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.