Saudi Arabia, the biggest Arab economy, will deliver on all of its announced mega-tourism projects, the head of Saudi Tourism Authority said.
There has been an increased push from Saudi Arabia’s Crown Prince Mohammed bin Salman and the kingdom’s sovereign wealth fund, the Public Investment Fund, to commit to investment in the local economy, chief executive Fahd Hamidaddin told a panel discussion at Arabian Travel Market on Monday.
All of the major projects announced to date have “great feasibilities” and there is no reason why they should not materialise, he said.
“Let me tell you what is different this time. I think this not about tourism. This is not about those projects; this is about the new Saudi Arabia," said Mr Hamidaddin
"Has there been any project that was announced within the past four years that has not materialised or not progressed? We have a new central leadership that tracks KPIs [key performance indicators], progress, deliveries and what is different about these giga-projects versus all what was announced before is that these are committed to by the government.”
Saudi Arabia, Opec’s biggest oil exporter, is radically transforming its economy under its Vision 2030 programme to cut its dependence on oil. Developing the tourism sector and opening it to foreign investment is a key part of the kingdom's economic overhaul agenda.
The PIF is backing a number of projects, including the $500 billion futuristic city Neom, the Red Sea Development Project containing islands off the city's western coast, Qiddiya entertainment city near Riyadh, Diriyah Gate, Al Ula and others.
In January, the fund unveiled a five-year strategy amid plans to double its assets to $1.07 trillion.
It will invest a minimum of $40bn a year into the domestic economy until 2025 and grow assets under management to over $2tn by 2030.
In February, the fund also launched a new venture that will invest $3bn in tourism and infrastructure projects in a mountainous area of the Asir region.
In total, there are more than dozen major tourism projects being built in the kingdom.
Domestic tourism in the kingdom has grown significantly in the past year and is expected to strengthen further this year, Mr Hamidaddin said.
“There was a lot done [last year] but I would say domestic tourism was our greatest success,” he said.
The rise in domestic travel has also helped the kingdom’s flag-carrier Saudia to boost operations, Ibrahim Koshy, chief executive of Saudia Air Transport Company told the panel.
“We have our 28 domestic [airports] that have been operating close to 80 per cent of our 2019 levels and demand exceeded capacity at times,” he said.
The reopening of the country's borders to international tourists on Monday means tourism numbers are set to "pick up even further”, with a rise in both leisure and business travel expected this year, Mr Koshy said.
The airline will be able to handle any additional demand from the recently upgraded King Abdulaziz Airport in Jeddah.
“This [the Jeddah hub] is something which we did not have. It is our new home and it is the growth of [our] connectivity, growth of the kingdom.”
Asked about when the airline will return to profitability, Mr Koshy said he expects this will be achieved by 2024.
He said there was great potential for Saudi Arabia’s aviation market to grow as the country intends to attract 100 million tourists by 2030 and boost overall airport users to 330 million.
“Don’t be too surprised if you see aircraft orders to meet some of that demand and capacity,” he said. “There is a lot of growth and lot of capacity requirement, which we are going to have to factor in.”