Destination KSA

Saudi Arabia

Domestic tourism is becoming a buzz word in Saudi Arabia, with the government and travel and tourism players eager to capitalise on this market in particular. Tatiana Tsierkezou speaks to the industry.

Those familiar with the Kingdom of Saudi Arabia will know that religious tourism is a key money maker, with thousands-upon-thousands of pilgrims making their way to the country each year for spiritual purposes.

But also on the minds of tourism movers and shakers is domestic travel, which presents a wealth of possibility and, potentially, a lot of profitability. Like any other country’s nationals, the people of Saudi Arabia enjoy a local weekend getaway within their culture-fuelled nation, to explore all it has to offer in terms of entertainment and heritage.

ATM2020

DOMESTIC BOOM

According to the World Travel and Tourism Council, the country’s tourism sector is expected to contribute over $81 billion to Saudi Arabia’s GDP, with oil taking a backseat and tourism being put in the spotlight. These conscientious numbers are set to be driven, in part, by domestic tourism, with the Saudi Government aiming to boost household spending on cultural and entertainment attractions within the country from 2.9 per cent, to more than double, at six per cent.

Speaking to TTG exclusively about the significance of domestic tourism was group operations manager, Swiss International Hotels & Resorts – Middle East, Shady Boueiry: “Domestic tourism is the heart of Saudi tourism. The people of Saudi Arabia move from one place to another during the weekends and holidays. The majority of guests that we accommodate in our hotels are Saudis coming from different provinces.”

Boueiry shared that the hotel group encourages and stimulates domestic tourism with various attractively priced packages that are promoted to the Saudi public via social media or within its own hotels in other provinces.

While religious tourism grows from strength-to-strength each year, so does travel for leisure purposes, according to industry professionals, especially the domestic tourism market.

“We believe that [domestic tourism] is a vastly untapped market,” explained country general manager – Middle East and Turkey, The Ascott Limited, Vincent Miccolis to TTG.

“Local tourism comprises the largest and most unaddressed segment in the KSA, and it is a major focus point in The Ascott Limited’s operations across the GCC.”

Research has revealed that domestic tourism has been witnessing growth in Saudi Arabia, with Makkah topping the list of most visited destinations. Moreover, spending on domestic tourism in Saudi Arabia amounted to $11.97 billion in 2016, according to figures from the Kingdom’s press agency. The research also revealed that the number of domestic tourist trips in the year exceeded 47.5 million, compared to 46.5 million in 2015.

With the numbers speaking for themselves, The Ascott Limited is eager to boost its presence in Saudi Arabia, with aggressive expansion in the pipeline.

“We are expanding in the KSA with eight new properties in the works, including Ascott Rafal Olaya Riyadh, Ascott Makkah, Ascott Corniche Al Khobar, Ascott Villas Riyadh, Somerset Corniche Jeddah, Somerset Downtown Al Khobar, Citadines Al Khobar and Citadines Abha,” said Miccolis.

Moving on to yet another hospitality giant that is working on consolidating its presence in the country further, The Rezidor Hotel Group is also focusing on the fruits of domestic tourism.

The group’s regional director for the Kingdom of Saudi Arabia, Basel Talal told TTG: “Domestic tourism continues to play an important role in the Saudi economy as a whole. Despite the economic slowdown and the drop in oil prices, the number of local tourist trips inside Saudi Arabia exceeded 47.5 million in 2016 – a 2.3 per cent rise compared to 2015. Under the Saudi Government’s Vision 2030, the hotel industry is projected to experience continued growth in the coming few years. Significant investments have been made in infrastructure and transportation links, which will support domestic tourism in 2017 and beyond.”

Shedding light on The Rezidor Hotel Group’s commitment to supporting tourism within the KSA, Talal shared that extensive hotel development is in pipeline, which is not only concentrated in the Holy Cities or the commercial hubs of Riyadh and Jeddah, but extends across much of the Kingdom.

“Indeed, we have 34 hotels in operation or under development in Saudi Arabia through our upscale Radisson Blu brand, our midscale Park Inn by Radisson brand and our first Radisson RED in the KSA, which is our lifestyle select brand. The growth across our brand portfolio means we are well placed to cater for the different types of traveller within the Kingdom,” he remarked.

And while established tourism entities are currently focused on domestic tourism, new arrivals are readying themselves to hit the ground running.

One such example is the Fairmont Riyadh, which is expecting to celebrate its entry into the city this summer.

The property, which will be the first corporate hotel in Fairmont’s MENA portfolio, will open with a two-pronged strategic focus, one of which will be corporate, and the other, domestic.

General manager, Fairmont Riyadh, Rizwan Shaikh explained: “Domestic tourism is extremely important for us. Fairmont is considered to be very new to the Riyadh market. We are very well-known in Makkah, where we have the biggest hotel located on the holiest site on earth, however in Riyadh, we have some work to do in reaching out to the domestic market.

“One of Fairmont Riyadh’s main goals is to stimulate the local market and local talent with the hospitably we can offer. We have unique activities that will attract, educate and entice our Saudi guests. We are guests here. While we bring our experience, we have lots to learn from the beautiful Saudi culture and heritage,” he told TTG.

THE NEXT STEP

With plans in place to further capitalise on tourism, the Saudi Government last year shed light on its Vision 2030, and since then, new ways to stimulate visitor numbers and spending have been introduced.

Highlighting the determination of the country, last month, president of the Saudi Commission for Tourism and National Heritage, Prince Sultan bin Salman declared that Saudi Arabia will become ‘one of the biggest players’ in the travel and tourism game. This comment followed news of further government investment in the industry, totalling $800 million.

Eager to get the ball rolling, the Government recently formed the General Entertainment Authority, which is set to take control of the funding, promotion and development of the entertainment industry. Meanwhile, well-known theme park operator, Six Flags, has plans in place to enter Saudi Arabia. The first entertainment park is expected to launch in 2020-2021.

Enhancing the country’s retail offering, two further shopping malls will be opening their doors in the KSA: the Mall of Saudi, spanning 300,000m2 and housing a snow park and hotels; and The Avenues Riyadh, worth $1.9 million.

Other noteworthy developments include the Jeddah Tower, which may very well become the tallest building in the world, and a further 61,224 hotels rooms.

Feeling confident about what’s to come this year, Boueiry of Swiss International Hotels & Resorts said: “We expect good business for 2017 and so far, we have signed four new management agreements with new properties.”

Meanwhile, Shaikh of the soon to open Fairmont Riyadh told TTG: “2017 will hopefully be our opening year. We are aiming at end of Q2, beginning of Q3, which will be in the middle of summer. For us, that will be a perfect scenario for our team to settle down and master their areas. With our main goal, ‘Hotel First’, all our team members will work to ensure our new flagship hotel becomes the market leader in the GCC, when it comes to occupancy and rooms rates. Quite a lot of our competitors are eager and anxious to know when we are opening, as we will for sure affect their business.”

With its eye on the prize, the Kingdom of Saudi Arabia has its tourism game face on and is at the ready to reap all the benefits that this industry brings forth.