Inside Saudi Arabia’s $800 Billion Travel Destination Transformation | Forbes - video Dailymotion

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Saudi Arabia is on a massive building spree—creating private islands, luxury hotels, theme parks, cruise ports, and even a desert ski resort. The question remains: If they build it, who will come?  It can be difficult to visualize the vastness of Saudi Arabia’s physical transformation. Some of the most notable ongoing projects—including Sindalah, a 7-star private island, and Trojena, an improbable desert ski resort—fall within NEOM, a $500-billion built-from-scratch region in northwest Saudi Arabia where the Kingdom is creating new cities, resorts and other developments. Bankrolled mainly by the Kingdom’s $700-billion Public Investment Fund (PIF), the idea for NEOM was born out of Vision 2030, Saudi Arabia’s grand plan to shake off its historic reliance on oil and diversify its economy, reinventing the country as a global tourism juggernaut.  Euromonitor predicts that international tourists will spend $38 billion in 2030. But the total economic impact for Saudi Arabia will be far greater after adding in domestic travelers’ expenditures and the ripple effect of one million new tourism jobs. The World Travel & Tourism Council projects that, by 2032, Saudi Arabia’s tourism sector could contribute nearly $169 billion to its GDP, representing 17.1% of the total Saudi economy.  00:00 Intro 00:24 New Cities, Resorts, and Hotels 02:05 Saudi Arabia’s Tourism Moonshot 03:09 Foreign Travelers in Saudi Arabia 04:39 Preparing For The Future  Read the full story on Forbes: https://www.forbes.com/sites/suzannerowankelleher/2024/01/29/inside-saudi-arabias-800-billion-tourism-moonshot-neom-sindalah-trojena-red-sea-global  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00 [Music]

00:04 Saudi Arabia is on a massive building spree, creating private islands, luxury hotels,

00:09 theme parks, cruise ports, and even a desert ski resort.

00:13 The question remains, if they build it, who will come?

00:16 [Music]

00:24 Whatever your preconceived notion of Saudi Arabia as a travel destination is,

00:28 it's about to get a major renovation.

00:31 Imagine Sindala, a seven-star private island resort with three ultra-lux hotels,

00:36 38 high-end restaurants, and multiple superyacht marinas.

00:40 Or Qadiyah, a futuristic city of 600,000 people rising from the desert floor,

00:45 dedicated to eSports and gaming.

00:48 How about Trojana, a space-age ski resort built above the high desert?

00:53 Or the Red Sea, a vast waterscape of 50 luxury resorts and 8,000 hotel rooms

00:59 spread across 22 islands in a Maldives-style archipelago

01:02 powered entirely by wind and solar energy.

01:05 Also in the works is The Rig, a $5 billion adventure theme park

01:10 built on an offshore oil platform.

01:12 In addition, Saudi Arabia is positioning itself as a major cruise destination,

01:17 with Cruise Saudi having recently bought a $300 million ship.

01:21 Across the kingdom, new roads, airports, golf courses,

01:25 and cruise terminals are rising from the sand.

01:27 The map is literally being redrawn in real time.

01:30 Then there are all the new hotels, with their thousands of freshly built rooms.

01:36 The world's most iconic hospitality companies, Ritz-Carlton, Four Seasons,

01:42 St. Regis, Fairmont, Marriott, Hilton, Hyatt, and Intercontinental,

01:48 are falling over themselves to jump into a construction pipeline

01:52 that's churning faster than anywhere else in the world.

01:54 Any one of these projects might momentarily pierce the travel industry's

01:59 fleeting attention span, but together, what's going on in Saudi Arabia

02:04 simply cannot be ignored.

02:05 It can be difficult to visualize the vastness of Saudi Arabia's physical transformation.

02:10 Some of the most notable ongoing projects fall within NEOM,

02:15 a $500 billion built-from-scratch region in northwest Saudi Arabia

02:19 where the kingdom is creating new cities, resorts, and other developments.

02:22 At 10,200 square miles and bounded by the Red Sea to the south

02:28 and the Gulf of Aqaba to the west, it's roughly the size of Albania.

02:32 Bankrolled by the kingdom's $700 billion public investment fund,

02:36 the idea for NEOM was born out of Vision 2030,

02:40 Saudi Arabia's grand plan to shake off its historic reliance on oil

02:44 and diversify its economy.

02:46 One of the scheme's pillars involves reinventing the country

02:50 as a global tourism juggernaut.

02:51 When first announced in 2016, the kingdom's tourism goals seemed fanciful.

02:57 Attract 100 million foreign and domestic visitors to the country every year

03:01 and grow tourism's share of the economy from about 3% to 10%

03:05 and do it all in just 14 years.

03:08 Then in 2019, Saudi Arabia announced it would provide e-visas and visas on arrival

03:14 to visitors from 49 countries, including the United States.

03:17 Among other changes announced at the time,

03:20 female visitors would be exempted from wearing an abaya,

03:23 the traditional and otherwise obligatory head-to-toe robe in public places,

03:28 and would be allowed to travel without a male companion.

03:30 Since Saudi Arabia opened to the international travel market,

03:34 the speed and spare-no-expense approach to its transformation

03:38 has stunned even the most seasoned tourism analysts.

03:42 The World Travel and Tourism Council estimates the kingdom has already spent $800 billion,

03:46 and that doesn't include the massive amounts of foreign investments pouring in.

03:51 Saudi Arabia had over 24 million foreign arrivals in 2023

03:56 and will welcome nearly 37 million in 2030, according to Euromonitor projections.

04:01 A more meaningful measure of success is how much foreigners are expected to spend

04:07 while in Saudi Arabia.

04:09 Euromonitor predicts that international tourists will spend $38 billion in 2030.

04:15 But the total economic impact for Saudi Arabia will be far greater after adding

04:19 in domestic travelers' expenditures and the ripple effect of 1 million new tourism jobs.

04:25 The WTTC projects that by 2032,

04:28 Saudi Arabia's tourism sector could contribute nearly $169 billion to its GDP,

04:34 representing 17.1% of the total Saudi economy.

04:39 Preparing for the future also means recognizing the seismic shift in what

04:42 the next generations of global travelers will want.

04:45 Roughly 90% of young Chinese travelers and 70% of Gen Z travelers in the UK, Australia, and India

04:52 say they are looking to discover new destinations, according to data from Scyth Research.

04:57 In that sense, being the new kid on the tourism block is an enormous plus.

05:02 There are, of course, many ways for the Saudi Grand Vision to go sideways.

05:06 First, there are enormous financial risks inherent in tackling so many gigaprojects all at once,

05:12 even for a country with bottomless pockets.

05:14 The kingdom's debt-to-GDP ratio is nearly double what it was a decade ago,

05:20 though still quite low compared to other countries.

05:22 Another concern is hotel overcapacity.

05:26 Euromonitor International's latest forecast model predicts that the average traveler's

05:30 spend will have already dropped by 2030.

05:33 Too many hotel rooms that aren't being filled would drive prices down.

05:36 In addition, Saudi Arabia has a persistent PR problem among many would-be travelers,

05:42 especially those from the West.

05:44 The kingdom still has strict laws about drinking and severe restrictions for women,

05:49 not to mention allegations of human rights abuses and attacks against journalists.

05:53 In 2021, the US officially blamed Saudi Crown Prince Mohammed bin Salman

05:59 for the 2018 murder of Washington Post journalist Jamal Khashoggi.

06:03 But any concerns about human rights haven't stopped multinational corporations

06:07 from investing in the kingdom's Grand Vision.

06:09 The majority of luxury hotel brands have already shifted from China and the UAE into Saudi Arabia.

06:15 After all, the international travel market loves nothing more than a shiny new destination

06:20 in an emerging market, and right now the Middle East is having a moment.

06:30 [BLANK_AUDIO]

Inside Saudi Arabia’s $800 Billion Travel Destination Transformation | Forbes

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