AHIC: KSA is land of hotel investment opportunity

Saudi Arabia outlines ambitious plan to beef up tourism infrastructure

KSA is targeting tourism with a master plan.
KSA is targeting tourism with a master plan.

Saudi Arabia is shaping up to be a investor's goldmine as the Kingdom's ambitious plans to grow its tourism infrastructure get up and running.

In fact, the Saudi Commission for Tourism & Antiquities (SCTA), which has recently been transformed by the government from a planning organisation to a regulator and facilitator, is actively seeking partnerships with private investors who wish to claim their stake of the many developments in the pipeline.

"We are living in a modern age and business is different - we do not want to play the heavy-handed role with investors; we want to be a partner and a facilitator," explained SCTA chairman and president HRH Prince Sultan Bin Salman Bin Abdulaziz Al-Saud, speaking yesterday at the Arabian Hotel Investment Conference (AHIC) in Dubai.

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He said the SCTA wanted "to stabilise the relationship between the government and the private sector" in its bid to facilitate and promote Saudi tourism and carry out the tourism master plan for the Kingdom.

The plan, which is segregated into five-year strategies, encompasses many sectors and projects including hotels, airports, tour operators, roads and railways, the MICE industry, development of islands and even brand new destinations.

And some of the key aims of the plan, revealed Prince Sultan, was to create jobs in tourism, encourage local businesses to be part of the industry and also to boost domestic tourism.

"The biggest challenge is the Saudi tourist," he said. "Saudis spend around four billion Riyals going abroad each year; we want then to stay here.

In terms of the potential for hotel investors, the possibilities are endless and not only involves hotels, resorts and furnished apartments, but eco lodges, farm stay properties and heritage buildings, Prince Sultan noted.

The master plan is considered conservative by some in that it aims to double the current number of hotel rooms in the Kingdom from 117,000 to 254,319 by 2020 and more than double the number of furnished apartments, the number of which currently stands at 100,000.

The latter are likely to be in the budget to "budget plus" category, SCTA vice president for investment Dr Salah K Al-Bukhyyet told Hotelier Middle East in an exclusive interview.

"The market surveys that we have conducted reveal our target audience is domestic tourism and that they want furnished units," he said.

"Saudi Arabian families are big so they need the space and facilities like a kitchen so a furnished apartment is better value for money than a hotel where they'd have to take several rooms."

Some of the new hotels and units will be located at the several new destinations planned for Saudi Arabia, including 21 on the Red Sea coast alone.

Others are planned in the mountains and in historical city centres or on heritage sites.

The residents of many of these smaller locations were willing to embrace tourism said Prince Sultan and some small enterprises were being aided by the SCTA to help develop or convert their own properties by way of subsidies or access to loans, he added.

"We want to create zones that people can drive to and find accommodation for the weekend, whether it be in the desert or on a farm," Prince Sultan continued.

"Saudi Arabia is very hungry for accommodation," he concluded.

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