Saudi Arabia's Public Investment Fund (PIF), the kingdom's sovereign wealth fund, made a splash in its hunt for high-profile foreign investments. Highlights in the past months have been the fund's multibillion-dollar partnerships with the US private equity firm Blackstone and Japan's SoftBank, targeting America's infrastructure and tech assets respectively.
The fund's latest funding venture – a 10 billion Saudi riyals (Dh9.79bn) entertainment investment company – is a timely reminder of the venture's founding purpose, namely to assist in the transformation of the kingdom's economy in line with its Vision 2030 plan, and tourism's key role in growing the country's economy and employment base.
PIF's new investment company, unveiled yesterday, will invest in several projects within the kingdom, including an entertainment complex to be launched in 2019. It will also seek partnerships and help to expand the scope and variety of entertainment offerings.
Under the 2020 National Transformation Programme, which was revealed last year, tourism investment is set to increase to 171.5bn riyals from 145bn riyals and tourism spending is forecast to rise to 174.8bn riyals from 104.8bn riyals.
The contribution of tourism to the kingdom's GDP is also projected to reach 3.1 per cent by 2020 from 2.9 per cent.
The development of the Saudi tourism sector is central to the country's economic transformation for three main reasons.
Firstly, the development of domestic leisure facilities will encourage Saudi citizens to spend more of their leisure time in their home kingdom rather than abroad, pumping money that was previously spent abroad back into the domestic economy.
Secondly, such leisure facilities, alongside the upgrading of the kingdom's capacity to host religious tourists, will encourage the growth of visitors from overseas, with the goal of attracting more than 15 million visitors
Thirdly, tourism is considered a vital generator of employment for Saudi Arabia's youthful population, with the hope of 1.2 million new jobs in the sector by 2030.
Beyond the country's obvious pull for religious visitors, the tourism industry remains in its infancy.
But the PIF's new investment company, alongside initiatives such as the upcoming Red Sea Project and the new 334-square kilometre entertainment city south of the capital Riyadh planned for 2022, prove the country's commitment to the growth of such a vital sector.