Flu pandemic threatens Saudi tourism

The kingdom is trying to build a fledgling industry and be more attractive to jetsetting nationals.

Muslims wearing masks walk outside the Grand Mosque after night prayer in Mecca.

The prayer-bead sellers of Mecca and Medina are worried. While Haj is still a month away, most businesses that make a living from the annual Muslim pilgrimage to Saudi Arabia expect a poor season.

Concern over the swine flu pandemic has already cost the two holy cities US$240 million (Dh881.5m) in lost revenues this year, according to the Tourist Company for Haj and Umrah in Medina. The flu scare appears to have warned off high-rolling visitors from neighbouring Gulf states, in particular. "We haven't seen so many people from Kuwait or the UAE," said the sales manager for one of the four-star hotels in Mecca who asked not to be named. "Saudis also. Business is not so good."

Hotel occupancy levels stood at about 55 per cent at the end of Ramadan, when many Muslims choose to perform the lesser pilgrimage of Umrah. That is about one-third lower than last year's figures, the Mecca Chamber of Commerce said. Ironically, only 26 cases of swine flu were recorded in Mecca and Medina during the entire holy month, the Saudi Press Agency reported. There were no known fatalities.

Coming hard on the heels of the global economic downturn, the H1N1 flu outbreak has come at a bad time for Saudi authorities, who are working hard to build up their fledgling tourism industry. With its harsh climate and deeply conservative society, Saudi Arabia is not an obvious holiday destination, yet millions of Muslim pilgrims visit the kingdom every year and authorities would like to capitalise on that traffic.

Religious tourism, as it is known, is already an important contributor to the economy. The kingdom welcomed some 47 million tourists last year, according to the Saudi Commission for Tourism & Antiquities (SCTA), generating an estimated 40 billion riyals (Dh39.17bn) in tourism receipts. Excluding oil income, that is equivalent to about 6.9 per cent of the country's GDP. Tourism is also strategically important, employing some 1.1 million people directly or indirectly. Faced with a fast-growing population of about 18 million, most of them still below working age, the government has made job creation a priority.

Under the "2020 Tourism Investment Vision" drawn up by the SCTA, the government hopes to nearly double tourist numbers to 88 million in the next decade. By marketing local historical attractions and encouraging the development of resort hotels on the Red Sea coast, the SCTA hopes to encourage pilgrims to extend their visits to Saudi Arabia. An overhaul of industry standards is also under way. Hotels in Medina have been required to display room rates and occupancy levels prominently since April to counter complaints. They are also being gradually reclassified to ensure price transparency.

While foreign pilgrims are an important source of income, it is Saudi tourists that the government hopes to encourage. "Our focus in fact is the citizen of today," the SCTA president Prince Sultan bin Salman bin Abdulaziz said on Saturday, shortly after attending a meeting of the World Tourism Organisation in Kazakhstan. "It is not unreasonable to look for foreign tourists while catering to - the expectations and aspirations of Saudi nationals."

The Saudi tourist is a lucrative target. Even in an off-year, with swine flu and global recession weighing on people's minds, some 870,000 citizens travelled abroad this summer, spending 4.7bn riyals in the process, according to the SCTA. This compares with 5.6bn riyals for the summer months of last year, when 1.2 million Saudis went abroad. With the vast majority of these travellers opting for neighbouring states such as Bahrain, Jordan and the UAE, Saudi authorities believe they can encourage holidaymakers to explore attractions even closer to home.

But what exactly are the attractions of Saudi Arabia, a country that Prince Sultan describes as "a treasure of the treasures of the world which has not been explored yet"? Besides the obvious draw of Mecca and Medina, the SCTA has identified more than 7,900 cultural heritage sites that can be developed as tourist destinations. Among the most spectacular are the rock tombs of Medain Saleh, in the north-east of the country, which have been awarded world heritage status by UNESCO. A dozen historic buildings owned by the government will also be developed as "heritage hotels" in partnership with the private sector. A series of heritage villages have also been identified, to be renovated by the SCTA and operated with private partners.

The government is keen to encourage investment in rural areas such as Al-Qasseem and Jizan, which boast spectacular scenery yet also cope with high levels of unemployment. Some 11 regional tourism investment centres have been set up to this end. Capital investment in the industry is forecast to reach 38bn riyals by 2020 from 13bn riyals last year. As the first Arab to travel into space aboard the US shuttle Discovery in 1985, Prince Sultan clearly relishes a challenge. Yet the 2020 tourism plan will face greater obstacles than swine flu.

"The biggest problem is cultural," says a European archaeologist who works in the kingdom. "There's very little appreciation for some of the cultural sites, which are covered in rubbish and graffiti. They're doing the right things, but it's hard to see how you can build a tourism industry at such short notice." @Email:[e-mail]