The vision of Saudi Arabia 2030 hides great opportunities for tourism, hospitality

Over the past few years, Saudi Arabia has witnessed a significant number of mega project signings, in line with its ambitious Saudi Vision 2030. Recognizing the volume of projects announced in the country, hospitality group PKF recently held one of its spotlight events in Riyadh.

According to PKF, most of the projects announced so far are valued at over $100 billion each and are part of Saudi Vision 2030. NEOM, the Red Sea Project, Diriyah Gate and Qiddiya are among the latest ambitious megaprojects announced. Seeking to reduce its dependence on oil and capitalize on the Kingdom’s strategic position, Vision 2030 focuses on tourism, health infrastructure and education, besides improving the country’s overall image. More than $800 billion is expected to be spent on this plan.

In November 2021, nine global luxury hotel brands signed hotel management agreements to manage resorts in the first phase of development of the Red Sea project. Red Sea Development Co., the developer of the country’s west coast regenerative tourism project, has signed hotel deals with Edition Hotels, St. Regis Hotels & Resorts, Fairmont Hotel & Resorts, Raffles Hotels & Resorts, SLS Hotels & Residences, Grand Hyatt, InterContinental Hotels & Resorts, Six Senses and Jumeirah Hotels & Resorts. The agreement covers nine of the 16 properties under development.

The first phase of development is scheduled to be completed by the end of the year, which will see 16 hotels offering 3,000 rooms across five islands and two inland sites. About 12 of these sites are expected to open by the end of the year.

NEOM, a region in northwestern Saudi Arabia on the Red Sea, is being built from scratch as a “living laboratory.” In October 2022, the project announced Ennismore as its inaugural partner for Trojena.

Vision 2030’s initial focus is to create a product that will woo domestic travelers who currently do not travel much within the country. Millions of pilgrims visiting the country’s holy places are the next major target area, followed by international travelers.

While there have been questions about how the projects will be completed in time to meet the Vision 2030 deadlines, given the sheer size of the projects, many projects have hit the ground running and are already in development.

“I also think some may not see completion in time. It’s a simple fact that knows how the materials and, ultimately, the personnel to run these places are not in great supply. Still, we will see some completed in time, no doubt,” said Nils Heckscher, head of Africa, who also oversees PKF’s Middle East operations.

One of the first projects on this list will be Troena, the megacity and official host site for the 2029 Asian Winter Games. Although there were concerns about the desert heat during the games, the region actually gets snow in the winter and is around 10 degrees colder than the rest of the country. The megacity is between the Red Sea and the mountains and will include a technology city, a coastal destination, an international seaport and residential, commercial and office space. Trojena will offer year-round outdoor skiing and adventure sports and is scheduled for completion in 2026. Ennismore and GHM have signed deals to open three hotels (25Hours, Morgans Originals and The Chedi Trojena) in the megacity.

Sustainability is a top priority for these projects. The construction and clearing of land, and in some cases of the local population, is not necessarily based on the same principles.

“It is encouraging to see public-private partnerships that have a strong focus on ESG principles and that intend to build in a sustainable way; sourcing local materials as well as designing and employing local people who will be trained and given ample opportunities for advancement. These are essential building blocks in creating great and sustainable destinations,” Heckscher said.

Once these projects are completed, they will create a transformed country and citizens. The country represents the biggest hospitality and tourism opportunity, which is expected to continue for at least another five years, PKF said.

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