Investing in Saudi Arabias tourist destinations

I was shocked to see the mass exodus of travelers at the King Fahd Causeway, connecting Saudi Arabia and Bahrain, on the first day that travel restrictions were lifted. Since the pandemic started over a year ago, and after thousands of nationals and residents explored the Kingdom’s tourist sites, I thought local destinations would be the most obvious choice for those seeking a summer break.

Apparently, this was not the case. Friends from different parts of the Kingdom expressed their concern that the areas they live in — including those with stunning views and climates, such Al-Shafa and Al-Hada near Taif city in the western region and Al-Baha and Abha in the southern region — did not have the infrastructure and services necessary to attract local tourists.

It was music to my ears to learn of the appointment of Gloria Guevara Manzo — the former Mexican secretary of tourism and former CEO and president of the World Travel and Tourism Council — as chief special adviser to the Saudi Ministry of Tourism. With her extensive experience in the public and private tourism sectors, I believe that she will help transform these marvelous sites into popular destinations not only for local tourists but also for international ones.

Furthermore, she will contribute to strengthening cooperation with international partners, developing the skills of human capital and supporting the large-scale ongoing giga-projects that are part of the Kingdom’s Vision 2030.

Tourism is a key pillar of any economy, including that of the Kingdom, especially considering the reforms aimed at weaning the country off its reliance on oil revenue.

The government will be relying on tourism revenue mainly from new cultural destinations, such as AlUla and Diriyah, as well as the other entertainment destinations launched by the Public Investment Fund, including the Six Flags amusement park near Riyadh in Qiddiya; the luxury waterfront resorts by the Red Sea Co. and its sister, AMAALA; and the iconic NEOM city.

As financial advisers and investment bankers, we believe that the tourism sector will be a key driver of growth for the Saudi economy, which will provide promising returns to local and international investors with an expected contribution to the gross domestic product (GDP) exceeding 10 percent by 2030. The impact will not only be on the GDP but also on employment, the development of remote rural areas and the creation of cultural and wellness destinations.

In my opinion, the success of the tourism industry, in the long run, will be driven mainly by the strength of the private sector, supported by different government initiatives, such as the SR 15 billion ($4 billion) tourism development fund. The private sector should thus consider investing in the development of the infrastructure and hospitality services of these tourist sites mentioned above and any other stunning sites in the country.

• Basil M.K. Al-Ghalayini is the chairman and CEO of BMG Financial Group.