Saudi tourism set to accelerate as ban on women driving lifted

Saudi Arabia is building a raft of new tourism sites, which will complement existing attractions such as the Riyadh National Museum, pictured. (AP)
Updated 30 September 2017

Saudi tourism set to accelerate as ban on women driving lifted

LONDON: Saudi Arabia’s decision to allow women behind the wheel has laid the foundations for a growth spurt in the Kingdom’s tourism sector, analysts forecast.
The country has the ambitious target to attract 1.5 million visitors by 2020 as the country reduces its dependence on oil.
Apart from pilgrimages, Saudi Arabia attracts relatively few international tourists, with the sector dominated by the domestic market. But with tourism earmarked to become a major driver of growth, the Kingdom is looking to widen its appeal.
“Ending the ban on women driving will help to change Saudi Arabia’s image around the world, and will make both men and women more likely to travel to Saudi Arabia,” said Jane Kinninmont, a senior research fellow and deputy head of the Middle East and North Africa program at the Chatham House think-tank in London.
“Previously (the driving ban) was one of the best-known facts about Saudi Arabia and was seen as a symbol of the oppression of women — so much so that many people didn’t realize Saudi women could study, work and do many other things,” Kinninmont said.
The move to allow women to drive comes as part of a program of reforms designed to curb restrictions and facilitate female access to employment, with the aim to raise the level of women’s participation in the labor force to 30 percent from 22 percent.
Crispin Hawes, managing director for the Middle East and North Africa at advisory firm Teneo Intelligence, said that while much remains to be done to develop the Kingdom’s tourism sector to appeal to the global market, lifting the ban on women driving represents “a significant step forward.”
“In the past five years the issue of women driving has taken on a life of its own and frequently comes top in external perceptions of the Kingdom. What the Saudi (government) has done is neuter that issue, which of itself is an important visual gesture,” he said.
“It’s part of a longer-term process that will make Saudi more attractive to people who might consider spending money and time visiting the country, but this is one element in a multi-stage journey.”
The decision also bodes well for domestic tourism, which stands to benefit from the increased mobility of Saudi families. “One implication is that households will no longer have to pay out for drivers, giving them more disposable income, which could be used for trips,” said Jason Tuvey, Middle East economist at Capital Economics.
Women will also be able to carry out their share of driving errands, freeing up family leisure time which could be used for domestic tourism purposes.
Tourism currently accounts for around 2.5 percent of Saudi Arabia’s gross domestic product (GDP) compared to the vast 50 percent contribution generated by the oil and gas sector, according to the World Travel and Tourism Council (WTTC). Plans to increase investment in tourism from $8 billion to almost $46 billion by 2020 will see a significant shake-up of the industry, as a series of high-profile projects get underway, according to the WTTC.
These include the ambitious Red Sea resort development, which will transform a 200 km stretch of coastline into a luxury tourism destination complete with an airport, seaport, hotels, residences and transport infrastructure.
The project, which is set to create 35,000 jobs and add SR15 billion ($4 billion) to the Saudi economy, will target foreign visitors with relaxed rules within a specified tourism zone.
According to Saudi Arabia’s Public Investment Fund (PIF), which will finance the initial stages of the project, “It will set new standards for sustainable development and bring about the next generation of luxury travel to put Saudi Arabia on the international tourism map.”
Last week PIF announced the launch of the Entertainment Investment Company with SR10 billion to support development of the sector and encourage Saudis to spend their leisure money at home rather than seeking amusement abroad.
“The Saudi Arabian government has been a great example to the travel and tourism public sector in prioritizing tourism growth in the country in order to generate further economic wealth and jobs as the country diversifies their income streams,” said Gloria Guevara, WTTC president and CEO, in a recent statement.
Another major project in the pipeline will include a Six Flags theme park, safari and recreational facilities as part of a 334 square kilometer city south of Riyadh.

Lee’s death sparks hope for Samsung shake-up, dividends

Updated 26 October 2020

Lee’s death sparks hope for Samsung shake-up, dividends

  • Shares in the company and affiliates rise; around $9bn in tax estimated for stockholdings alone

SEOUL: Shares in Samsung Electronics Co. Ltd. and affiliates rose on Monday after the death a day earlier of Chairman Lee Kun-hee sparked hopes for stake sales, higher dividends and long-awaited restructuring, analysts said.

Investors are betting that the imperatives of maintaining Lee family control and paying inheritance tax — estimated at about 10 trillion won ($8.9 billion) for listed stockholdings alone — will be the catalyst for change, although analysts are divided on what form that change will take.

Shares in Samsung C&T and Samsung Life Insurance closed up 13.5 percent at a two-month high and 3.8 percent, respectively, while shares in Samsung SDS also rose. Samsung Electronics — the jewel in the group’s crown — finished 0.3 percent higher.

Son and heir apparent Jay Y. Lee has a 17.3 percent stake in Samsung C&T, the de facto holding firm, while the late Lee was the top shareholder of Samsung Life with 20.76 percent stake.

“The inheritance tax is outrageous, so family members might have no choice but to sell stakes in some non-core firms” such as Samsung Life, said NH Investment Securities analyst Kim Dong-yang.

“It may be likely for Samsung C&T to consider increasing dividends for the family to cover such a high inheritance tax,” KB Securities analyst Jeong Dong-ik said. Lee, 78, died on Sunday, six years after he was hospitalized due to heart attack in 2014. Since then, Samsung carried out a flurry of stake sales and restructuring to streamline the sprawling conglomerate and cement the junior Lee’s control.

Investors have long anticipated a further shake-up in the event of Lee’s death, hoping for gains from restructuring to strengthen de facto holding company Samsung C&T’s control of Samsung Electronics, such as Samsung C&T buying an affiliate’s stake in the tech giant.

“At this point, it is difficult to expect when Samsung Group will kick off with a restructuring process as Jay Y. Lee is still facing trials, making it difficult for the group’s management to begin organizational changes,” Jeong said.

Lee is in two trials for suspected accounting fraud and stock price manipulation, as well as for his role in a bribery scandal that triggered the impeachment of former South Korean President Park Geun-hye. The second trial resumed hearings on Monday.

Lee did not attend the trial on Monday, as Samsung executives joined other business and political leaders for the second day of funeral services for his father.