Sustainable Tourism

Riyadh Drills for ‘White Oil’

Tourism has never been a priority in Saudi Arabia, ostensibly because of visitors’ lack of sensitivity to local customs. Peripatetic businessmen are one thing; individual or group travelers wandering about the country are quite another. Better to focus government energies on Muslim arrivals at Jeddah, en route to Mecca and Medina.

All that is about to tilt differently. Prince Khalid Al-Faisal, Governor of Mecca Province, contends: “Tourism is our white oil.” The sector is an important catalyst in Riyadh’s Saudi Vision 2030 master plan.

As part of its diversification from an oil-based economy, Saudi Arabia will announce standards for tourist visas by the end of March. Official statements indicate that tourist visas will be tied to Umrah, a religious pilgrimage that can be undertaken at any time of the year. That constraint limits the universe of applicants to those Muslims who otherwise have access to the country. Informal conversations suggest that the move is a stepping stone to marketing the nation more broadly as a vacation destination.

Official tourist-visa guidelines are overdue, amid speculation on the forthcoming framework. There was a rumor in circulation earlier this month that Saudi Arabia would allow single women travelers to enter the country. The report proved to be only partially correct. Those under 25 years old will still be required to have a male chaperone.

Foreigners of course will be drawn to Saudi Arabia. Expect to see a new wave of Red Sea resorts built to accommodate the influx, as well as a surge in environmental travel to sites like the Al Wahab Crater. The crown jewel of Saudi Arabian tourism, at least from an archaeological perspective, may be Mada’in Saleh, an ancient Nabatean city tucked away in the western desert. Think Petra before Indiana Jones.

The government wants to bring 30 million Umrah-based visitors a year to the Kingdom, representing about a 275% increase over current levels in a 12-year period. For context, that future number is about the same as now seen by Thailand. The Saudi Commission for Tourism and National Heritage might reach that figure. Or not. It took Thailand about 20 years to achieve its level from a similar base, yet with a truly global market for its hospitality sector.

Authorities have their work cut out for them. The draw of Dubai is inescapable among local and regional tourists; while the lure of Egypt dominates international travel agendas. Saudi officials will not budge on the country’s strict no-alcohol policies, given the proximity of many tourist venues to Mecca and Medina. There are staffing and training challenges. The key may be Saudi Arabia’s ability to promote itself among non-Arab visitors, including the middle classes of Indonesia, Nigeria, and Pakistan.

Our Vantage Point: Growth in the Saudi tourism is likely to pace at a moderate speed. While we are wary of unbridled fanfare, industry momentum could offer sustained benefits for cross-border investors.

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Image: Mada’in Saleh was at the crossroads of the incense and spice trade. Credit: Brizardh at Can Stock Photo.

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