Developing aviation infrastructure key to achieving Vision 2030 goals: report

Developing aviation infrastructure key to achieving Vision 2030 goals: report
Saudi Arabia’s National Tourism Strategy aims to attract 100 million visitors by 2030 and increase the tourism sector’s contribution to the gross domestic product to more than 10 percent. (Reuters)
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Updated 28 May 2023
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Developing aviation infrastructure key to achieving Vision 2030 goals: report

Developing aviation infrastructure key to achieving Vision 2030 goals: report
  • Kingdom has the potential to become a gateway connecting Asia Pacific to Europe and America, says expert

RIYADH: The launch of the Kingdom’s strategic plans to become a global tourism and logistics hub has added a new impetus to its fast-evolving aviation industry, which can be bolstered by investing in innovative technologies, suggested a report issued by the King Abdullah Petroleum Studies and Research Center.

Speaking to Arab News, Abdulrahman Alwosheel, a research associate at the Riyadh-based center and co-author of the report, said due to its strategic geopolitical location, the Kingdom has all the potential to become a gateway connecting Asia Pacific to Europe and America, which will also help it achieve its tourism goals as envisaged in Vision 2030.

“There are several areas where Saudi Arabia can focus to enhance its aviation industry by improving infrastructure, increasing connectivity, investing in innovation and technology, developing a skilled workforce, and promoting tourism,” said Alwosheel. 

The researcher said following the decision to allow tourist visas the Kingdom has made incredible progress in the tourism sector. 

The KAPSARC report said advancement in the Kingdom’s aviation sector is key to achieving the goals outlines in Vision 2030. Saudi Arabia’s National Tourism Strategy aims to attract 100 million visitors by 2030 and increase the tourism sector’s contribution to the gross domestic product to more than 10 percent. 

On the other hand, Saudi Arabia’s National Logistics Strategy, launched by Crown Prince Mohammed bin Salman in 2021, aims to position the Kingdom as a global logistics hub connecting three continents and improve transportation services. The strategy also seeks to improve the capabilities of the Kingdom’s air cargo sector by doubling its capacity to more than 4.5 million tons by 2030. 

Alwosheel said further improvement in domestic transport could also play a crucial role in elevating the tourism sector in Saudi Arabia, which is already progressing steadily compared to its regional counterparts. 

 “Unlike the neighboring countries, such as Qatar, Bahrain, and the UAE, in which domestic transport needs are more limited, in Saudi Arabia, domestic transport can play a vital role in supporting growth by promoting and developing domestic tourism, including the development of aviation infrastructure and services,” he added. 

The researcher pointed out that strategic alliances and joint ventures involving air carriers, manufacturers, airports, and government agencies could enable the aviation industry to leverage individual assets and skills to achieve the Kingdom’s goals.

Sustainability and challenges

The report emphasized the importance of sustainability in the overall development process of the aviation sector in the Kingdom. The think tank said unexpected circumstances caused by the COVID-19 pandemic such as a drop in demand, disruption of the airline industry, and the resultant financial losses served as a wake-up call to promote sustainable pathways.

Alwosheel noted that the cost factor is one of the major challenges the aviation industry should address while propagating the use of sustainable aviation fuel. 

“SAF is more expensive than traditional fossil-based fuels, which can create a financial burden for airlines. However, with increasing demand and production, technological maturity, feedstock availability, and diversity, the cost of SAF is expected to decrease,” said Alwosheel. 

According to the International Air Transport Association, the production of sustainable aviation fuel is estimated to meet just 2 percent of the sector’s needs by 2025. 

SAF is produced in tiny quantities from feedstocks such as cooking oils and animal waste and costs two to five times more than traditional jet fuels.

Alwosheel added that SAF will become more cost competitive if governments, along with customers and suppliers of SAF and airports work together and devise ways to promote technological advancements in the fuel’s production. He also pointed out that integrating SAF production plants with existing oil and gas industries could help reduce capital costs. 

“SAF production must be aligned with the region’s conditions since the production of biofuels could be limited. However, integrating it with the existing industries (petrochemical) can help reduce capital costs in developing facilities dedicated to producing SAF by considering co-processing pathways,” the researcher said. 

He said another challenge for SAF uptake is the strict certification standards to ensure that it is sustainable and does not harm the environment. 

With continued investment in research and development, increasing facilities for production and availability, and developing a robust certification system, the aviation industry can successfully embrace SAF.

Abdulrahman Alwosheel, Research associate at King Abdullah Petroleum Studies and Research Center

“The development of a certification system that is universally recognized can be challenging. Consequently, with continued investment in research and development, increasing facilities for production and availability, and developing a robust certification system, the aviation industry can successfully embrace SAF,” said Alwosheel. 

The ‘Passenger Load Factor’

Passenger Load Factor is “the percentage of available seating capacity filled with passengers, regardless of the seating capacity designation made by the airline or the cabin layout.” 

According to the KAPSARC report, PLF is instrumental in assessing the profitability of airlines since it indicates that an airline has sold most of its available seats, which allows it to divide its costs among the total passengers carried. 

Andres Guzman, a fellow researcher at KAPSARC, said that Saudi Arabia’s PLF has significantly improved, highlighting the Kingdom’s growth in the aviation sector.

“In fact, the lower PLF dilutes the benefits that aircraft manufacturers have made in the last years in improving fuel efficiency by considering new technology engines when the performance of the aviation sector is expressed in terms of the number of passengers instead of (the number of ) seats available,” said Guzman. 

According to the researcher, making the aviation sector sustainable requires concerted efforts from all stakeholders including airline carriers, aircraft manufacturers, consumers, airports, and governments. 

Guzman said despite financial challenges, aircraft fleet renewal has considerably improved the performance of the aviation sector, as newer aircraft are more fuel efficient, and they offer improved safety and reduced maintenance costs. 

“As sustainability has become a global concern, governments and financiers could foster a smoother transition of fleet renewal programs by offering financial incentives in compliance with legislation on emissions reduction,” he said.


Newly launched company set sights on Saudi coastal city as first tourism project

Newly launched company set sights on Saudi coastal city as first tourism project
Updated 26 September 2023
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Newly launched company set sights on Saudi coastal city as first tourism project

Newly launched company set sights on Saudi coastal city as first tourism project

ABU DHABI: A Saudi coastal city will be the site of Baheej’s first project in its strategy to develop exciting tourist destinations as part of the Kingdom’s Vision 2030 plans.

The development company was launched on Tuesday by Asfar, a Saudi-based tourism investment firm, and a joint venture between AWN Enterprises and Tamimi Group.

Baheej will study each city in Saudi Arabia to identify gaps in a tourist’s itinerary, and speaking to Arab News on the sidelines of the Future Hospitality Summit in Abu Dhabi, one of the executives involved with the company gave more details of its future plans.

“We are extremely in the early stages. That will be the first asset that will be developed and up and running by, I would say, the beginning of 2027,” said Abdulrahman Al-Bassam, executive chairman of AWN Enterprises and a member of Baheej’s board of directors.

Without sharing further details about the project’s site, the executive confirmed that “it will be a coastal city.”

Al-Bassam said he hoped Baheej would help Saudi Arabia meet its economic diversification goals for tourism, which includes attracting 100 million local and international visitors annually by 2030.

Norah Al-Tamimi, who hails from one of the Kingdom’s most influential family businesses, has been appointed the acting chief executive.

Expanding on the remit of the new initiative, Al-Bassam said: “So if the gap is in, for example, accommodation, we provide accommodation. If the gap is in, let’s say, a visitor center or a beach retreat or you name it, that would be part of the project assets that we would like to develop in a certain city.”

Baheej is also focused on destination management, and will work hand-in-hand with local governments and authorities, as well as “a local tour operator who owns, say, a couple of horses to use in a touristic experience,” said the executive.

Al-Bassam noted that Asfar comes in “with its power as an investor, as well as a catalyst with regional players, be them regulators or service providers or affiliates and companies within the PIF conglomerate.”

Asfar was created by the Public Investment Fund earlier this year to support the Kingdom’s tourism strategy, which is a key part of Vision 2030.

Al-Bassam went on to state: “Whereas our alliance — Tamimi Group and AWN Enterprises — that’s the private partner within this partnership, comes in with their experience in contracting and in professional services as well as the hospitality, restaurants, and catering business.”

The company’s head noted that he views gaps in Saudi Arabia’s tourism as opportunities rather than problems, as this denotes room for improved tourism experiences.

“Each town in Saudi Arabia has its own uniqueness and we would like to tap into this,” he said.


Closing Bell – TASI grows 40 points; ADES Holding begins retail subscription 

Closing Bell – TASI grows 40 points; ADES Holding begins retail subscription 
Updated 26 September 2023
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Closing Bell – TASI grows 40 points; ADES Holding begins retail subscription 

Closing Bell – TASI grows 40 points; ADES Holding begins retail subscription 

RIYADH: Saudi Arabia’s Tadawul All Share Index concluded its trading on Tuesday at 10,918.24 points, rising 0.37 percent. 

Parallel market Nomu closed at 22,406.83, gaining 169.84 points, or 0.76 percent.   

MSCI Tadawul 30 Index edged up 2.83 points, or 0.2 percent, to 1,402.31.   

The primary index’s total turnover touched SR6.2 billion ($1.6 billion), as 93 stocks rose and 126 retreated. Conversely, Nomu recorded a trading turnover of SR86 million. 

Al Sagr Cooperative Insurance Co. was the topmost performer in TASI, soaring 7.86 percent to SR23.60.  

Additionally, Saudi Automotive Services Co. soared 7.77 percent to SR62.40. 

Another notable performer, Saudi Arabian Amiantit Co., jumped 6.27 percent to SR51.70.  

Abdulmohsen Alhokair Group for Tourism and Development and Aldrees Petroleum and Transport Services Co. climbed 5.56 percent and 5.27 percent to SR2.28 and SR139.80, respectively. 

On the flip side, Al-Baha Investment and Development Co. experienced the most significant drop, plunging 6.25 percent to SR0.15.  

Shares of Thimar Development Holding Co. and Saudi Real Estate Co. dipped 5.14 percent and 3.13 percent to SR26.75 and SR13.62, respectively. 

Sumou Real Estate Co. and First Milling Co. both slumped about 2.7 percent to finish at SR1.30 and SR2, respectively. 

On the announcement front, ADES Holding opened its doors for public subscription of 33.87 million shares, priced at SR13.50 each.   

This valuation pegged at a nominal value of SR1 per share was ascertained through a structured order book-building process. 

The subscription window, initiated by the company, will span three days, concluding on Sept. 28.   

This move follows the green light from the Financial Market Authority on June 21, granting the drilling services company permission to register and make available 338.72 million shares from its total capital pool. 


Saudi Arabia’s transformation turns it into a must-visit tourism destination

Saudi Arabia’s transformation turns it into a must-visit tourism destination
Updated 26 September 2023
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Saudi Arabia’s transformation turns it into a must-visit tourism destination

Saudi Arabia’s transformation turns it into a must-visit tourism destination

ABU DHABI: Tourists are expected to add Saudi Arabia to their “bucket list” due to the government’s transformation of the sector, according to industry veteran William Heinecke, founder and chairman of Minor Hotels. 

Speaking during a panel discussion on the second day of the Future Hospitality Summit in Abu Dhabi, Heinecke noted that Saudi Arabia is on the verge of significant change, predicting that the Kingdom will achieve in 10 years what it took Dubai 30 years to accomplish. 

The Kingdom is currently undergoing a remarkable tourism boom, with the sector expanding by 121 percent in 2022, positioning it as the fastest-growing destination in the G20 and surpassing the global average prior to COVID-19, as detailed in an annual report tracking the progress of Vision 2030.   

Data from the real estate consultancy firm Knight Frank revealed that, under Vision 2030, Saudi Arabia’s hotel industry is poised for further expansion, targeting a total of 310,000 hotel rooms by 2030, with an estimated investment of $110 billion. 

Heinecke expressed his admiration for Saudi Arabia’s visionary leader, who is young enough to see through ambitious initiatives. 

“You need someone not only who has the money, but you need someone who has the vision and the passion to stay with it,” he said.  

“When you look at what’s happening in Saudi Arabia, it’s incredible. It’s going to make so many new bucket lists for everybody in the world. And even what’s happened in the Middle East, Dubai, Doha, it's incredible,” Heinecke added.  

In another panel discussion, various factors and trends that are shaping the travel and tourism industry were deliberated. 

Gilda Perez-Alvarado, incoming group chief strategy officer at Accor, a leading hospitality company, highlighted subjects such as innovation, the impact of technology, and broader long-term trends that are affecting the entire ecosystem of travel and hospitality, including hotels.   

“The amount of change we’re witnessing now, which, by the way, was accelerated during the pandemic, is extremely exciting. So, if you ask me what one of the catalysts for change was, it was that,” Perez-Alvarado said during her panel. 

However, she added: “Our industry is still highly fragmented, so there’s plenty of room for growth." 

Perez-Alvarado emphasized that significant changes and developments are taking place in Saudi Arabia that were previously unimaginable. 

“One where you’re seeing things done that no one would have imagined could be done. In 2015, who would have thought that we would have witnessed the changes we’re seeing in Saudi Arabia?” she said. 

Perez-Alvarado concluded by emphasizing that the Middle East is the fastest-growing region, with Saudi Arabia’s Vision 2030 now becoming a reality, demonstrating that ambitious goals can be accomplished, showcasing the region’s ability to turn imaginative ideas into tangible achievements. 


UAE’s Yas, Saadiyat islands ‘great and safe’ investment destinations 

UAE’s Yas, Saadiyat islands ‘great and safe’ investment destinations 
Updated 26 September 2023
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UAE’s Yas, Saadiyat islands ‘great and safe’ investment destinations 

UAE’s Yas, Saadiyat islands ‘great and safe’ investment destinations 

ABU DHABI: The UAE’s Yas and Saadiyat islands have emerged as safe havens for investment thanks to the endeavors of the Abu Dhabi Department of Culture and Tourism in grooming them as luxury destinations, said the CEO of a real estate development firm.

Speaking to Arab News on the sidelines of the Future Hospitality Summit in Abu Dhabi on Tuesday, Miral Group CEO Mohamed Abdalla Al-Zaabi said both destinations continue to attract investments and tourists in line with the UAE’s vision of economic diversification.

“Abu Dhabi has been listed five times in a row as the safest city in the world. Investment here is very lucrative. Saadiyat and Yas islands are growing very fast,” Al-Zaabi said.

The top executive said: “In 2021, we added three hotels with 1,000 rooms, and now see 90 percent occupancy in summer.”

He said more rooms will be added to help boost the fast-growing tourism sector and ultimately aid the country’s economic diversification plans.   

Al-Zaabi said tourism will play a key role in economic diversification. He said the country wants to increase the sector’s contribution to the gross domestic product from 15 percent to 17 percent, which “is not easy to achieve.”

“Hotels will always be a key factor here in that pillar, and we at Miral are proud of what we have done so far. Only in 2021, we opened three hotels on Yas Island. We opened Hilton, DoubleTree and, of course, in collaboration with Warner Bros. Discovery, we opened the WB hotel in Abu Dhabi, which is the first Warner Bros. hotel in the world,” Al-Zaabi said.

He said the Warner Bros. achieved 90 percent occupancy last summer. I think summer now is no longer a low season here in Yas Island.   

“Since 2007, we have been developing Yas Island, introducing new facilities and attractions, and today we see that all coming together under one umbrella, one vision, integrated, and interconnected to provide a very unique and unforgettable experience for our customers,” he said.

Commenting on whether Yas Island can accommodate more, he said they have long been adding attractions, facilities, hotels, and rooms, and they now, with the other partners, are adding more properties, and homes on the islands.

Al-Zaabi also pointed out that they recently announced their environmental, social, and governance strategy focusing on eight areas.

“We have already implemented two great initiatives that I am personally very proud of. We signed an agreement with Emerge, a Masdar subsidiary, to install solar panels, that provide more than 7 megawatts of power to our theme park. And now recently we also did the same at SeaWorld Abu Dhabi, where we installed solar panels to supply almost 5 MW,” he said.

The CEO said they are busy with their Phenomena Abdu Dhabi project, in collaboration with the Japanese TeamLab.   

“We are also building the Natural History Museum. Both projects are the result of our collaboration with the Abu Dhabi Department of Culture and Tourism. We are also expanding Warner Bros theme park by adding a Harry Potter area, which would be a good expansion to enrich our customer experience on the island,” he said.


Saudi hospitality sector emerging as new global benchmark

Saudi hospitality sector emerging as new global benchmark
Updated 26 September 2023
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Saudi hospitality sector emerging as new global benchmark

Saudi hospitality sector emerging as new global benchmark

ABU DHABI: Saudi Arabia’s tourism and hospitality sector is in high gear to achieve industry targets set under Vision 2030, industry leaders said during a panel on Tuesday.

“No sector matches tourism in creating jobs, especially in rural areas and communities that are currently suffering from unemployment. One in every five jobs globally today is supported by tourism, so that’s tourism is such an important sector,” Badr Alherbish, chief strategy officer of Saudi Arabia’s Tourism Development Fund, said in one of the sessions of the three-day Future Hospitality Summit in Abu Dhabi.

One example of Saudi Arabia’s ambitious development push is the Rua Al Madinah project — a mega mixed-used real estate development to the east of the Prophet’s Mosque — which, according to Ahmed Al-Juhani, CEO of Rua Al Madinah Holding, required laser focus to work around logistical issues to deliver this massive project.

“(Since) the launch, the master plan and infrastructure work… there has been a lot of work done on the ground. We actually took over the land and we made all the detours around the urban development. We completed the design of 5,000 rooms, we signed a hotel management agreement with three companies for these rooms.”

The value of contracts and execution is now more than SR5.3 billion ($1.4 billion), Al-Juhani added, and the company will next month go to the market for the tender of the 5,000 rooms.

“We also have another 7,000 rooms under design right now and in the concept stage and also another 8,000 rooms when start design in November,” he said.

“We are talking about 20,000 rooms before the year ends at different stages: under design, under construction, or in the middle of the design.”

Meanwhile, the Boutique Group headed by Mark DeCocinis is renovating three historic palaces: Al-Hamra Palace which will offer 77 keys including 33 luxury palace suites and 44 luxury villas in Jeddah; Tuwaiq Palace which will provide 96 keys including 40 luxury palace suites and 56 luxury villas; and the Red Palace will offer 71 keys including 46 luxury suites, and 25 luxury guest rooms. Both Tuwaiq and Red Palace are located in Riyadh.

“We’re renovating and restoring these balances, which takes time and it takes a lot of love and attention to detail. Our guest profile, we target the very top of regional and international travelers… we want to provide that exceptional service and personalized service,” DeCocini told the panel.

“I believe Saudi hospitality will be the new benchmark in the world globally.”