Saudi Tourism Set for a Boost

In an effort to boost its tourism industry Saudi Arabia is planning to open its doors to visitors outside the realm of religious tourism which has so far consisted only of Muslim pilgrims performing hajj.

Major projects have been given the go-ahead and construction on many has begun with tourism numbers expected to reach 88 million by 2020.

However, Dr Eckart Woertz, programme manager of economics, at the Gulf Research Centre is skeptical that Saudi Arabia will receive the majority of tourists from abroad and believes the locals will be encouraged to spend their holidays in Saudi rather than abroad.

“Saudi Arabia’s plans to develop tourism are very ambitious, as it hopes to create up to two million jobs in this sector until 2020,” Dr Woertz told Alrroya.com.

“The focus thereby lies on domestic tourism, not so much on international tourism.

“They want to entice Saudis to seek recreation at home instead of traveling abroad.”

Religious Tourism

Woertz also stressed the potential of religious tourists extending their stays to become regular tourists visiting cities which means have big potential.

“If religiously motivated tourists would extend their stays to explore the Red Sea coast and other places of interest this would also constitute a significant growth potential,” he adds.

The current plan aims to increase the already existing domestic tourist numbers and according to the Saudi Department of Tourism and Heritage SDR7bn is generated by domestic tourism annually and 26 per cent of this are family visits while 23 per cent attend religious ceremonies.

Tourism revenue makes up 6.7 per cent of the GDP in addition to creating up to 600,000 jobs currently within the kingdom.

The department also states that there are 12,000 sites of interest in the kingdom, including natural, cultural and heritage.

Oil Earnings

EFG Hermes, a leading research company, reports that due to Saudi Arabia’s sharp increase in oil earnings the economy saw a 52.2 per cent increase in surplus in 2008 from 2006 figures, reaching $150.6bn, which equals 32.2 per cent of GDP. Also with the increase in petrochemical prices, non-oil exports are also likely to see a substantial increase in revenue.

The company also predicts that a trade balance increase to $218.6 billion, equal to 46.7 per cent of GDP.

EFG also forecasted a 26 per cent increase in imports to increase in 2008 boosted by the weakening of the dollar, which would have increase the international prices of commodities as well as import costs.

The country’s ervice account widened due to stronger economic activity, net transfers deficit which was caused by a higher number of workers remittances outside the kingdom and despite a rise in tourism income the increase in service deficit was caused by a rise in the demand for business services.