Saudis locked in by pandemic turn to luxury Riyadh oasis

Saudi Arabia's government looks inward in effort to push tourism during the pandemic

Well-heeled Saudis frolic in an artificial oasis built on salmon-coloured dunes, splashing the cash after a year-long pandemic lock-in that dovetails with efforts to discourage citizens from splurging overseas.

Coronavirus hobbled Saudi Arabia's plans to boost tourism and entertainment, new sectors central to a strategy to diversify the oil-reliant economy.

But cushioning the blow is a lucrative market in which Saudis are forced to spend their money at home.

The Riyadh Oasis – a high-end desert retreat with palm-fringed pools, pop-up restaurants and luxury tents – seeks to lure Saudi high-rollers barred since the start of the pandemic from their usual overseas escapades, part of some of the world's most stringent coronavirus measures.

The sprawling retreat, billed as a "five-star winter sanctuary", is the latest government attempt to reverse a decades-old trend of Saudis spending billions of dollars abroad every year.

"Water, palms, sand," said a Saudi guide, ushering in guests arriving at the retreat on the outskirts of Riyadh in a fleet of luxury cars, from Bentleys to Maseratis. "The oasis has everything."

Unveiled in mid-January for a three-month season, the oasis – whose ticket prices spurred resentment among the less affluent – is the first in a series of entertainment offerings since the pandemic.

"The oasis caters to Saudi HNWs [high net worth individuals], targeting those who could not visit the US or Europe for their annual jaunts," a banker in Riyadh told AFP.

For decades, citizens of Saudi Arabia and other oil-rich Gulf states were seen as top-spending clientele in Europe, largely because of a dearth of entertainment options at home.

Saudi Arabia's annual outbound tourism market is expected to soar to more than $43 billion by 2025, according to the Dublin-based group Research and Markets.

About $18.7bn was spent on tourism overseas in 2019, according to a central bank report.

The government, battling a pandemic-triggered economic contraction, is after a slice of that revenue.

Saudi Arabia recently announced it was extending a ban on overseas travel for its citizens from March 31 to May 17.

The government attributed the decision to a delay in the arrival of coronavirus vaccines in the kingdom, which has reported more than 383,000 infections and 6,500 deaths.

Official data in recent months has shown a surge in domestic tourism and hotel reservations. But the bonanza may be short lived.

A customer survey this month by the tourism company Almosafer, said more than 80 per cent of Saudis plan to travel abroad within six months of travel restrictions being lifted.

Still, the top crude exporter, which has identified leisure and tourism as the main engines of economic reform, is pushing a long-term strategy.

Alongside music festivals and sporting events, hundreds of movie theatres are planned after a decades-old ban on cinemas was lifted in 2018.

The kingdom is also building a Walt Disney-style entertainment city known as Qiddiya, and a luxury resort along the Red Sea – both worth hundreds of billions of dollars.

"These developments should encourage more local spending," said a 2019 report by the global consulting firm McKinsey.

"Currently, more than 50 per cent of Saudi spending on leisure and entertainment is outside the kingdom, with categories such as luxury nearing 70 per cent."

But the steep cost of entertainment stirred public resentment, especially after a tripling of value-added tax last year dented household savings.

The daily rent of the tented glamps at the oasis cost upward of 13,000 riyals ($3,500).

"The glamps cost nearly a month's salary for me," one Saudi media worker told AFP.

Adel Alrajab, chief executive of Seven Experience, one of the companies that helped to set up the Riyadh Oasis, acknowledged it was "not targeting everyone".

"You don't expect the masses to go to five or six-star hotels," he said.