Saudi Arabia reveals massive push to drive pilgrim tourism

Saudi Arabia's Public Investment Fund is establishing two new companies to increase the number of pilgrimsthat the kingdom can host. (REUTERS)
Updated 03 October 2017

Saudi Arabia reveals massive push to drive pilgrim tourism

LONDON: Saudi Arabia's sovereign wealth fund is establishing two new companies to increase the number of pilgrims that the Kingdom can host in Makkah and Medina, the fund said in a statement on Monday.
The investment at the holy sites is aimed at boosting revenues from tourism and offsetting the impact of lower oil prices.
The Kingdom's Public Investment Fund (PIF) said the companies — Rou'a Al Haram and Rou'a Al Madinah — will develop residential and commercial areas around the Grand Mosque in Makkah and in Medina.
Initial preparation works are currently underway for both companies, with construction due to start in 2018. The first phase of the project is anticipated to launch in 2023.
The fund said that the new companies would help the Kingdom accommodate between 25 million to 30 million pilgrims a year. The companies will develop 150,000 hotel rooms in both cities near the holy sites.
Rou’a Al Haram aims to develop the areas around the Grand Mosque in Makkah and raise the quality of services in the local hospitality sector. The first phase of the company’s projects will cover an area of 854,000 square meters, delivering 115 buildings of various architectural designs. The company's first phase will also see the development of around 9,000 residential units, 360,000 square meters of commercial space and prayer areas for over 400,000 worshippers. The project is located around 1.4 kilometers from the Holy Kaaba, the fund said.
Rou’a Al Madinah – a company dedicated to increasing capacity for pilgrims and visitors to the Prophet’s Mosque – will develop a 1.3 million square meter site located about one kilometer from the east wing of the Prophet’s Mosque. The project will see the development of 500 new housing units, 80,000 hotel rooms, and increase the number of prayer areas to accommodate 200,000 worshippers per day.
Rou’a Al Madinah also aims to create a comprehensive system for pedestrian passages and update public transport stations.
The fund said the combined projects are set to generate around 200,000 job opportunities, with an estimated annual contribution to GDP of SR7 billion.
Tourism is a major focus of the Kingdom’s ambitious Vision 2030 economic diversification plan, which was unveiled in 2016.
The Kingdom’s National Transformation Program has earmarked approximately $8 billion for tourism projects across the country, including its recently announced Red Sea project, which aims to transform 50 islands for luxury tourism purposes.
The latest Saudi Commission for Tourism figures show that around 245,000 Saudis work in the tourism sector. The target is to boost that to 352,000 by 2020 and to see investment in tourism upped by $8 billion to reach nearly $46 billion.
Wes Schwalje, COO of Middle East consulting firm Tahseen Consulting, told Arab News, he expects Rou’a Al Madinah to bring a significant level of “international cache” to the Kingdom’s tourism development and promotion efforts.
He said: “It will be key to forming strategic partnerships with world-class partners to further develop medical tourism, build family-friendly world-class resorts and attractions, and build adventure and ecotourism offerings.
“Right now travel and tourism accounts for approximately 10 percent of GDP. Saudi Arabia is pursuing a two-track strategy to grow the sector by prolonging the stays of inbound international tourists and promoting more domestic tourism.”
Schwalje said, in the short term, domestic tourism is experiencing significant growth due to the Saudi Commission for Tourism and National Heritage’s efforts to enhance domestic awareness programs of cultural heritage sites, support local artisans, and strengthen educational programs to build national identity. “All of these efforts are designed to provide more economic opportunities for Saudis and build thriving local economies in secondary cities,” he said.
On Sunday, Virgin Group founder Sir Richard Branson announced he planned to invest in Saudi Arabia’s Red Sea project.
Branson is the first international investor to commit to the project, Saudi Arabia’s information ministry said, in what officials called “a clear sign that Saudi Arabia is opening its doors to international tourism.”
The Saudi Public Investment Fund will provide the initial investment into the Red Sea project, with construction slated to start in 2019.


Singapore Airlines drops ‘flights to nowhere’ after outcry

Updated 29 September 2020

Singapore Airlines drops ‘flights to nowhere’ after outcry

  • Several carriers have been offering short flights that start and end at the same airport to raise cash

SINGAPORE: Singapore Airlines said Tuesday it had scrapped plans for “flights to nowhere” aimed at boosting its coronavirus-hit finances after an outcry over the environmental impact.
With the aviation industry in deep crisis, several carriers – including in Australia, Japan and Taiwan – have been offering short flights that start and end at the same airport to raise cash.
They are designed for travel-starved people keen to fly at a time of virus-related restrictions, and have proved surprisingly popular.
But Singapore’s flag carrier – which has grounded nearly all its planes and cut thousands of jobs – said it had ditched the idea following a review.
The carrier has come up with alternative ideas to raise revenue, including offering customers tours of aircraft and offering them the chance to dine inside an Airbus A380, the world’s biggest commercial airliner.
Environmental activists had voiced opposition to Singapore Airlines launching “flights to nowhere,” with group SG Climate Rally saying they would encourage “carbon-intensive travel for no good reason.”
“We believe air travel has always caused environmental harm, and it is now an opportune moment for us to think seriously about transitions instead of yearning to return to a destructive status quo.”
The airline said earlier this month it was cutting about 4,300 jobs, or 20 percent of its workforce, the latest carrier to make massive layoffs.
The International Air Transport Association estimates that airlines operating in the Asia-Pacific region stand to lose a combined $27.8 billion this year.
The group also forecasts that global air traffic is unlikely to return to pre-coronavirus levels until at least 2024.