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Saudi Arabia's Tourism Strategy Is Paying Off

Saudi Arabia's Tourism Strategy Is Paying Off

Saturday, 28 December, 2019 - 14:00
Tourists in Al-Ula, which includes ruins of an ancient city of carved rock tombs.Credit...Tasneem Alsultan for The New York Times

In a makeshift camp under a starry sky, Ghazi Al-Anazi talked about his experience in the fledgling Saudi tourist business. A decade ago, barely in his 20s, he started taking British business associates of his brother to see the wind-carved hills of the Saudi desert.

Now 31, he has a small fleet of S.U.V.s, nearly a dozen employees and a self-taught ability to cater to the whims of visitors from many nations.

“I know what they want to do, and what I need to do about it,” he said, ladling out a dinner of barbecued chicken and Middle Eastern salads to a couple of dozen tourists from France, Ukraine, Malaysia, and the United States.

Mr. Al-Anazi and his business, Ghazi Tours, take up to 900 visitors a month on treks like this one to a dry riverbed dotted with venerable acacia trees north of Riyadh, the Saudi capital.

ImageTourists, led by Ghazi Al-Anazi, climbing a rock formation in the desert near Riyadh.

But he’s confident those numbers are about to multiply, as Saudi Arabia begins to open itself up as a major tourist destination. The government recently began issuing tourist visas for the first time, a remarkable shift for a traditionally shuttered society.

And it goes far beyond that: Billions of dollars are being poured into vast tourism projects throughout the kingdom, from flashy resorts to new airports, in a bid to shift the economy away from its dependence on the petroleum industry and the government jobs it finances.

Visiting Saudi Arabia has long been a difficult proposition for everyone except Muslim pilgrims going on the hajj and business travelers. For decades, historic sites have been largely ignored, and hotels and travel services were scarce outside major cities.

Unemployment among Saudi nationals is stubbornly high, about 12 percent. But the government figures that the travel industry, which employs about 600,000 people, can be expanded to create up to a million more jobs, as the need for everything from drivers, chefs and guides to hotel managers and archaeologists expands.

The move toward tourism was devised by Crown Prince Mohammed bin Salman, the kingdom’s 34-year-old chief policymaker, whose Vision 2030 program seeks to diversify the economy, draw in more outside investment and expand the private sector.

The Saudis are hiring international real estate executives and introducing elaborate advertising campaigns to try to put themselves on the map. Already, there are signs the push is paying off: Saudi hotel room sales in the first nine months of 2019 increased 11.8 percent from the same period last year.

Saudi Arabia is promoting ultramodern resorts, ruins from ancient civilizations and romantic desert landscapes once crossed by Lawrence of Arabia. And tour guides won’t object if you want to take a selfie with a camel.

Referring the vast golden vistas, “I call it the new yellow oil,” said Amr Al Madani, the chief executive of the Royal Commission for Al-Ula, a region in the northwest part of the kingdom that is roughly the size of New Jersey.

Al-Ula includes the evocative ruins of an ancient city of carved rock tombs, called Mada’in Saleh. Like Petra, a popular tourist draw in southern Jordan, the city was built by the Nabataeans about 2,000 years ago.

The vast region has only 45,000 residents. There are some existing resorts, and France’s Accor chain recently agreed to manage one. Mr. Madani is planning an investment of up to $20 billion, from a mix of public and private sources, to finance airport expansion, hotels and other facilities to accommodate up to two million visitors drawn to archaeological sites as well as food and cultural attractions.

An even more ambitious scheme is under construction on Saudi Arabia’s western coast. The Red Sea project covers a remote area with 120 miles of coastline, more than 90 islands and extensive coral reefs that could one day be a diving and snorkeling paradise.

The Saudis want to put four dozen luxury hotels there, including 14 in a first phase, forecasting that these facilities will eventually contribute around $6 billion a year to the economy. Accor has agreed to participate, and the developers say they are in talks with other international hotel groups.

The Public Investment Fund, Prince Mohammed’s $320 billion vehicle for economic makeover, owns the Red Sea scheme and is providing some of the initial capital. Proceeds from the recent sale of a stake in the national oil company, Saudi Aramco, are likely to flow into the investment fund, and could finance other tourist projects.

Prince Mohammed chairs the Red Sea Development Company as well as the Al-Ula commission. John Pagano, Red Sea’s chief executive, said the prince knew the area “intimately” from excursions on his yacht.

On one occasion, the prince told the developers to think again about putting a resort on a certain island because the water surrounding it is not turquoise enough.

“We never made that mistake again, “ said Mr. Pagano, a former senior executive at London’s Canary Wharf development.

These projects are the size of small countries, and the prince is taking advantage of their scale and sparse populations to plan distinctive communities. The Red Sea development, for instance, will not be connected to the national electric grid and will rely completely on renewable energy like wind and solar, according to Mr. Pagano, who is a Canadian citizen.

Both the Red Sea and Al-Ula projects aspire to attract wealthy, ecology-minded tourists willing to pay a premium for a novel and relatively unspoiled destination. Some travel analysts say this approach may pay dividends.

“This planet is running out of places to go,” said Philip Wooller, Middle East director for the travel research firm STR.

Aman Resorts, a Swiss-based hotel group that caters to the wealthy and celebrities, is setting up three establishments in Al-Ula, with a plan to open in 2023. “There is a huge amount of culture to be discovered and explored, and that is exactly what our guests want to do,” said Anna Nash, a spokeswoman for the company.

Still, Mr. Wooller said, the Saudis are starting “at the very very beginning.” Although the kingdom accommodates about 15 million international visitors a year, the bulk of them for Muslim pilgrimages, tourism has largely been limited to side trips after business meetings. A huge training and hotel-building exercise is going to be required to meet the government’s goal of 100 million domestic and international visits by 2030, more than double the 41 million of 2018.

(The New York Times)

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