British billionaire businessman Richard Branson is bullish about Saudi Arabia’s economic prospects after agreeing to take part in the Red Sea Project, a 200-kilometre development that will transform the coastline into a luxury destination.
"We've got a couple announcements tomorrow (Thursday)," Mr Branson told The National on the sidelines of the Future Investment Initiative (FII) conference in Riyadh.
“We’ve got some exciting things…watch this space tomorrow."
Mr Branson, the founder of the Virgin Group, is the first international investor to commit to the kingdom’s Red Sea project, which was announced in August.
“When I was asked to be involved in helping Saudi develop three cities, in particular the Red Sea Project, I was obviously delighted to say yes. I have quite a lot of experience in islands in the Caribbean, so we will lend that experience to it," Mr Branson said.
"It’s an incredibly exciting time for Saudi Arabia. What happens here has a big effect on the rest of the region and the rest of the world. I think the way that the crown prince is moving Saudi Arabia is incredibly positive.”
Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, is spearheading investment into the Red Sea project, which will link more than 50 islands, create 35,000 jobs and add 15 billion Saudi riyals to the kingdom’s economy.
The Red Sea project is part of the kingdom’s Vision 2030 economic development plan that seeks to reduce the country’s reliance on oil and diversify the economy. Tourism is considered to be a vital generator of employment for Saudi Arabia’s young population, with the hope of creating 1.2 million new jobs in the sector by 2030.
Under the 2020 National Transformation Programme, the government envisages total new tourism investments will reach 171.5 billion riyals from a baseline of 145bn riyals.
The 2020 plan also aims to boost the contribution of the tourism sector to GDP to 3.1 per cent from the current 2.9 per cent.
The Red Sea development will stretch across islands between the cities of Umluj and Al Wajh, just a few kilometres from one of the kingdom’s protected reserves and extinct volcanoes in Harrat Al Rahat area.
Foundations will be laid in the third quarter of 2019, with the first phase due to be completed in late 2022.
While the PIF will fund the initial stages of the project, the plan is to later partner with leading international companies.
The project aims to attract tourists to historic and natural landmarks in the kingdom such as the ruins of Mada’in Saleh, dating back to the 1st century. Visitors can explore the area’s flora and fauna.
Saudi Arabia’s tourism sector, encompassing both luxury and domestic tourism, is set to increase in size over the medium and long term, bolstered by the Vision 2030 investments, according to BMI Research, a unit of the Fitch Group.
The research firm forecasts the country’s growth in tourism arrivals to grow 12.8 per cent in 2017 to reach a total of 22.6 million.