Saudi Arabia Drives Global Tourism Shift with 200 Bn Dollar Push

Tourism Minister Ahmed Al-Khateeb and World Economic Forum CEO Børge Brende shook hands after announcing the “Beyond Tourism” initiative (X)
Tourism Minister Ahmed Al-Khateeb and World Economic Forum CEO Børge Brende shook hands after announcing the “Beyond Tourism” initiative (X)
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Saudi Arabia Drives Global Tourism Shift with 200 Bn Dollar Push

Tourism Minister Ahmed Al-Khateeb and World Economic Forum CEO Børge Brende shook hands after announcing the “Beyond Tourism” initiative (X)
Tourism Minister Ahmed Al-Khateeb and World Economic Forum CEO Børge Brende shook hands after announcing the “Beyond Tourism” initiative (X)

Saudi Arabia, which views tourism as a key driver of economic growth and revenue diversification, is pressing ahead with major projects in the sector, with investments expected to exceed 200 billion dollars over the next five years.

Flagship destinations include NEOM and the Red Sea Project, among other new developments planned through 2030.

The figure was announced by Tourism Minister Ahmed Al-Khateeb in his opening address at the TOURISE 2025 forum in Riyadh on Tuesday. The event, held under the patronage of Saudi Crown Prince Mohammed bin Salman drew senior tourism leaders and policymakers from more than 120 countries.

TOURISE aims to bring governments, the private sector and non-governmental organizations together to drive sustainable growth and innovation in the industry. It seeks to gather all components of the tourism ecosystem annually for the first time to guide strategies, shape partnerships and align investment.

The need for such a platform has grown more urgent with the rapid rise in global travel. Some 1.5 billion people traveled internationally in 2023, a number expected to reach between 2.5 billion and 3 billion by 2035.

This expansion requires significant capital investment. Saudi Arabia alone expects to channel more than 200 billion dollars into tourism over the next five years to support emerging destinations such as NEOM and the Red Sea.

Tourism currently accounts for about 10 percent of global GDP, or roughly 11 trillion dollars. TOURISE 2025 aims to reinforce tourism’s status as a strategic industry that requires organized international cooperation.

Riyadh wants the forum to become a standing global platform for policy dialogue, investment facilitation and innovation, underscoring the Kingdom’s commitment to a more sustainable and inclusive tourism model for future generations.

Global platform
Al-Khateeb said the event serves as an international platform bringing together the public and private sectors to discuss the future of tourism and investment.

He highlighted the Kingdom’s strategy to develop the industry in line with Vision 2030, which positioned tourism as a key engine of economic growth and diversification.

Tourism has become a major driver of economic expansion and youth opportunities in Saudi Arabia, according to Al-Khateeb.

Since 2019, the Kingdom has taken part in global conferences and events, he said, and “these experiences revealed a gap between the private sector, governments and NGOs,” prompting the launch of TOURISE 2025 as a platform bringing the entire tourism ecosystem under one roof, including travel agencies, digital platforms, airlines, airports, transport and accommodation providers, retail, food and beverage, and supporting technologies.

‘Beyond Tourism’
Al-Khateeb launched the “Beyond Tourism” initiative in partnership with the World Economic Forum. The multi-sector initiative focuses on the future of travel and tourism through ten core principles, highlighting the industry’s role as a bridge between cultures, a driver of community empowerment and a creator of opportunities for future generations.

He said tourism will receive increased attention during upcoming World Economic Forum sessions.

Al-Khateeb also outlined global challenges, including a projected rise in traveler numbers, labor shortages, large-scale hospitality investments and the importance of technology and artificial intelligence while preserving human interaction. He stressed that TOURISE 2025 is a global platform to address the sector’s future and develop practical solutions to strengthen its sustainability.

He said the strong turnout at the forum followed “intensive days of work with 160 countries at the UN General Assembly,” adding that ministers and international partners are helping support the development of the sector.

The tourism ecosystem, he noted, extends far beyond travel itself, encompassing travel agencies, digital platforms, airlines, airports, transportation and accommodation, retail, food and beverage, and enabling technologies, all of which form essential parts of the tourism experience.

Al-Khateeb said around 1.5 billion people traveled last year, even though only 20 percent of the world’s population travels. He expects the number to rise to 2.5 billion or 3 billion by 2035.

He cited challenges facing the industry worldwide, including aircraft manufacturers’ ability to meet rising demand and major expansions in hospitality investments. In Saudi Arabia alone, more than 200 billion dollars were spent in the past five years and will be spent in the next five to build new destinations and cities such as NEOM and the Red Sea.

Millions of workers
Al-Khateeb said 357 million people currently work in tourism globally and that the sector is expected to add 90 million new jobs by 2034. He said the “jobs gap” and the need for practical solutions were discussed during UN General Assembly meetings.

On technology, he said artificial intelligence “is coming and cannot be avoided,” but should be used carefully in sectors that rely heavily on human interaction. He stressed that human connection remains essential in tourism and hospitality, noting that women hold 40 percent of jobs in the sector and youth hold 80 percent, making tourism one of the best industries for creating sustainable employment.

Attracting investment flows
Investment Minister Khalid Al-Falih said tourism in Saudi Arabia has achieved major leaps, with its contribution to GDP rising to more than 200 billion riyals, or 53 billion dollars, equivalent to roughly 5 percent of output, the medium-term target for 2030.

He said this growth is closely linked to investment, with tourism assets increasing fivefold since Vision 2030 was launched. Foreign direct investment inflows have tripled, and foreign investment in hospitality, hotels and tourism accommodation has risen eightfold. The Kingdom has added about 400,000 hotel rooms since its tourism strategy began.

Tourism, he said, is a resilient and interconnected sector that influences quality of life, travel, entertainment, culture, sports and other areas. He noted that countries with limited natural resources have cemented their position on the global tourism map by creating an attractive investment environment and drawing rising flows of capital.

He said tourism and investment form a “positive and integrated cycle,” adding that “investment brings tourism, and tourism attracts more investment,” supporting sustainable economic development in the Kingdom.

Build-up of economic value
Economy and Planning Minister Faisal Al-Ibrahim said tourism is a key accelerator of economic diversification, adding that its impact extends across multiple sectors, generating cumulative economic value nationwide.

Tourism naturally supports decentralized growth, he said, allowing visitors to explore regions beyond the Kingdom’s three major cities. This opens opportunities for smaller cities to tap global demand and supports small and medium-sized enterprises, family businesses, handicrafts, arts, culture and hospitality, enabling them to grow into larger and more attractive investment players.

He said tourism also drives a shift from perception to partnership, noting that a visitor’s experience in the Kingdom may lead to long-term economic decisions.

The number of domestic and international tourists rose from 80 million in 2019 to 116 million over five years, an increase of 45 percent, reflecting the scale of growth and economic impact.

He said current momentum stems from major infrastructure investments completed in recent years, along with new projects underway that will support public and tourism-sector demand over the next seven to ten years.

Tourism, he concluded, is a core driver of sustained economic momentum and of the long-term shift toward a productivity-based, diversified economy that creates opportunities for Saudis across the Kingdom.

Global challenges
Lubna Olayan, Chairwoman of the Olayan Group, said Saudi Arabia’s new investment law aims to ensure equal treatment for domestic and foreign investors. She underscored the importance of transparency to attract foreign direct investment and drive Saudi Arabia’s economic growth.

She said the strength and diversification of the Saudi economy beyond oil were critical to weathering recent shocks. The Kingdom enjoys the lowest debt-to-GDP ratio among G20 countries, she added, reflecting its resilience and ability to withstand global economic challenges.



Oil to Fabric: Middle East Crises Reshape Global Fashion

A worker arranges spools of thread at a textile factory in Haiyan, Jiangsu province, China (Reuters)
A worker arranges spools of thread at a textile factory in Haiyan, Jiangsu province, China (Reuters)
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Oil to Fabric: Middle East Crises Reshape Global Fashion

A worker arranges spools of thread at a textile factory in Haiyan, Jiangsu province, China (Reuters)
A worker arranges spools of thread at a textile factory in Haiyan, Jiangsu province, China (Reuters)

Rising oil prices are no longer just an energy market story; they are feeding directly into the cost of clothing. From petrochemical plants to fabric mills and retail racks, a complex supply chain is passing on higher costs, pushing up the final price consumers pay.

According to the “Materials Market 2025” report by the Organization for Textile Exchange, polyester makes up about 59% of global fabric output, with roughly 88% produced from non-recycled petroleum sources, leaving the industry exposed to energy price swings.

Oil prices have surged about 32% since the start of the US-Israeli war on Iran on Feb. 28, approaching $100 per barrel.

Fabrics under oil pressure

Amal Saqr, a textile design consultant, said the sector is highly sensitive to shifts in oil prices because of its reliance on synthetic fibers.

More than 60% of fabrics used in global clothing production depend on petroleum-based materials such as polyester, nylon and acrylic, she said, adding that any rise in oil prices feeds directly into fabric costs.

She pointed to 2008, when polyester prices jumped about 30% within three months as oil hit record highs, forcing Asian spinning mills to cut output by 20% to 25%.

Disruptions in the Red Sea between 2023 and 2024 also drove shipping costs up by about 300%, raising raw material costs and straining supply chains.

Yemen’s Iran-aligned Houthis began targeting ships linked to Israel on Nov. 19, 2023, using drones and missiles.

Natural fabrics not immune

Natural fibers such as cotton and linen avoid direct reliance on oil, but are still exposed to energy costs, Saqr said, noting that farming depends on fertilizers, fuel and transport.

The global fertilizer crisis in 2021 pushed prices up about 80%, driving cotton prices higher by roughly 40%. Later disruptions in the Strait of Hormuz added another 40% increase in fertilizer costs due to shipping delays.

Global cotton production reached about 24.5 million tons in 2024, or roughly 19% of total fiber output, making it less dominant than synthetic fibers but relatively more stable in pricing, according to the Textile Exchange report.

Rising production costs

Higher energy prices are hitting every stage of production, from spinning to dyeing and drying, Saqr said.

With already thin margins, textile factories face a stark choice: raise prices or cut output, both of which ultimately hit consumers.

World Bank data shows operating costs for textile factories in several countries have risen by about 18% following recent energy price increases.

Import markets feel it fast

Import-dependent markets are quick to absorb shocks from shipping or energy disruptions, Saqr said.

Shipping costs from Asia have lifted synthetic fabric prices by 10% to 18%, while imported cotton prices have climbed by 15% to 25%.

Rerouting shipments from the Strait of Hormuz to the Cape of Good Hope has added 10 to 14 days to transit times, leading to shortages and swings in the availability of fabrics and garments.

Value chains under rethink

Burak Cakmak, chief executive of the Saudi Fashion Commission, said the impact of oil prices is not immediate, as final pricing reflects a full value chain including production, marketing and distribution.

Instead of passing costs on, many brands are rethinking how to create value, improving efficiency and working more closely with suppliers, he said.

He also pointed to a shift toward localized production, with brands operating closer to their markets and managing inventory more tightly to control costs and improve flexibility.

Sustainability gains urgency

Sustainability is no longer just an environmental concern; it is tied to efficiency and long-term economic viability, Cakmak said.

The sector is moving toward circular models, including recycling and waste reduction, practices that are becoming essential to improving operations.

Designers double down

Anna Zinola, director of Istituto Marangoni in Riyadh, said rising oil prices are reinforcing, not reshaping, designers’ shift toward more conscious material choices.

Sustainability is embedded in the curriculum as a core approach guiding every design decision, she said.

Students are trained to balance cost, sustainability and consumer demand, while exploring material innovations that combine environmental and commercial goals.

Prices set to rise

Reports by McKinsey and Euratex expect global clothing prices to rise by 8% to 12% over the next year, as supply chain pressure persists and shipping costs remain elevated.


Dollar Gains as Iran War Keeps Central Banks in Wait-and-see Mode

US dollar banknotes. (Reuters)
US dollar banknotes. (Reuters)
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Dollar Gains as Iran War Keeps Central Banks in Wait-and-see Mode

US dollar banknotes. (Reuters)
US dollar banknotes. (Reuters)

The dollar edged up against the euro on Wednesday on lingering concerns about the ongoing US-Israeli war with Iran, even after President Donald Trump extended the ceasefire to give Tehran more time to present a unified proposal for ending the conflict. Iran seized two ships in the Strait of Hormuz on Wednesday, tightening its grip on the strategic waterway, after Trump called off attacks indefinitely with no sign of peace talks restarting.

Markets have been swayed by alternating bouts of optimism that a deal is within reach and fears that the conflict could drag on, causing prolonged disruptions to energy markets.

"It's tough to have a really strong conviction at this point," said Dominic Bunning, head of G10 FX strategy at Nomura. That said, "overall it seems like both sides are more inclined to make progress than to re-escalate."

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was last up 0.06% at 98.44, with the euro down 0.09% at $1.1731. The Japanese yen strengthened 0.09% against the greenback to 159.26 per dollar. Sterling strengthened 0.01% to $1.3507.

CENTRAL BANKS ON HOLD

Markets are pricing in low odds that the Federal Reserve will cut interest rates this year, given the risk that the war could fuel higher inflation.

Fed funds futures traders now see only a 35% chance of one cut by the end of 2026. Traders previously had forecast two cuts, with Kevin Warsh - Trump's nominee to lead the US central bank - seen as more likely to cut rates than Fed Chair Jerome Powell.

Warsh said on Tuesday he had made no promises to Trump about cutting rates, seeking to assure senators considering his confirmation that he would act independently of the White House while pursuing broad reforms.

US Treasury Secretary Scott Bessent said earlier this month that the Fed should "wait and see" before deciding whether to lower rates amid the war in Iran, noting that the US economy had been "very strong" in January and February.

"Since the war began, comments from Treasury Secretary Bessent make it seem like he recognizes that it might take Warsh some time to cut interest rates," said Marc Chandler, chief market strategist at Bannockburn Global Forex.

"And this is what I think we're going to see next week. You've got five G10 central banks that meet and none of them are going to do anything. It's a watch-and-wait" situation, Chandler said.

The Fed, European Central Bank, Bank of Japan, Bank of England and Bank of Canada are all scheduled to hold policy meetings next week.


Türkiye Central Bank Holds Rates at 37% as it Eyes Iran War Fallout

Central Bank of Türkiye (official website)
Central Bank of Türkiye (official website)
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Türkiye Central Bank Holds Rates at 37% as it Eyes Iran War Fallout

Central Bank of Türkiye (official website)
Central Bank of Türkiye (official website)

Türkiye's central bank held its key interest rate at 37% as expected on Wednesday, deciding not to hike but warning that fallout from the Iran war could yet change the inflation outlook.

It was the second straight policy meeting at which the bank held steady despite some expectations that it could tighten, suggesting it was preparing to stand pat well into the summer, analysts said.

The central bank also did not adjust its overnight lending and borrowing rates from 40% and 35.5% respectively. Since the war started in late February, it has halted an easing cycle that began in late 2024 and taken other liquidity steps that pushed the lira overnight rate up to the 40% limit - moves that prompted some analysts to predict a 300-point hike this week.

The bank said it is closely monitoring any "potential second-round effects" on inflation, for which "leading indicators suggest a slight increase in the underlying trend in April".

"Amid geopolitical developments and the resulting uncertainties, energy prices remain elevated and exhibit notable volatility," its policy committee added.

In a Reuters poll, 19 of 23 economists predicted no change to borrowing costs, while four forecast a rate hike. The war-related surge in energy prices has rattled import-heavy economies like Türkiye where inflation was 30.87% last month, but where expectations have risen. On Tuesday, US President Donald Trump extended the war ceasefire indefinitely.

The ceasefire allowed the central bank "to refrain from tightening," William Jackson, economist at Capital Economics, said in a note. "So long as energy prices don't spike again, we think the CBRT will opt to leave interest rates on hold for at least a few more months."

Economists generally anticipate that rate cuts may resume in September. The Reuters poll predicted rates would be cut to only 32.75% by year-end. A separate poll found end-2026 consumer price inflation at 27.53%, compared with 25.38% in a previous poll.

In its quarterly inflation report in February - before the war began - the central bank had kept its end-2026 interim inflation target at 16%, while lifting its forecast range to 15-21% from 13-19% previously.

A year ago, the central bank temporarily reversed course and hiked rates in the face of political instability that rattled markets, though it returned to rate cuts by mid-2025.