Saudi tourism push realistic despite social restrictions

Saudi Arabia’s plans to enhance its tourism industry are realistic, despite the country’s social restrictions, analysts told Argaam.

Falling crude prices have triggered a wave of reforms and diversification measures in the oil-rich kingdom, including the planned development of the tourism sector. Under its Vision 2030 reform plan, the Saudi government plans to increase household spending on cultural and entertainment activities in the country from 2.9 to 6 percent.

The kingdom’s Commission for Tourism and National Heritage (SCTH) has also earmarked SAR 3 billion over the next five years to support the industry, state news agency SPA reported last week.

However, various social restrictions such as a strictly enforced dress code and gender segregation could deter many international visitors, who might prefer countries in the region with a more relaxed environment, analysts pointed out. 

“The high cost of entering Saudi Arabia will also not help,” said Cyril Widdershoven, geopolitical analyst and director at Dutch consultancy Verocy.

The kingdom’s tourism ambitions would be realistic if it focused on Muslim tourists and encouraged Hajj and Umrah visitors to prolong their stay and see more of the country, he added.

Others noted that Saudi Arabia was likely to concentrate on its domestic market under the tourism push, instead of seeking international tourists.

“Domestic tourism and attracting religious tourists to extend their stay are likely to be the initial priorities for Saudi Arabia’s push in the tourism industry,” said Allison Wood, consultant at Control Risks Middle East.

“Few if any changes are required to the visa process for these groups, and these demographics are more likely to be interested in Saudi Arabia as a ‘halal’ tourism environment. Travel enthusiasts, albeit a smaller and more exclusive group, are also likely to be intrigued by a country that has long been difficult to access,” she added.

Halal tourism in particular is seen to be a key growth driver for international hospitality industry players going forward, with many seeing room for growth in the Saudi hotel market. A record 68 new hotel projects and 29,033 rooms will be launched across major Saudi cities in 2017 alone, according to an industry report last month.

Among the brands eyeing Saudi expansion is hotel chain Hilton, which plans to introduce three new properties in the country this year in Makkah, Riyadh, and Al Khobar.

The new hotels will increase the company’s room stock in the kingdom by over 1,800, said Kamel Ajami, vice president – operations for Hilton in Saudi Arabia.

Despite Saudi Arabia’s various taboos, the country has many places worth visiting and could capitalize on its heritage sites and desert environment to attract tourists, said Theodore Karasik, senior advisor at Washington, DC-based geopolitical risk consultancy Gulf State Analytics.

“Travelers from throughout the Muslim world, as well as others who simply want to know more about the kingdom, will travel to Saudi Arabia. I think it is realistic for Saudi Arabia to become a tourist [destination] within the confines of Vision 2030.”

However, the underdeveloped infrastructure of many historical and natural sites in the country remains a challenge, Wood said. “Substantial investments will be required in accommodations, site, activities, roads, and other infrastructure.”

As far as social restrictions are concerned, analysts expect a greater degree of liberalization in coming years, given the ongoing economic reforms.

“There is a possible option of loosening the current restrictions,” Widdershoven said.

There is also some support in the kingdom for organizing concerts and opening cinemas and amusement parks, for instance. US theme park operator Six Flags announced last year that it would be expanding in Saudi Arabia, with the first park planned by 2020-21.

An important sign of change is the Saudi cabinet’s decision to revoke the power of the religious police to arrest people in April last year, Wood noted.

“Ultimately, though, such social changes will not be driven by a desire to increase tourism. It will instead be driven by the need to increase economic growth and, increasingly, [meet] the demands of Saudi citizens.” 

Write to Jerusha Sequeira at jerusha.s@argaamnews.com