Complex Made Simple

Saudi’s tourism sector ‘cruising’ right along

Saudi is gearing up to become a major touristic destination. The latest cruise deal for winter 2021, in time for the first Formula One event in the country, bolstered the kingdom's chances as a hot spot

The Kingdom prepares to host the inaugural Formula 1 Saudi Arabian Grand Prix 2021 on Dec. 5 in Jeddah Opening to tourism is one of the ways Saudi Arabia intends to diversify the economy away from oil Amaala’s new international airport is under construction and will be a gateway to the west coast of Saudi

Saudi is gearing up to become a major touristic destination. The latest cruise deal for winter 2021, in time for the first Formula One event in the country, bolstered the kingdom’s chances as a hot spot.

Cruise Saudi, a 100% Public Investment Fund-owned business that seeks to develop Saudi Arabia’s cruise industry, and MSC Cruises have announced the launch of Red Sea cruises in the coming winter 2021-2022 season.

Fawaz Farooqui, Managing Director of Cruise Saudi, and Pierfrancesco Vago, Executive Chairman of MSC Cruises, signed a landmark framework agreement in the Saudi capital city Riyadh to mark the beginning of the new partnership.

Under the terms of the agreement, the MSC Magnifica will homeport in Jeddah. 

Operating seven-day Red Sea cruises from November 2021 to March 2022, the vessel will visit a selection of ports and destinations in the region and three Saudi ports including weekly calls to the port of AlWajh, the gateway to the UNESCO World Heritage site of AlUla.

As the Kingdom prepares to host the inaugural Formula 1 Saudi Arabian Grand Prix 2021 on Dec. 5 in Jeddah, the Magnifica guests will have the chance to follow this global sports event during their trip aboard the Magnifica.

In addition to the Magnifica’s Red Sea sailings, MSC Cruises’ flagship Virtuosa will see her winter 2021 program in the Arabian Gulf enriched with calls in the port of Dammam, visiting AlAhsa oasis, another UNESCO World Heritage site.

The Virtuosa will call at this new exciting destination every week from December 2021 to March 2022.

The two companies expect a total of up to 170,000 guests to explore Saudi Arabia’s historical, cultural and natural treasures on board the two MSC Cruises ships during the upcoming winter 2021-2022 season.  

Cruise Saudi seeks to create 50,000 jobs in the cruise industry in Saudi Arabia by 2035.

Read: Healthy competition for business supremacy between Saudi and the UAE heating up

Read: Saudi’s private sector companies to cut dividends and help fund $1.3 trn in local investments

Sightseeing the Red Sea

The Red Sea Development Co.’s $3.7 billion loan is set to close with a small group of local banks including Saudi National Bank, Banque Saudi Fransi, Riyad Bank, and Saudi British Bank, according to people familiar with the matter.

Opening to tourism is one of the ways Saudi Arabia intends to diversify the economy away from oil. Its other ambitious projects include an entertainment hub near the capital and a new city in the northwest called Neom that’s expected to cost $500 bn to build.

Owned by the kingdom’s sovereign wealth fund, the Red Sea Development will oversee a luxury tourism zone equivalent in size to Belgium. When the entire project is completed in 2030, it will target 1 million visitors a year, split evenly between domestic and international tourists.

The Amaala project moving forward

Amaala comprises a 100-kilometer coastline and is set inside the Crown Prince Mohammed bin Salman Natural Reserve. It is nestled between the Red Sea Project and NEOM.

Amaala’s new international airport is under construction and will be a gateway to the west coast of Saudi Arabia directly linking Europe with a single stop to anywhere in the world.

The airport is due for completion in 2023 and is expected to cater to 1 million travelers per year.

David Watkins, chief project delivery officer at Amaala said at a recent event that “Amaala is one of the Kingdom’s amazing giga projects and the unique expression of the Saudi Vision 2030 centered around transforming the economy with tourism and entertainment taking prominence.” 

Watkins said that “Amaala, will be the anchor destination for ultra-luxury tourism and the key driver for diversifying the economy.”

Watkins said construction will start soon on one of the two villages that will provide more than 40,000 accommodation units for the anticipated workforce.

Saudi tourism officials are working on a plan to localize 100,000 jobs in the sector before the end of this year, as part of the Kingdom’s 2030 vision.
 It is part of a wider target of one million jobs in the sector by 2030.

Saudi inbound tourism

Inbound tourism spending in Saudi is expected to reach $25.3 bn by 2025, recovering from the impact of the coronavirus disease (COVID-19) pandemic, according to new estimates by market research firm Euromonitor International.

“World inbound tourism spending collapsed by 57% in 2020, and our forecast expects it to rebound by 82% in 2021,” Caroline Bremner, head of travel and tourism research at Euromonitor International, said in a press statement.

“In our most pessimistic scenario, spending growth is predicted to rise by 40% in 2021, leading to a more prolonged recovery timeline, returning to pre-crisis levels by 2024,” said Bremner.

The Saudi Ministry of Tourism announced last September that domestic tourism saw a significant rise in traveler numbers, surpassing official projections.

During the 2021 Budget Forum in December, Saudi Arabia’s Minister of Tourism Ahmed Al-Khateeb said the Kingdom is aiming to attract new tourism investments worth $58 bn by 2023, and more than $135 bn by the end of the decade. 

In 2019, Saudi travelers spent $22 bn traveling overseas. One of the ways the ministry is aiming to boost the Kingdom’s tourism revenues is to encourage Saudis to spend some of their tourism cash at home.