OPEC and its allies begin two days of meetings on Wednesday to decide whether to release more oil into the market or restrain supply amid big gyrations in crude prices and uncertainty about the impact of the Omicron coronavirus variant on energy demand.
Oil prices fell to near $70 a barrel on Tuesday, after hitting a three-year high above $86 in October, posting their biggest monthly decline in November since the start of the pandemic, as the new variant raised fears of a glut.
In November, Brent fell by 16.4 percent, while US crude fell 20.8 percent, the biggest monthly fall since March 2020.
Both contracts rebounded sharply on Wednesday, gaining about 5 percent.
Iraqi oil minister Ihsan Abdul Jabbar said he expected the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to extend existing output policy in the short term, the state news agency reported.
OPEC+ ministers, including those from the group’s biggest producers Russia and Saudi Arabia, have said there was no need for a knee-jerk reaction to amend policy.
Since August, the group has been adding an additional 400,000 barrels per day of output to global supply, as it gradually winds down record cuts agreed in 2020, when demand cratered because of the pandemic.
Algerian energy minister Mohamed Arkab said on Tuesday that OPEC+ would supply the global market with enough oil but urged caution about the impact of the Omicron variant, Algerian state news agency APS reported.
“The threat to oil demand is genuine,” said Louise Dickson, senior oil markets analyst at Rystad Energy. “Another wave of lockdowns could result in up to 3 million bpd of oil demand lost in the first quarter of 2022.”
But Goldman Sachs said the oil price slide in recent days had been excessive, with the market now pricing in a 7 million bpd hit to demand.
Adding pressure to prices, Federal Reserve Chair Jerome Powell said the US central bank was likely to discuss speeding up its reduction of bond purchases amid a strong economy and expectations that a surge in inflation would persist.
OPEC meets on Wednesday at 1300 GMT. That meeting will be followed on Thursday by a gathering of the wider OPEC+ group.
A delegate from the OPEC+ alliance said Wednesday’s OPEC meeting “should be straightforward.”
But some analysts have suggested OPEC+ might put its plans to add 400,000 bpd to supply in January on hold.
Even before concerns about Omicron emerged, the group had been weighing the effects of last week’s announcement by the United States and other countries to release emergency crude reserves to temper energy prices.
OPEC+ has been gradually scaling back last year’s record output cuts of 10 million bpd, equivalent to about 10 percent of global supply. About 3.8 million bpd of cuts are still in place.
But OPEC’s November oil output has again undershot the level planned, as some OPEC producers have struggled to hike output, a Reuters survey found, after years of low investment and amid global pressures to reduce fossil fuel use.
Three more join impressive list of Red Sea resort operators
Ritz-Carlton Reserve, Miraval and Rosewood sign deals with The Red Sea Development Company
Updated 25 May 2022
RIYADH: Three new hotel management agreements were inked with international hotel brands to operate resorts in the first phase of development at the Red Sea destination, The Red Sea Development Co. confirmed on Tuesday.
The announcement was made at the Future Hospitality Summit in Riyadh.
These hotels include Ritz-Carlton Reserve and Miraval hotels — the first to operate in the Middle East — and Rosewood, a global luxury hospitality company.
“This announcement demonstrates industry confidence in The Red Sea Project, with a total of 12 hospitality brands now confirmed, and signifies a growing appetite from global leaders to participate in the expansion of the Saudi tourism market. With two brands now entering the region for the first time, I believe the future of tourism in the Kingdom is bright,” said John Pagano, CEO at TRSDC.
Ritz-Carlton Reserve is situated at the destination’s idyllic Ummahat Islands, while Miraval and Rosewood are located on Shura Island, the main hub for the resort. The new collection of hospitality brands collectively features nearly 500 hotel keys of the total 3,000 planned for Phase 1.
“Together with our collection of globally recognized and respected partners, we are excited to play our part in opening up this unique and undiscovered part of the world, setting new benchmarks for sustainable development along the way,” Pagano said.
A top executive from Marriott International also shared his thoughts with Arab News about the new deal.
“Nujuma, a Ritz-Carlton Reserve will offer a highly personalized leisure experience that blends intuitive and heartfelt service with stunning natural beauty and indigenous design. The resort will be surrounded by unspoiled natural beauty and designed to blend seamlessly with the environment,” Jerome Briet, chief development officer, Europe, Middle East & Africa, Marriott International told Arab News.
He added: “We will work closely together with The Red Sea team to promote the overall destination, as well as Nujuma, which will be a destination in itself. This is also where the strength of Marriott’s distribution system, our channels and partners will play a key role. When it opens, the resort will also have access to a network of over 160 million members as part of our loyalty program, Marriott Bonvoy, which Ritz-Carlton Reserve recently joined.”
For his part, Ludwig Bouldoukian, regional vice president, development, Middle East and Africa at Hyatt Hotels Corporation, talked about the promising future of Saudi Arabia’s Red Sea.
“Miraval The Red Sea will join Grand Hyatt The Red Sea as the second Hyatt hotel slated to open within the first phase of the Red Sea Development Project. It is a great source of pride for Hyatt to play such a central role in this project and be able to collaborate with owners who share our values and ambitions. We look forward to introducing guests to experience a new standard of luxury and wellness, synonymous to the Miraval brand, where the focus is on mindfulness and creating balance. We have great confidence in the success of this property that will be a unique addition to The Red Sea Project,” Bouldoukian told Arab News.
We will work closely together with The Red Sea team to promote the overall destination.
Jerome Briet, Marriott International
He added: “Saudi Arabia has become a thriving hub for global business, arts and culture, and pioneering hospitality experiences. This ever-evolving destination continues to represent an important growth market for Hyatt, reinforcing our continued commitment to intentional growth in places that matter most to guests, members, customers and owners.” He went on to say that as Hyatt continues to grow within the Kingdom, the company remains grounded in its purpose — to care for people so they can be their best.
“This promise is reflected in the elevated guest experience that will await guests to Miraval when the resort opens,” Bouldoukian said.
He stressed that with its untapped natural beauty, The Red Sea Project is the perfect location to bring the Miraval brand to the global stage.
Saudi Arabia has become a thriving hub for global business, arts and culture, and pioneering hospitality experiences.
Ludwig Bouldoukian, Hyatt Hotels Corporation
“This is the brand’s first property outside of the US. Expected to boast the largest spa and wellness facilities within The Red Sea Project, the property will usher in a new era of wellness tourism to the Kingdom; a sector that has already demonstrated great potential within the Middle East and is set to grow exponentially in the coming years,” he explained.
Bouldoukian added that Miraval The Red Sea will introduce the wellness brand’s signature mindfulness-based wellness practices to a new corner of the world, empowering guests with tools and inspiration to find balance and support their emotional and mental wellbeing.
“The Life in Balance Spa, which is expected to be the largest within the Red Sea destination, will be the heart of the property encompassing nearly 40,000 square feet (3,700 square meters) and 39 treatment rooms,” he informed.
The posh hotel companies join a line-up of globally renowned brands that have already confirmed they will operate at the Red Sea, including: EDITION Hotels and St Regis Hotels & Resorts, part of Marriott International; Fairmont Hotel & Resorts; Raffles Hotels & Resorts and SLS Hotels & Residences, part of global hospitality group Accor; Grand Hyatt, part of Hyatt Hotels Corporation; InterContinental Hotels & Resorts and Six Senses, part of IHG Hotels & Resorts; and Jumeirah Hotels & Resorts.
The statement explained that The Red Sea has already passed significant milestones and work is on track to welcome the first guests in early 2023 when the first hotels will open. Phase one, which includes 16 hotels in total, will complete by the end of 2023.
Upon completion in 2030, the project will comprise 50 resorts, offering up to 8,000 hotel rooms and more than 1,000 residential properties across 22 islands and six inland sites. The destination will also include an international airport, luxury marinas, golf courses, entertainment, and leisure facilities.
Big projects need to open doors for SMEs to drive tourism, says official
Saudi Arabia’s Tourism Development Fund offers ‘financial and non-financial support to startups’
Updated 25 May 2022
Widad Taleb & Nirmal Narayanan
RIYADH: Prominent Saudi projects aimed at elevating tourism in the country will need to integrate with small and medium enterprises, said a senior official of Saudi Arabia’s Tourism Development Fund.
“We believe that even our big projects will need a lot of integration with SMEs to activate the entertainment, food and beverages sector,” Wahdan Al-Kadi, the chief business officer at TDF, told Arab News on the sidelines of the Future Hospitality Summit in Riyadh.
The two-day event held under the theme “Reimagined Horizons” discussed the future of hotel development, destination impact, aviation, sustainability, restaurant investment and human capital.
It featured a series of sessions covering topics such as the future of hotel asset management, the future of loyalty schemes, transparency and brand loyalty.
During the interview, Al-Kadi said that the TDF provides financial and non-financial support to startups and SMEs in the nation.
“We have financial support and non-financial support. We have a business app that offers to coach SMEs to run their businesses,” said Al-Kadi.
He further added: “There is financial support as well. We have 10 different products for SMEs that offer startup loans, working capital, asset financing, and many other products to support them.”
Tourism’s impact on GDP
Al-Kadi noted that the revenue from non-oil sectors is crucial for Saudi Arabia’s economy.
“There is a lot of focus on diversifying the economy through industries such as tourism, which can contribute to the gross domestic product and generate jobs. The idea is to raise the contribution of tourism to GDP from 3 percent to 10 percent and add another 1 million jobs directly and indirectly to the industry by 2030,” he added.
Al-Kadi added that the TDF is also doing its part to attract investors to the country.
“We have a one-stop-shop that helps local and international investors get the right data on the destinations we are promoting, besides supporting them with project-related licenses and permits and assisting them in getting lands.
We also do review feasibility studies,” he said.
Saudi Arabia has become a tourist destination for regional and international visitors and the Kingdom’s tourism sector is accelerating the pace for the future by announcing several programs and initiatives.
Saudi tourism offers geographical and historical diversity, highlighting natural resources, archaeological treasures and historical places that meet the aspirations of tourists.
Prior to the COVID-19 pandemic, 450,000 tourist visas were issued, since the Kingdom’s Tourism Authority launched the tourist visa program in 2019, by targeting 49 countries in the initial stage, and facilitated access to tourist visas electronically or through entry points to the Kingdom within specific regulatory controls.
The authority has prepared programs to attract tourism, and has been activating tourism investment and the role of the private sector. The authority has also participated in local and international tourism exhibitions and has managed marketing destinations, sites, itineraries, products and tourist packages internally and externally.
Radisson Hotel Group set to launch Mansard Riyadh in the next 2 weeks
The company currently operates 25 hotels with 20 more under development in the Kingdom and plans to reach 80 hotels by 2026
Updated 25 May 2022
Widad Taleb & Nour El Shaeri
RIYADH: Radisson Hotel Group is opening its second flagship hotel under its luxury brand Radisson Collection Mansard Riyadh.
Elie Milky, the company’s vice president of business development in the Middle East, Pakistan, Cyprus and Greece, told Arab News at the Future Hospitality Summit that Mansard Riyadh will open in the next two weeks.
“Radisson Collection is our premium brand. We launched it with Nofa Riyadh a few years ago. It’s a flagship for us. It grows our resort and luxury portfolios in the Kingdom,” said Milky.
Located on Prince Mohammed bin Salman Road, Mansard Riyadh will have 140 guestrooms, 27 serviced apartments and 24 three-bedroom villas.
“It’s one of our best properties globally, not only in Saudi Arabia,” said Milky.
The company is also planning to become carbon negative in the next few years and increase its human capital by opening an office in Saudi Arabia.
The company currently operates 25 hotels with 20 more under development in the Kingdom and plans to reach 80 hotels by 2026.
Milky added that the company currently generates $150 million in revenue from its hotels and expects to reach $300 million by 2026.
“The whole of Saudi Arabia has only 150,000 hotel rooms today. We need to add 450,000 to 500,000 rooms in Saudi Arabia by 2030,” Milky added.
Red Sea Project, AMAALA to be tourist destinations for all seasons
Updated 25 May 2022
Fahad Abuljadayel & Nirmal Narayanan
RIYADH: The Red Sea Project and AMAALA will be year-round tourist destinations once it is ready, putting Saudi Arabia on the global tourism map, said a top official of The Red Sea Development Co. and AMAALA.
“Summer, winter, spring or autumn, you name it; it will be a year-round destination,” said Ahmad Darwish, chief administrative officer at TRSDC and AMAALA, in an interview with Arab News on the sidelines of the Future Hospitality Summit.
He noted that the diversity offered by the Red Sea Project is impeccable and will make visitors stay for long.
“It’s the 90 islands, 200-kilometer coastline, dunes, mountains and volcano, all in one destination. In Red Sea Project, you are not just sitting on an island like the Maldives. Instead, you have other activities like excursions. It will increase your stay, and tourists will also have repeated visits,” he said.
During the interview, Darwish said that TRSDC and AMAALA are now spearheading a journey beginning from sustainability to reaching regenerative tourism.
“We’re moving away from sustainability to regenerative tourism. It’s not just keeping things as it is. It’s improving the situation. We’re trying to do better things for the environment and habitats,” said Darwish.
He added: “It’s a combination of things that we will do to increase our positive impact on the region. It will increase our credibility further and bring additional partners, both international and local.”
Enhancing customer experience
Darwish revealed that both the Red Sea Project and AMAALA are wisely using technology to enhance the customer experience.
“These smart services intend to have a seamless journey for the customer. We’re also partnering with several other partners in the technology sector to improve the customer journey,” he said.
Saudis, Emiratis stress Kingdom’s rise creates more opportunities for region
Participating in WEF panel on ‘Saudi outlook,’ Kingdom’s Investment Minister Khalid Al-Falih said ‘a rising tide lifts all boats’
Chairman of Dubai-based Damac Hussain Sajwani says KSA, UAE ‘completing each other in terms of growth, not competing with each other’
Updated 26 May 2022
TAREK ALI AHMAD
DAVOS: Over the past decade, Saudi Arabia and other Gulf countries have been steadily diversifying their economies away from oil, offering incentives to attract capital and talent, encouraging small businesses and start-ups, and trying to give their young citizens exciting new career paths in the private sector.
As the largest economy in the Middle East, with ties to both China and the US, Saudi Arabia is well-positioned to use its strategic relationships and hydrocarbon resources to stabilize volatile energy markets and advance economic recovery. Predictably, the Kingdom’s priorities and its response to today’s turbulent geopolitical context are in the limelight as it continues with its reform agenda.
The pace of economic diversification by the Kingdom has quickened greatly since the unveiling of Saudi Vision 2030 in 2016 by (then Deputy) Crown Prince Mohammed bin Salman. The accent is now on business growth, tourism, education, manufacturing, entertainment, health care and other sectors.
This has given rise to speculation among economic analysts as to whether the development can be a win-win for Saudi Arabia and the other Gulf countries, particularly the UAE. The question was put to the speakers in a panel discussion entitled “Saudi outlook” on Wednesday at the World Economic Forum’s annual meeting in Davos.
Offering to answer the question first, Saudi Minister of Finance Mohammed Al-Jadaan said: “When a country like Saudi Arabia moves, others up their game. We are seeing that in action today. So, it is in the interest of the whole region and not only Saudi Arabia.”
Al-Jadaan’s view was echoed by the other speakers, starting with Khalid Al-Falih, the Saudi minister of investment, who said: “A rising tide lifts all boats. Regional integration is more important to the smaller but very important economies next to us than it is to Saudi Arabia.
“So, I believe the Kingdom’s rise in its economic and competitive performance actually helps their competitiveness. It allows companies and enterprises and the governments of those countries to integrate with the larger global economy in Saudi Arabia.”
Speaking from the perspective of the Saudi Ministry of Tourism, Haifa bint Mohammed Al-Saud, assistant minister for strategy and executive affairs, said: “Competition is critical. We create competition within Saudi Arabia for different destinations because what it does is increase quality. And it’s very healthy because they start complementing each other.”
More broadly, she said: “The region in its entirety is a hub, so once you arrive in the region, it becomes more appealing to visit different destinations. So, (competition is) absolutely to our benefit.”
Faisal Al-Ibrahim, Saudi minister of economy and planning, said: “For me, competition and competitiveness are essential for us to raise the bar higher. But collaboration is also necessary.
“There is a lot of coordination and collaboration that happens behind the scenes. There is a lot of camaraderie between policymakers within the region that gives us these assurances.”
Last year, Saudi Arabia set certain rules for companies seeking to take advantage of the $3 trillion investment opportunities identified for international investors under the Vision 2030 strategy. The government said it would no longer sign contracts with foreign companies without a regional headquarters inside the Kingdom starting from 2024.
The new arrangement is thought to have aroused a sense of competition between Saudi Arabia and the UAE. Talk of unspoken economic rivalry has continued to make global headlines as both announce aggressive initiatives to attract or deploy investment.
However, Hussain Sajwani, chairman of Damac, the Dubai-based Emirati property development company, thinks Saudi Arabia and Dubai are completing each other in terms of growth, rather than competing with each other.
“I think they completing each other in two different economies, two different outlooks,” he told Arab News on the sidelines of the Davos summit on Tuesday.
“Dubai is a connecting point for businesses for travelers, tourism, Saudi Arabia is very different. So Dubai companies help and complete the growth of Saudi Arabia,” he said.
Similar sentiments have been expressed by other Emirati businessmen and government ministers over the past year, with the general consensus being that the two GCC members are independently adjusting their social and economic policies as part of their economic diversification strategies.
In comments to Arab News last November, Badr Al-Olama, an executive director at Abu Dhabi sovereign fund Mubadala, dismissed the idea that Saudi Arabia and UAE’s economic progress is a zero-sum game.
“What many people try to interpret as competition is completely wrong because the market is so large,” he said. “The fact that we are close neighbors means we are able to complement each other with certain capabilities to compete on a global scale.”
In an interview with Arab News in December, Khalifa Shaheen Al-Marar, UAE minister of state, said that the two countries have adopted policies that benefit the entire Arab region and contribute to better outcomes for global peace and human welfare.
“The UAE and Saudi Arabia maintain a close and complementary relationship that benefits the two countries and the wider region, which includes economic and developmental integration,” he said.
“We believe that healthy economic competition in the region is important, and the UAE always views it as an opportunity to generate new prospects and adopt policies that benefit the region as a whole.
“Our two countries’ economic partnership is one based on open exchange and cooperation. The Saudi-Emirati Coordination Council, a high-level bilateral mechanism established to harmonize Saudi Vision 2030 and UAE Vision 2021, continues to play an important role in inking additional economic agreements and streamlining trade between our two countries.”