AHIC 2010 participants to discuss growth opportunities in the Kingdom of Saudi Arabia

The Kingdom of Saudi Arabia is placing an increasing focus on developing its tourism market, in a targeted and structured manner, as it seeks to diversify away from oil. There is significant investment being undertaken in tourism infrastructure, including airport expansions and high-speed rail lines, as well as government financed training programmes and public-private partnerships, whilst visa procedures have been eased for non-religious and business visitors.

Furthermore, being home to two of Islam's holiest cities, Al Madinah and Makkah, which attracts millions of Muslims each year for hajj, the world's largest annual pilgrimage, the hotel market is underpinned by Islamic tourism. There is also a high rate of domestic tourism, and the government has put in place initiatives to increase the number of Saudi's that holiday within the Kingdom.

This focus means that, according to a recent report by Business Monitor International, tourist arrivals to the Kingdom are forecast to grow by 5% year on year to 12.91 million in 2010, having remained steady in 2009, at just over 12 million. Year on year, arrivals per annum is expected to average 6.5% growth through to the end of 2014.

A report in March 2009 by the World Travel & Tourism Council, forecast that in 2009 the travel and tourism sector was expected to generate $27.2bn of economic activity, equivalent to 7.2% of total Gross Domestic Product, and this is set to rise to 9.2% ($78.4bn) by 2019. Direct industry employment was expected to rise from 7.3% of total employment in the Kingdom in 2009 to 9.4%, equating to around 922,000 jobs, by 2019.

The potential is illustrated by government plans, announced in February 2010, to build a $13bn 'tourist city' in Al-Oqair, just south of Al-Khobar on the Kingdom's eastern coast, and on the Red Sea coast, the government has identified sites for development in Tabuk, Yanbu, Makkah, Asir and Jizan provinces. The SCTA has stated that the planned Red Sea resorts would lead to a total of 557,000 hotel rooms being brought online, creating 413,000 jobs in the process.

A number of major international brands are already expanding their presence in Saudi Arabia. The Rezidor Hotel Group has already opened six hotels in the Kingdom, in Jeddah, Riyadh, Yanbu, Al Madinah and Al Khobar, totalling over 1,323 rooms, and has a further four hotels, with over 1,000 combined rooms, under development, across three different locations.

Kurt Ritter, President and CEO of The Rezidor Hotel Group, commented:

"Saudi Arabia is a hugely important market for us, and in 2009 we were delighted to open a further two developments in the country. The key aspect for us is the diversity of the market, allowing us to introduce different brands into the Kingdom, which include Radisson Blu and Park Inn at the moment, with a particular focus on serving religious and cultural visitors. I have no doubt that the opportunities will keep growing, which is why we have a number of additional hotels in the pipeline."

One of the world's largest hotel companies, Wyndham Hotel Group, is also expanding its presence in the region. In November 2009, the Hotel Group signed an agreement for the first Wyndham branded hotel in the Middle East, the Wyndham Riyadh located in Saudi Arabia. That property will join the company's growing portfolio of 28 hotels already operational in the Middle East, including Ramada Worldwide's largest hotel, the 998-room hotel in the holy city of Makkah.

Eric Danziger, President and CEO of Wyndham Hotel Group, commented: "The Middle East plays a significant role in Wyndham Hotel Group's global growth strategy. We are so pleased to already have a significant presence in the Kingdom of Saudi Arabia and numerous properties throughout the region. We have focused our efforts in the market and in the last year we announced some of our newest developments including the 299-room Ramada Plaza Kuwait hotel and the 183-room Ramada Hotel and Suites Amman hotel. We also celebrated the signing of an agreement for the Ramada Encore Doha hotel, a first in the Middle East for the brand".

Jonathan Worsley, Chairman of Bench Events which co-organises AHIC, commented: "The hotel investment market in Saudi Arabia is extremely exciting, with a need for quality product, ranging from high-end luxury resorts to mid-market and budget hotel developments. The government is working hard to put in place measured tourism expansion plans, but it is important that investors understand what opportunities are there and how they are accessed, and our line-up of speakers will be able to offer significant insight on that front. "

The Saudi Commission for Tourism and Antiquities (SCTA), the national authority responsible for the planning and development of domestic tourism, is also leading government efforts to promote more inbound travel, and will be represented at AHIC by Dr Salah K AlBukkayet, Vice President - Investment.