega-tourism project on the kingdom's west coast.

The TDF, which was set up last year with an initial investment of $4bn to develop the tourism sector in Saudi Arabia, aims to drive the country’s tourism ambitions through such deals.

“Achieving sustainability in the Saudi tourism sector requires directing investments and support towards diversified projects that provide a comprehensive tourism experience – and these agreements with Dallah Real Estate Company and 17sixty reflect this,” Mr Al Fakhri said.

Saudi Arabia is also planning to develop 10 main destinations in a bid to diversify its tourism offerings.

Earlier this month, the TDF signed a financing agreement with travel company Seera Group to develop and operate a major tourism destination in the Al Baha region of the kingdom.

Going grey? A stylist's advice

If you’re going to go grey, a great style, well-cared for hair (in a sleek, classy style, like a bob), and a young spirit and attitude go a long way, says Maria Dowling, founder of the Maria Dowling Salon in Dubai.
It’s easier to go grey from a lighter colour, so you may want to do that first. And this is the time to try a shorter style, she advises. Then a stylist can introduce highlights, start lightening up the roots, and let it fade out. Once it’s entirely grey, a purple shampoo will prevent yellowing.
“Get professional help – there’s no other way to go around it,” she says. “And don’t just let it grow out because that looks really bad. Put effort into it: properly condition, straighten, get regular trims, make sure it’s glossy.”

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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