Kingdom’s tourism and hospitality sector to draw huge investments

Updated 06 October 2014

Kingdom’s tourism and hospitality sector to draw huge investments

Forecasts indicate the possibility of a dramatic growth in investments worth over SR95 billion in the Saudi tourism sector, hotels and apartments during the next 10 years.
While Saudi nationals spend billions abroad during holidays, incoming foreign tourists, including pilgrims, contribute heavily to the growth of commercial business in the Kingdom.
Amid continuous improvement in the hospitality and related sectors in Saudi Arabia that also excelled in providing first class services to its guests in term of health services, security and some other relevant hospitality services the travel industry look very promising, according to a an economist.
He said that the volume of investments in the Saudi Tourism and Travel Market (STTM) during the current year stood at SR150 billion, of which SR50 billion will be generated from domestic tourism, and SR100 billion from inbound tourism including pilgrims.
Domestic tourism alone has seen remarkable growth recently, where volume of spending has surged from SR59 billion in 2010 to SR103 billion in 2014.
The sector plays the role of a catalyst for economic growth and is one of the most prominent sustainable investment opportunities.
Haj and Umrah are also two of the most important sources of revenue for the Kingdom’s economy.
The number of pilgrims since the start of umrah season this year until Ramadan has already reached seven million.
This rapid growth came as a result of world-class infrastructure, which has created the largest investment opportunities for growth in the services sector for pilgrims and business visitors.
The same source says that by the year 2025 the number of pilgrims is expected to reach 5.2 million while in 2013 it had already touched two million.
This increase depends on the growing infrastructure works of Jeddah airport, which is expected to reach 80 million people by 2035.
The ongoing expansion of the Grand Mosque toward the north-west and north-east will increase its capacity to 2.5 million people, while the expansion of the Prophet's Mosque in Al-Madinah will boost its capacity from 600,000 to 1.6 million people upon completion in 2040.


HP rejects Xerox takeover bid, says open to acquiring Xerox instead

Updated 18 November 2019

HP rejects Xerox takeover bid, says open to acquiring Xerox instead

  • In rejecting Xerox's $33.5 billion cash-and-stock acquisition offer, HP said the offer “significantly” undervalued the personal computer maker
  • Xerox made the offer for HP on Nov. 5 after resolving its dispute with its joint venture partner Fujifilm Holdings Corp.
NEW YORK: HP Inc. said on Sunday it was open to exploring a bid for US printer maker Xerox Corp. after rebuffing a $33.5 billion cash-and-stock acquisition offer from the latter as “significantly” undervaluing the personal computer maker.
Xerox made the offer for HP, a company more than three times its size, on Nov. 5, after it resolved a dispute with its joint venture partner Fujifilm Holdings Corp. that represented billions of dollars in potential liabilities.
Responding to Xerox’s offer on Sunday, HP said in a statement that it would saddle the combined company with “outsized debt” and was not in the best interest of its shareholders.
However, HP left the door open for a deal that would involve it becoming the acquirer of Xerox, stating that it recognized the potential benefits of consolidation.
“With substantive engagement from Xerox management and access to diligence information on Xerox, we believe that we can quickly evaluate the merits of a potential transaction,” HP said in its statement.
The move puts pressure on Xerox to open its books to HP. Xerox did not immediately respond on Sunday to a request for comment on whether it will engage with HP in negotiations as the potential acquisition target, rather than the acquirer.
HP on Sunday published Xerox CEO John Visentin’s Nov. 5 offer letter to HP, in which he stated that his company was “prepared to devote all necessary resources to finalize our due diligence on an accelerated basis.”
Activist investor Carl Icahn, who took over Xerox’s board last year together with fellow billionaire businessman Darwin Deason, said in an interview with the Wall Street Journal last week that he was not set on a particular structure for a deal with HP, as long as a combination is achieved. Icahn has also amassed a 4% stake in HP.
Xerox had offered HP shareholders $22 per share that included $17 in cash and 0.137 Xerox shares for each HP share, according to the Nov. 5 letter. The offer would have resulted in HP shareholders owning about 48% of the combined company. HP shares ended trading on Friday at $20.18.
Many analysts have said there is merit in the companies combining to better cope with a stagnating printing market, but some cited challenges to integration, given their different offerings and pricing models.
Xerox scrapped its $6.1 billion deal to merge with Fujifilm last year under pressure from Icahn and Deason.
Xerox announced earlier this month it would sell its 25% stake in the joint venture for $2.3 billion. Fujifilm also agreed to drop a lawsuit against Xerox, which it was pursuing following their failed merger.

Test for new HP CEO
In 2011 as the centerpiece of its unsuccessful pivot to software. Little over a year later, it wrote off $8.8 billion, $5 billion of which it put down to accounting improprieties, misrepresentation and disclosure failures.
More recently, HP has been struggling with its printer business segment recently, with the division’s third-quarter revenue dropping 5% on-year. It has announced a cost-saving program worth more than $1 billion that could result in its shedding about 16% of its workforce, or about 9,000 employees, over the next few years.
Xerox’s stock has rallied under Visentin, who took over last year as CEO. However, HP said on Sunday that a decline in Xerox’s revenue since June 2018 from $10.2 billion to $9.2 “raises significant questions” regarding the trajectory of Xerox’s business and future prospects.