The Saudi travel and tourism industry, which was tossed into turmoil by the tragic events of Sept. 11, is bouncing back but finding clear changes to previously established travel patterns. Most notably, the Saudi government is beginning to realize its untapped tourism potential, particularly for Saudi travelers and for Muslims from abroad that want to visit the cradle of their faith and travel among people of shared values.
Saudi Arabia established a tourism-development government overseer called the Supreme Commission for Tourism (SCT) six years ago with the aim of developing sustainable tourism for the socio-cultural, environmental and economic benefits under the supervision of SCT Secretary-General Prince Sultan ibn Salman. The SCT was set up to harness its unique endowments to develop local tourism and to contribute to economic diversification, employment creation and heritage preservation in the process.
A board of directors, chaired by Crown Prince Sultan, currently manages the SCT.
The fact the SCT was created as a separate commission rather than a ministry, and that it answers to the crown prince, illustrates just how seriously the Saudi government takes the development of tourism, which in some countries (like Mexico or France) is one of the most important sources of revenue — and jobs.
In fact the establishment of the tourism commission was in line with the Kingdom’s strategy of diversifying its sources of revenue. The economic potential of tourism in the Islamic world may be another reason to create this body. This can be gauged from the fact that the total number of Muslims presently exceeds 1.3 billion worldwide. Aside from being the cradle of Islam, the Kingdom’s geographical, economic and cultural attributes has a lot to offer to tourists, especially Muslim tourists, all of whom must come to Saudi Arabia anyway at least once in their lives for the compulsory Haj.
But aside from the religious elements, Saudi Arabia is rich with diverse natural attributes and tourist attractions in addition to a well-developed infrastructure.
According to the 20-year SCT plan, more than 10,000 natural, historical and cultural sites have been identified and electronically documented so far in Saudi Arabia. These sites were evaluated on the basis of their tourism value and their current state. Many of these sites have tourism potentials, making the Kingdom an important destination for cultural tourism.
Therefore, one of the SCT’s general strategy recommendations seeks the development of these sites into tourism attractions on priority basis. According to SCT, there are more than 1,679 archaeological sites, 184 sites directly related to the time of the Prophet (pbuh), 143 Saudi historical sites, 58 literature heritage sites, 1,249 sites related to customs and traditions besides 369 sites for handicrafts and cottage industries. These are in addition to 534 literary and story-telling events, 61 folklore festivals, including the famous Janadariya Festival staged every year outside of Riyadh, that need to be further promoted.
Moreover, the SCT’s strategy also sets priorities for the domestic market and religious tourism related to Umrah and Haj. The SCT has predicted that the number of tourists will jump from 20.8 million tourists in 2000 to 45.3 million at the end of the commission’s plan period in 2020. This number includes 34.4 million domestic tourists and 10.9 million international tourists mainly from the Arab countries. In order to accommodate this number, the Kingdom will be required to provide additional 50,000 hotel rooms and 74,000 furnished units by the year 2020.
Hence, an effort must be exerted for attracting investment from private sector for building hotels and resorts. In fact, the domestic tourism market of the Kingdom is untapped and there is a great potential in this sector. This potential is evident from the fact that Saudis spend SR54 billion ($14.4 billion) on travel annually, according to an SCT report. But, the Kingdom also earns revenues worth SR6.75 billion ($1.8 billion) from tourism, almost exclusively from religious tourism.
Prince Sultan revealed some interesting data recently while presenting a paper at a seminar titled “Economic Impact of Tourism in Saudi Arabia” held in the southern tourist resort of Abha.
“Saudi tourists spent over 100 million nights abroad in 4.4 million trips during year 2000 alone,” he said. “On an average, each night cost them $135, bringing the total spending to about $14.4 billion.”
He added that the number of tourists coming to the Kingdom soared remarkably in the last decade. It jumped from 2.582 million in 1992 to 4.8 million in 1999, registering an annual growth of between four and 23.3 percent. The Kingdom’s revenues from tourism increased from SR3.8 billion in 1992 to SR6.1 billion in 1999 and SR6.75 billion in 2002 with remarkable increase to be witnessed this year.
In fact, Saudi Arabia has taken effective steps to boost domestic tourism and reduce the deficit in the tourism balance of payment, which is now estimated at SR47.25 billion ($12.6 billion).
In addition to the establishment of an independent body to encourage domestic tourism, the Saudi government also started issuing tourist visas since 2001 allowing foreigners to visit historical places, museums and antiquities in Saudi Arabia. According to Prince Sultan, SCT has prepared the 20-year comprehensive tourism plan to ensure continuous development of the industry without reneging on the country’s culture, traditions and environment.
The tourism sector will be developed by providing conducive investment opportunities for the private sector, revising regulations, training Saudis to take up related jobs and making use of the media to encourage domestic travel. The SCT’s plan, Prince Sultan said, aims at diversifying the country’s revenue sources, increasing the gross domestic product and creating job opportunities. Promoting small-scale and alternative ventures and development of heritage and traditional industries are among other goals of the plan.
Prince Sultan underscored the government’s plan to make Saudi Arabia a leader in global tourism. This involves many incumbent tasks such as the assessment of the country’s tourism resources as well as the local market requirements, enforcement of new laws to ensure quality, training Saudi manpower and enacting new regulations to facilitate investment. The prince is of the opinion that the private sector could play an important role in promoting tourism in the country.
The private sector, in fact, can provide and build state-of-the-art tourist infrastructure facilities such as hotels, restaurants, shopping malls and recreation centers all over the Kingdom. The tourism commission expects that the Kingdom will be able to reduce Saudi spending on tourism abroad by a minimum of 10 percent and a maximum of 25 percent during the ongoing initial stages of the SCT plan’s execution period. The commission also estimates that the tourism industry’s contribution to the GDP will reach 7.3 percent and will account for 6.5 percent of the total employment opportunities in the country.
At present, a little over 12,500 people are employed in the hotel industry alone, and only seven percent of them are Saudis. The SCT strategy seeks substantial investment in the sector, which will create at least 164,000 jobs for Saudis. Domestic tourism will also generate business for hotels and furnished villas, and will consequently attract more capital into the real estate projects. Influx of foreign tourists may also lead to creation of private aviation companies and construction of new rail networks to ease movement within the Kingdom.
“Growth in tourism traffic will raise the income of communications sector by 20 percent, housing sector by 25 percent, trade 12 percent and restaurants 15 percent,” according to SCT’s figures. Recently released statistics also show that tourism contributes about 10 percent of the gross domestic product globally. Tourism is the largest contributor to the nonoil GDP in many countries. It also helps many governments to maintain their balance of payment position.
International turnover from tourism was estimated in the region of $476 billion annually for the last few years. In fact, tourism is a major source of employment worldwide. Statistics show that the tourist sector accommodates more than 192 million people, of whom 73 million are directly involved in the industry. The SCT statistics indicate that the employment opportunities in the sector are growing, compared with other sectors where opportunities may be receding. Tourism, the SCT report said, is not a new economic and social phenomenon in the Kingdom.
In fact, the tourism industry occupies an important position in Saudi Arabia. The total expenditure of tourists on tourism activities exceeds SR35 billion annually, which represents nearly 5.4 percent of GDP. Despite the seasonality of tourism in the Kingdom, tourism proved that it is capable of accommodating tourism flows. Presently, there are more than 95,000 hotel rooms (73.3 percent are in Makkah) in 850 hotels, more than 20,000 apartments and 40,000 rooms in 828 furnished apartments, in addition to 1,100 travel agents and tour operators.
The Kingdom is also well equipped with the appropriate infrastructure and utilities for tourism development. On the basis of the SCT plan, nearly 40 tourism development areas (TDA) have been identified all over the Kingdom. These areas include many significant tourism sites that might represent a great opportunity for tourism development in general and individual tourism projects in particular. These areas will be divided into tourism destinations. Strategic development plans have been made for each group of destinations, without neglecting the strong and important interrelation between these areas.
Development of the identified TDA will take place during the next 20 years as part of the four-phase strategy. This strategy encourages the development of potential areas. It also recommends the development of new areas such as coastlines and mountains. SCT has also signed an agreement with King Abdul Aziz City for Science and Technology (KACST) for making use of its satellite imagery and remote sensing capabilities for producing a tourism map. Besides, the commission has recently mapped out a new strategy to train Saudi nationals in a renewed move to cut reliance on foreign workers.
SCT, in fact, seeks to generate 2.3 million jobs for Saudis over the next 20 years in the travel sector. Referring to the future vision for tourism in the Kingdom, the SCT report said that this tourism body seeks to ensure proper utilization of the available and potential resources to attain economic benefits while giving due regard to the Kingdom’s values. Also, the future tourism vision aims to promote tourism projects in the Kingdom within the framework of the national development objectives, which call for economic diversification, achieving fair balanced developments and creation of job opportunities.
The tourism contribution in the Saudi GDP is expected to rise after execution of the tourism development plan. Thus, the sector may help in acceleration of economic growth, improve the balance of payment and all other aspects of economy in general including service sector and reducing the outbound tourism at the same time of increasing domestic tourism. The tourism sector is expected to be a major employer and absorb a large number of the increasing Saudis entering to the labor market.
The tourism development shall be a private sector driven industry as the case in several countries all over the world. Tourism development in the Kingdom shall lessen the outbound tourism from the Kingdom and the out flow of funds to foreign destinations. Also, this will lead to establishing the support industries in the Kingdom and creation of more job opportunities. In addition tourism development in the Kingdom will also require investment in human resources through provision of tourism education and training.
Moreover, the expansion of tourism industry will help in technology transfer used in this sector to the Kingdom. Also, tourism development shall decrease migration from the rural areas to the big cities and urban centers of the country. Implementation of the SCT’s recommendations regarding tourism education and training at the level of secondary, university and postgraduates studies may attract the Saudi work force to take up positions in tourism sector and other associated sectors.
On the other hand, tourism development would enhance economic links between the Kingdom and the other GCC states as the flow of tourists from these countries is forecasted to increase steadily. In the nine months window period allocated for Umrah, more than 2.5 million Muslims from about 170 countries come to the Kingdom for minor pilgrimage. On the security aspect of tourism, the SCT officials say that the Commission has been studying the experience of 17 countries around the world. These countries including Tunisia, Morocco, Malaysia, Australia etc have been doing well both in terms of tourism traffic and tourism security.
On the Gulf level also, the efforts are under way to promote tourism. The six-nation Gulf Cooperation Council (GCC) is working on a plan to issue a unified tourist visa for foreign tourists, a move which will greatly benefit the Kingdom at a time when the tourism industry is bouncing back globally and more so in the Middle East region after experiencing a turmoil by the tragic events of Sept. 11.
Saudi Arabia alone issued some 9,546 tourist visas last year to foreign tourists in a new move to promote domestic tourism. This is in addition to the Gulf nationals, who are seeking domestic trips as well as trips of short and medium-haul destinations inside the Gulf region and Middle East, while staying closer to home. Hence, it is right time to refocus on domestic and regional tourism.
A number of tourists from Japan, the United States, Germany, Spain and Britain have started visiting the Kingdom besides a growing number of Muslim pilgrims visiting the holy cities of Makkah and Madinah annually, said another report published recently. The Kingdom’s private sector has already spent some $6.6 billion to set up several tourism companies and a number of tourism projects in a new bid to attract foreign tourists.
This decision to facilitate the movement of Gulf nationals among the Gulf states also comes in line with GCC’s efforts to undertake measures to curb the influx of foreign labor in a campaign to ease their heavy reliance on expatriates and find jobs for their own citizens. According to the GCC Supreme Council’s decision, citizens of the GCC countries are to be allowed to move freely and employ themselves in any of the Gulf countries of their choice with no barriers on their movement.
The measures agreed also included provisions for training facilities for Gulf nationals and awareness campaign for private sectors to encourage them to take in more local employees. The Gulf States are also seriously considering replacing foreigners with native workers in strategic and sensitive jobs. The move will help to create a unified GCC job market because the multisectoral growth of the GCC region will provide numerous opportunities for a very large portion of the GCC’s 32 million population.