How agile supply chains enable resilient tourism

Supply chains are sinews of the global economy, and in normal times, they’re easy to take for granted. Thanks to globalization, we’ve become accustomed to the availability of products shipped from the farthest corners of the earth.
But COVID-19 exposed and magnified the supply chain vulnerabilities of companies and countries alike.
The tourism industry was hit especially hard. Airline passenger traffic plunged 60 percent in 2020, the first year of the pandemic, according to the International Civil Aviation Organization. Hotel occupancy rates tumbled to 22 percent that year, data from the UN shows. Today marks the observation of UN Global Tourism Resilience Day, a reminder that resilience is vital – not only for successful tourism but for our overall economic health. Tourism accounted for one in every 10 jobs before COVID-19, and many of the world’s poorest countries depend on it for jobs and revenue. The UN designated Feb. 17 to highlight the importance of resilience in this critical industry.
COVID-19 had a negative impact on supply chains for 97 percent of all industrial businesses, according to a survey by financial services firm EY. Canned goods, tissue paper, and other consumer items disappeared from store shelves early in the pandemic.
Following this hard-learned lesson, many companies “reshored” their supply chains where possible to avoid relying on overseas suppliers. Many also invested in technology to monitor their supply chains more effectively for disruptions.
At Red Sea Global, we did both, and much more. Red Sea Global is building some of the world’s most spectacular resorts, here on the Kingdom’s western coast. Supplying them is comparable to supplying the diverse needs of an entire city. Our flagship destination, The Red Sea, is one of the original giga-projects. Already, more than 13,000 workers live there in a permanent community.
We recently opened our second hotel at The Red Sea, and 16 resorts will be up and running by the end of next year. In 2030, when completed, the destination will comprise 50 hotels, luxury residences, retail precincts,
and leisure and lifestyle offerings across an area the size of Belgium.
Further north along the coast is AMAALA, a sister destination and a hub for wellness, arts, and culture. Eight resorts will open at AMAALA by the end of next year, and an additional 21 thereafter.
The remote locations of both destinations compound the challenge of supplying all their needs, and doing so on time. We’re installing critical logistics infrastructure, such as multi-temperature distribution centers, as part of our intensive supply chain network.
Our guiding principle at both The Red Sea and AMAALA is regenerative tourism: We aim to enhance and regenerate our habitats and local communities, not just sustain them. This adds another twist to our supply chain.
But for us, resilience means never having to say “no” to a guest’s request. We must serve their needs frictionlessly.
Our key imperative is to be responsive. We anticipate and detect demand as soon as possible and use digital technologies to ensure that we satisfy that with timely deliveries. Some food items, like dairy products, have a predictable demand. Impulse items, such as North American lobsters, are different.
Therefore, responsiveness in our supply chain requires more than just fast trucks. We need to control the whole demand-to-delivery cycle and do so digitally.
Our enterprise resource planning software contains a gigantic catalog of items. We list at least 89 different elements of data for each item, from its expiration date to its stackability. All our logistics staff can draw on this data. And because our master file is usually integrated with a hotel’s own system, we receive an order as soon as the hotel knows it needs something.
We will supply a few hundred thousand items to The Red Sea alone. We use algorithms and a centralized data pool to decide when and how to consolidate and divide shipments. From strikes to tsunamis, there are always disruptions in supply chains. The trick is to analyze and make the best use of the data.
Because most goods arrive at, or are hubbed through, Jeddah, we have located a facility there to consolidate inbound shipments. We receive goods at this facility during the day, ship goods to our destinations at night, and deliver them before dawn. All our trucks are powered sustainably, with either electricity or biofuel. And to minimize the risk of non-delivery, we designate multiple vendors for many of our products.
Finally, we source items locally wherever possible. Currently, 20 percent of our supplies are grown or manufactured within the Kingdom – for example, salad vegetables, mangoes, citrus fruit, and coffee. We work closely with the farmers’ cooperative Tamala, which Red Sea Global co-founded, to help maximize our local sourcing of fresh produce. We also work with local manufacturers of non-food items, so the Saudi-made share of goods in our supply chain is constantly increasing.
No supply chain is completely immune to disruption. External shocks, from conflicts to climate events, will inevitably intrude. But the Supply Chain & Logistics Team at Red Sea Global has combined its collective expertise to forge a resilient and agile supply chain that will meet the needs of its guests, residents, employees, and partners.
A well-managed supply chain will enable resilient tourism. Our Red Sea Global Team is committed to saying “yes” to our valued guests and helping both people and planet.

• Michael Stockdale is Head of Supply Chain and Logistics at Red Sea Global Group.