Saudi Arabia approves new tourism law to boost investments in the sector

Saudi Arabia has approved a new law to boost the development of the tourism sector in the Arab world’s largest economy, attract more investment in the sector and increase visitor numbers. This is part of efforts by the Saudi government to diversify the country's economy away from oil. The new tourism law, approved by a resolution passed by the Council of Ministers this week, will establish a new regulatory environment to “attract tourism innovators and improve ease of doing business” in the kingdom, the Saudi Press Agency reported on Wednesday. It will also streamline the licensing processes and procedures by creating a one-stop-shop platform for all tourism stakeholders as well as allow “new or experimental tourism businesses to receive special licences” to operate in the country. The new tourism law will “drive business and investment, support innovation and attract tourists, in line with international best practices”, Saudi Arabia’s Tourism Minister Ahmed Al Khateeb, said. “This law follows the kingdom’s recent announcement of the Regional Tourism Development Councils Regulation, a major milestone in advancing Saudi Arabia’s National Tourism Strategy,” Mr Al Khateeb said. “The regulation will accelerate the development of tourist destinations in the various regions, including Neom, Al Soudah, the Red Sea and Diriyah Gate.” Saudi Arabia is developing a number of tourism projects as it seeks to raise the economic contribution of the tourism sector from 3 per cent of gross domestic product to 10 per cent by 2030. These include Neom, a $500 billion futuristic city comprising a nature reserve, coral reefs and heritage sites on a number of islands along the Red Sea, and Diriyah Gate, a seven-square-kilometre site with the At-Turaif Unesco World Heritage Site at its core. The Red Sea Development Company — which is owned by the kingdom’s Public Investment Fund — is also building a mega-tourism project along the Red Sea coast, with 16 hotels across five islands and two inland sites as part of the first phase. The Council of Ministers also approved a resolution that “empowers the ministry of tourism to enable sector growth”, SPA reported. It allows the ministry to give tax and custom exceptions or reductions with related government entities, creating incentives for businesses to invest in the tourism sector. “This new framework for collaboration with the private sector and relevant government entities will improve the quality of services in the tourism sector and promote Saudi Arabia as a top five global destination,” the report said. “It will accelerate achieving the goals set by the kingdom’s National Tourism Strategy and Vision 2030, including 100 million new visits, tourism’s 10 per cent GDP contribution and 1 million new tourism jobs.” Saudi Arabia's economy recovered in 2021 from the coronavirus-induced slowdown, with economic activity picking up momentum this year as oil prices rose. Output grew 11.8 per cent in the second quarter of this year, on the back of higher oil prices and rising oil-related activities, according to flash estimates released by the General Authority for Statistics. Saudi Arabia's travel and tourism sector will grow an average of 11 per cent annually over the next decade, making it the Middle East's fastest-growing market, the World Travel and Tourism Council said in a recent report. By 2032, the sector’s contribution to Saudi Arabia's GDP could reach nearly 635bn Saudi riyals ($169bn), representing 17.1 per cent of the kingdom's total economy, it said. _____________________

Saudi Arabia approves new tourism law to boost investments in the sector

The legislation is intended to help attract more visitors and make it easier doing business in the industry

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