Rua Al Madinah Holding, a unit of Saudi Arabia’s Public Investment Fund, has awarded contracts worth more than 5.3 billion Saudi riyals ($1.41 billion) for the Rua Al Madinah project, a massive development close to the Prophet’s Mosque comprising hotels and other infrastructure, according to its chief executive.
Ahmed Al Juhani told the Future Hospitality Summit in Abu Dhabi on Tuesday that Rua Al Madinah is “actually an urban development within the city of Madinah … there has been a lot of work that has been done on the ground as part of the project”.
“We have ongoing right now values of contracts and the execution of more than 5.3 billion riyals,” he added.
Last year, Saudi Arabia's Crown Prince Mohammed bin Salman unveiled the project, which is located to the east of the Prophet’s Mosque.
Once completed, the development will boost the area's capacity, allowing it to host up to 30 million Umrah pilgrims, the Saudi Press Agency reported at the time.
The construction project is part of development efforts by the PIF in line with the kingdom's Vision 2030.
As part of the project, which will be built over 1.5 million square metres, 47,000 new hotel rooms will be available by 2030.
“We actually took over the land and made all the detours around the urban development and completed the design of 5,000 rooms,” Mr Al Juhani said.
It has also signed a hotel management agreement with three companies, including Marriott, Accord and Hyatt, to manage hotels.
“We also have 7,000 hotel rooms in the concept stage and another 8,000 rooms will start design in November. So we are talking about 20,000 rooms before year end in different stages, in design or under construction or in the middle of design,” Mr Al Juhani said.
Saudi Arabia's Vision 2030 programme is rapidly transforming the country's economy as it aims to reduce dependence on oil, nurture domestic industries, boost jobs and diversify revenue.
The country is developing a number of new projects, including Neom – a $500 billion futuristic city comprising a nature reserve, coral reefs and heritage sites spread over roughly 50 islands in the Red Sea – as well as a mega entertainment and sports project called Qiddiya in the capital.
“Madinah is a very old city with more than 3,000 years of history with hundreds of thousands of visitors visiting the mosque every day … we have a lot of logistical issues. However, we have a plan to deliver this massive project,” Mr Al Juhani said.
Saudi Arabia’s travel and tourism sector will grow an average 11 per cent annually over the next decade, making it the Middle East's fastest-growing market, according to the World Travel and Tourism Council.
By 2032, the sector’s contribution to Saudi Arabia's gross domestic product could reach nearly 635 billion riyals, representing 17.1 per cent of the kingdom's total economy, the council said in a July 2022 report.