RIYADH: Saudi Arabia has staked its position as the leading force behind the growth of the Middle East’s sports industry, according to a report by the US-Saudi Business Council.

The contribution of sports to Saudi Arabia’s gross domestic product grew from SR2.4 billion ($640 million) in 2016 to SR6.5 billion in 2019, driven by the Kingdom’s status as the largest and most populous country in the GCC, with more than two-thirds of the population under 35, along with its Vision 2030 commitment to develop sports as a key non-oil industry.

That figure is expected to grow to SR18 billion by 2030, according to the Kingdom’s Ministry of Sports.

The latest figures released in 2020 before the pandemic showed participation of Saudi citizens in sports rose from 13 percent to 20 percent following the launch of the Quality of Life program, according to the General Authority for Statistics (GAStat).

The government aims to raise this to 40 percent by 2030 through investment in sporting facilities, expansion of women’s and children’s sports education and training, and raising the national profile of Saudi Arabia as a sporting destination.

Saudi Vision 2030 has opened new opportunities in the sports industry for local and international firms as part of efforts to boost Saudi youth participation in sports, utilize the private sector to address infrastructure and knowledge gaps, and pursue a national reputation for leadership in sports.

The Kingdom currently has SR11 billion of major sports projects planned or under construction. These include mega-projects such as NEOM, Qiddiya, AMAALA, AlUla, and the Riyadh City project as well as municipal projects that include a new motor park at King Abdullah Economic City and construction of new recreational and university fitness facilities.

These projects employ a range of companies, including local construction firms, international design and consulting firms, international EPC firms, and leading sports bodies with specific domain knowledge.

“Most of the economic benefits will flow to Saudi companies, which do the majority of business associated with sports in the Kingdom. This includes construction, facilities management and project logistics. However, foreign companies and associations are actively partnering with Saudi firms to elevate specific sports domains,” said Albara’a Alwazir, director of economic research at the US-Saudi Business Council.

“Saudi Arabia’s mega-project pipeline will continue to provide numerous projects and job opportunities for sports infrastructure. As talent identification and development programs become more established, demand for sporting goods, facilities and international investment will increase. Large developments such as Qiddiya and the Riyadh Sports Boulevard are expected to produce tens of thousands of jobs during construction, and also provide permanent job opportunities in sports and tourism for Saudi nationals.”

Women’s sports, in particular, represent a significant economic opportunity for local and international firms to address a growing and underdeveloped market segment. The sports ministry estimates that female participation in sports has increased by nearly 150 percent in the past five years. According to a 2019 GAStat survey, 10 percent of men who did not take part in sports cited lack of facilities as a reason compared with 25 percent of women, highlighting a market opportunity for sports and fitness companies.

Saudi Arabia also launched a SR15 billion Tourism Development Fund in June 2020 to develop the sector in collaboration with private and investment banks. With tourism envisioned as a new pillar of the Kingdom’s non-oil economy, sports tourism will be a key element of this strategy from smaller scale amenity development to multibillion-dollar mega-projects.

Since 2016, the Kingdom has actively bid to host major international sporting events and sought to attract international investment by developing venues for sports that are popular with Saudi audiences. Soccer, boxing and wrestling are particularly popular with Saudi audiences and have been among the top international events held in Saudi Arabia.

The Kingdom is expected to continue pursuing opportunities to host sporting events as well as sports that cater to the natural advantages of the Saudi landscape such as desert sports in AlUla and water sports at NEOM and the Red Sea project.

While Saudi Arabia holds high ambitions for its competitiveness in professional sports under Vision 2030, recreational and tourism-related sports represent a broader array of activities and a sustainable market opportunity to build a new pillar of the country’s non-oil economy.

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