World’s tourism industry is on way to hit pre-pandemic level of $10tn, WTTC head says

Exclusive World’s tourism industry is on way to hit pre-pandemic level of $10tn, WTTC head says
Julia Simpson, president and CEO of the World Travel and Tourism Council, spoke to Arab News on the sidelines of the Future Investment Initiative in Riyadh. (AN Photo)
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Updated 27 October 2022
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World’s tourism industry is on way to hit pre-pandemic level of $10tn, WTTC head says

World’s tourism industry is on way to hit pre-pandemic level of $10tn, WTTC head says
  • The global aviation forecast looked similarly positive as travel rates are expected to see rapid growth in the next 10 years
  • Business travel, however, will recover at a slower rate

RIYADH: The travel industry, which was worth $9.6 trillion before the COVID-19 pandemic, was cut in half during the pandemic. By next year, however, it is expected to climb to $10 trillion, a leading industry figure said.

Speaking to Arab News, Julia Simpson, president and CEO of the World Travel and Tourism Council, said that the industry’s numbers in 2023 are showing positives signs already.

“While the global (gross domestic product) is looking to rise at 2.7 percent annually, travel and tourism will be growing at double that rate,” said Simpson, noting that the aviation industry has returned to normalcy in 2022 after the decline of COVID-19.

Business travel, however, will recover at a slower rate.

“It has already started coming back, but if you look at places like China that are still closed and Japan that has only recently opened, we will see that business travel will come back fully more like in 2024,” Simpson said.

Saudi emergence

Saudi Arabia’s massive investment in mega projects, including the $500 billion NEOM City and AlUla, would contribute to positioning the Kingdom as a major travel and tourism destination. 

The Kingdom’s travel industry will witness significant growth and is projected to add $100 billion to the economy by 2032, as it continues to boost tourism investments, she said.

“All the investment that the Saudi government is making in developing what is a really beautiful country and opening up for travel and tourism is bearing fruit,” said Simpson on the sidelines of the Future Investment Initiative (FII) in Riyadh.

The Kingdom’s efforts are bringing the “immense amounts of cultural heritage in locations like AlUla” and “places in Saudi Arabia that are rich with history and biodiversity” to the forefront, noted Simpson.

The global aviation forecast looked similarly positive as travel rates are expected to see rapid growth in the next 10 years.

She denied reports of an expected global downturn in the aviation industry.  

“Currently, we aren’t seeing (a decline) in any of the travel and tourism numbers. In fact, at the moment, the demand is outstripping supply, and also, we have very high employment levels. Sometimes they are so high that we find it hard to recruit people.”

She pointed to the emergence of new post-pandemic travel trends, which have been propelling the hospitality sector to grow and adjust to new models.

“We are seeing digital nomads, where people are combining home, work and travelling at the same time. So, you are seeing the classical division between holiday and workplace blurring slightly. That’s a whole new model, and a lot of hotels are adjusting to meet that new challenge,” she added.

The three-day FII gathered more than 6,000 participants – from policymakers, investors, entrepreneurs to young leaders – for discussions on topics ranging from geoeconomics to gaming.


Oil Updates – prices rise as supply concerns outweigh demand fears

Oil Updates – prices rise as supply concerns outweigh demand fears
Updated 22 September 2023
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Oil Updates – prices rise as supply concerns outweigh demand fears

Oil Updates – prices rise as supply concerns outweigh demand fears

TOKYO: Oil prices rose on Friday as concerns that a Russian ban on fuel exports could tighten global supply outweighed fears that further US interest rate hikes could dent demand, but they were still headed for their first weekly loss in four weeks, according to Reuters.

Brent futures climbed 50 cents, or 0.5 percent, to $93.80 a barrel by 6:50 a.m. Saudi time, while US West Texas Intermediate crude futures gained 63 cents, or 0.7 percent, to $90.26 a barrel.

Both benchmarks were on track for a small weekly drop after gaining more than 10 percent in the previous three weeks amid concerns about tight global supply as the Organization of the Petroleum Exporting Countries and its allies maintain production cuts.

“Trading remained choppy amid a tug-of-war between supply fears that were reinforced by a Russian ban on fuel exports and worries over slower demand due to tighter monetary policies in the United States and Europe,” said Toshitaka Tazawa, an analyst at Fujitomi Securities Co. Ltd.

“Going forward, investors will focus on whether the OPEC+ production cuts are being implemented as promised and whether the rise in interest rates will reduce demand,” he said, predicting WTI to trade in a range of around $90-$95.

Russia temporarily banned exports of gasoline and diesel to all countries outside a circle of four ex-Soviet states with immediate effect to stabilize the domestic fuel market, the government said on Thursday.

The shortfall, which will force Russia’s fuel buyers to shop elsewhere, caused heating oil futures to rise by nearly 5 percent on Thursday.

“Crude oil bounced off a session low after Russia banned diesel exports, which included gasoline. The action reversed a downside movement in crude markets following the hawkish Fed decision on Thursday,” said Tina Teng, an analyst at CMC Markets, in a note.

“However, mounting fears of a recession in the Eurozone could continue pressuring oil prices.”

The US Federal Reserve on Wednesday maintained interest rates, but stiffened its hawkish stance, projecting a quarter-percentage-point increase to 5.50-5.75 percent by year-end.

That buoyed fears that higher rates could dampen economic growth and fuel demand while boosting the US dollar to its highest since early March, making oil and other commodities more expensive for buyers using other currencies.

The Bank of England mirrored the Fed and held interest rates on Thursday after a long run of hikes, but said it was not taking a recent fall in inflation for granted.

A European Central Bank governing council member said the central bank will most likely keep interest rates stable at its next policy meeting. 


Pakistan seeks $6 billion for corporate farming from Saudi Arabia, other Gulf nations by 2028

Pakistan seeks $6 billion for corporate farming from Saudi Arabia, other Gulf nations by 2028
Updated 22 September 2023
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Pakistan seeks $6 billion for corporate farming from Saudi Arabia, other Gulf nations by 2028

Pakistan seeks $6 billion for corporate farming from Saudi Arabia, other Gulf nations by 2028
  • Arab News speaks exclusively to CEO of FonGrow, spearheading agriculture projects under new investment body
  • Pakistan in talks with Saudi companies like Al-Dahara, Saleh and Al-Khorayef for investment in corporate farming

ISLAMABAD: Pakistan is seeking up to $6 billion investment from Saudi Arabia, the United Arab Emirates (UAE), Qatar and Bahrain over the next three to five years for corporate farming, with the aim of cultivating 1.5 million acres of previously unfarmed land and mechanizing existing 50 million acres of agricultural lands across the country, the CEO of the company spearheading the initiative has said.

The development comes months after Pakistan set up a Special Investment Facilitation Council (SIFC) — a civil-military hybrid forum — to attract foreign funding in agriculture, mining, information technology, defense production and energy as the South Asian country deals with a balance of payments crisis and requires billions of dollars in foreign exchange to finance its trade deficit and repay its international debts in the current financial year.

Earlier this month, caretaker Prime Minister Anwaar-ul-Haq Kakar said Saudi Arabia and the UAE would invest up to $25 billion each in Pakistan over the next five years in the mining, agriculture and information technology sectors.

Initiatives in the agriculture sector under SIFC are being administered by FonGrow, which is part of the Fauji Foundation investment group run by former Pakistani military officers.

“We have estimated about $5-6 billion [investment from Gulf nations] for initial three to five years,” Major General (retired) Tahir Aslam, FonGrow’s managing-director and chief executive officer, told Arab News in an interview. 

He declined to share details about the breakdown of the investment from each individual country.

The CEO said the company was engaging with several Saudi companies like Al-Dahara, Saleh and Al-Khorayef to attract investment in the corporate farming sector. He did on elaborate on progress made so far in the discussions. 

Aslam said his company was also working on different investment models with the Saudi and UAE companies for corporate farming, including joint ventures.

“If they want to make direct investment, it is a corporate model. So, they will take an equal number of stakes in the company, and they get an equal number of positions in the governance [of the company]. So, it is going to be a joint company.”

About strategy and targets to mechanize farming, Aslam said FonGrow was working on a two-pronged approach to bring up to 1.5 million acres of new arable land under cultivation and modernize 50 plus million acres of land already being farmed.

This, he said, would require about “$25 million per each thousand acres and other for machinery, and setting up of infrastructure for value addition.”

FonGrow is aiming to set up corporate farms on over 100,000 acres in the next 5-7 years. The first such farm had already been established on over 5,000 acres of land in Khanewal, he said. 

“Next year, we will be starting our second farm on over 10,000 acres and we hope to develop the capacity to be able to develop 20 to 25 thousand acres every year,” Aslam said. “Mainly, we are starting in Punjab and then we are looking for lands. Wherever we get suitable lands, we will go to all the provinces.”

To a question about the source of capital to develop the land, the official said: “We have no issue of rupee capital availability for our project because ultimately it will bring returns to Fauji Foundation.”

“There is a small challenge that we are facing basically, which is of foreign exchange because the irrigation systems and the tractors and harvesters that we have to import, they need foreign exchange.”

Aslam said Pakistan’s corporate farming model envisioned that sixty percent of the crops would contribute to the country’s food security, and the remaining 40 percent would be exported mainly to Gulf countries to earn foreign exchange. 

He said Pakistan had received a first export order of Fauji cereal products from a Gulf nation, though he declined to name the country:

“It is a starting quantum [that] is about $25 million worth of products in one year. But I think as we break more grounds this will continue to increase in the coming years.” 

Responding to concerns about the army’s involvement in economic projects in Pakistan, he said the military was only contributing where requested by the civilian government.

“They [foreign countries] wanted an organization which provides continuity or security of their investment, that was the reason the army joined in and then the army also said we have such a large [investment] potential available,” the FonGrow CEO said.

“In the past also, the army has very willingly contributed to projects of nation-building and national importance … Army is playing its part, but no soldiers are involved.”


Saudi Arabia elected ISO council member for two years

Saudi Arabia elected ISO council member for two years
Updated 21 September 2023
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Saudi Arabia elected ISO council member for two years

Saudi Arabia elected ISO council member for two years

RIYADH: In recognition of its efforts to implement health and safety standards, Saudi Arabia has been elected as a member of the council of the International Organization for Standardization, the Saudi Press Agency reported.

The Kingdom will maintain the position for a two-year period starting 2024, it said.

This was announced during ISO’s 45th general assembly meeting held in Brisbane in Australia.

The Saudi Standards, Metrology, and Quality Organization, known as SASO, represented the Kingdom at the recent ISO meetings.

SASO is committed to the ongoing enhancement and revision of Saudi standards and technical regulations, with its efforts aimed at safeguarding the nation’s markets against counterfeit, substandard, and deceptive products, ultimately bolstering the national economy. 

Meanwhile, ISO, which came into existence in 1947, is an independent, nongovernmental international organization with 169 members.


Red Sea International Airport becomes operational

Red Sea International Airport becomes operational
Updated 21 September 2023
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Red Sea International Airport becomes operational

Red Sea International Airport becomes operational

RIYADH: The Red Sea International Airport became operational with the touchdown of the first Saudia flight early on Thursday, according to the Red Sea Global. 

In a statement, the multi-project developer behind the world’s most ambitious regenerative tourism destinations, The Red Sea and AMAALA, said that the flights from King Khalid International Airport in Riyadh will arrive every Thursday and Saturday, connecting the two destinations in less than two hours. 

It added that a flight would return to the capital on the same day. “We promised to make TRS a place where people from all around the world would come to experience the best of Saudi culture, hospitality, and nature. Now, with the first flight touching down at RSIA, and our first resorts receiving bookings, Saudi Arabia’s position on the global tourism map is all but secured,” said John Pagano, group CEO of Red Sea Global. 

From today, the statement added, the flights depart Riyadh every Thursday at 10:50 a.m. before flying back to the capital after 165 minutes. It added that the other flight departs from Riyadh every Saturday at 12:50 p.m., with the return flight at 15:35 p.m. from the Red Sea airport. 

Positioned within an eight-hour flight from 85 percent of the world’s population, the airport will grow to welcome international flights from next year as additional phase one resorts open their doors. 

According to the statement, RSIA is operated by daa International, which has supported RSG with design validation and commissioning of RSIA since 2020. 

“With the arrival of RSIA’s first commercial flight, daa International’s operational responsibility commences,” it added 

In its press release, RSG also revealed the new brand for RSIA with visitors to see the brand expressed across multiple touchpoints, from the airport terminal and staff uniforms to the electric mobility vehicles that will transport passengers from air to land side. 

“RSIA is the gateway to TRS destination. It is the first impression visitors have, and their parting memory when they leave. The brand echoes the qualities of the five-star hospitality guests will enjoy across the destination,” Pagano added. 

The brand icon is a representation of the RSIA’s unique architecture. The company noted that the iconic shape is inspired by the bird’s eye view of the airport’s exterior. “It has been created to express the creativity, novelty, and sophistication of the brand in a way that is contemporary and distinct.” 

RSG further stated that it has made great progress across other infrastructure works to ensure TRS is ready to welcome visitors and meet its promises for responsible development and regenerative tourism. 


Sole Pakistani company at Foodex expo eyes joint ventures

Sole Pakistani company at Foodex expo eyes joint ventures
Updated 21 September 2023
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Sole Pakistani company at Foodex expo eyes joint ventures

Sole Pakistani company at Foodex expo eyes joint ventures

ISLAMABAD: A Pakistani food company participating in the 10th edition of Saudi Arabia’s leading international food exhibition, Foodex Saudi, has praised the Kingdom’s market, saying over a dozen Saudi companies had expressed interest in forming joint ventures and distributing its products.

The 10th edition of Foodex Saudi, the Kingdom’s leading international exhibition for food and beverages, was held from September 17-20 at the Riyadh International Convention and Exhibition Center and featured over 500 exhibitors from 75 countries, offering an array of food and drinks to Saudi buyers from the distribution, retail, manufacturing and hospitality sectors.

Dashi International, a Karachi-based food company that sells ready-to-cook and ready-to-eat food products, was among the 500 exhibitors at the event.

“Dashi International is the only Pakistani company participating in this edition of the Foodex Saudi exhibition,” Fawaz Khalil Allahwala, the company’s chief executive officer, told Arab News over the phone from Riyadh.

“It was a great opportunity to showcase our product as the Saudi market is certainly growing and we found a dozen leads from interested companies from the Kingdom,” Allahwala said.

He said some Saudi companies had sought joint ventures with Dashi International while others were interested in a distribution partnership with the Pakistani company. He declined to name the Saudi companies. 

Allahwala said he experienced a lot of “enthusiasm and optimism” at the exhibition where visitors explored various food items with the aim of seeking new business opportunities.

He said the response was “encouraging and positive.”

“The Saudi market seemed very receptive and growing so we are very hopeful of progress,” Allahwala added.

Hamzah Gilani, the spokesperson of the Pakistani consulate in Jeddah, said the exhibition played a “crucial role” in advancing and diversifying Saudi Arabia’s thriving food and drinks industry.

“This success [of Dashi] should encourage more Pakistani companies to seize such opportunities and expand their involvement in the international market,” Gilani told Arab News, saying Foodex provided Saudi buyers with an “unprecedented opportunity” to discover a diverse range of global food and beverage products.

“This esteemed gathering facilitated extensive networking opportunities,” Gilani said, “and showcased latest industry innovations.”