Coral Bloom: The reciprocal value of tourism
With the recent announcement of the Coral Bloom project, Saudi Arabia has taken another active step toward its goal of becoming one of the most aspirational tourist destinations on the globe.
As a part of the Red Sea Project, which includes 50 resorts across 22 islands in total, the Coral Bloom resort will reside on Shurayah Island off the Kingdom’s western coast. It will feature 11 hotels, multiple beaches, lagoons, golf courses, marinas, and other luxury experiences, with a soft opening of the first four hotels slated for 2022.
It is clear that tourism brings benefits to an economy, but understanding the details of how it could potentially impact the local community is more complex. As a business and investment adviser, I have seen how investing in tourism has the potential to benefit all parties involved, community included.
From a national level, tourism is a direct injection into the gross economy. Using Dubai as an example, tourism contributed AED161 billion ($44 billion) to the national GDP in 2019, and pandemic notwithstanding, that number is expected to increase by 3.9 percent annually to make up a total of 10.6 percent of the GDP by 2027. This and the statistics of many other countries with newly developed tourist economies are an indication of how tourism contributes to the long-term strengthening of economies.
In addition, with travel come new, global consumers who inherently bring new demands to a region, creating new economies altogether. Intrinsically, new demand spurs economic diversification and development on a local level as they arise. It encourages market diversity, experimentation, and customization of on-site products and services without the need for high overhead costs.
It is also an opportunity to solidify the preservation of cultural and environmental assets, which are most often the original source of attraction for global travelers. The Red Sea Project’s approach to sustainable development is a great example of how the Kingdom is protecting one of its greatest assets. Foster + Partners’ approach to building The Coral Bloom, for example, exclusively utilizes renewable energy, lightweight, low impact materials. Foster + Partners has also committed to preserve and even enhance the natural environment for its inhabitants.
But what might hamper the long-term benefits of tourism to an economy? Given the often-delicate balance between an international consumer audience and a local ecosystem, it is essential to ensure that the relationship has a strong foundation and is reciprocal. Just as how sustainability measures should nurture the land, the tourism industry should nurture the local economy. Because tourism allows for product and service consumption right at the site of production, it is a critical opportunity for locals to benefit directly — both on a small and large scale. After all, money that makes its way into the hands of the local economy is money that makes its way into the greater economy. If this does not happen, economic stimulation remains surface level, which can eventually pose a threat to long-term economic fortitude.
Thus far, Coral Bloom appears to have its eye on the immediate community, citing local job generation as one of the direct benefits of the project. In addition, addressing a diverse audience that includes regional tourists such as Umrah and Hajj pilgrims, is a solid strategy. And lastly, the Kingdom’s aim to “increase participation of small and medium-sized enterprises in the economy” as well as the introduction of new initiatives on human rights training programs are also promising factors. I am looking forward to seeing what Coral Bloom will bring to its local community and the region as a whole within the coming years.
• Carla DiBello is a documentarian and founder and CEO of CDB Advisory, a bespoke consulting firm that bridges connections across private sectors throughout the Middle East and North America.