The tourism sector in the kingdom is considered promising, however it faces many challenges, including the restrictive measures for recreational activities, restrictions on visas for foreign tourists, and the limited bank financing, in addition to the absence of other funding alternatives through the capital markets. The sector requires the input of billions of riyals to contribute to economic development.
The Ministry of Finance backed a number of tourism activities, including the hospitality sector with 35% of the total funding, the equivalent of SR2.2bn, while the total loans granted by the Bank of Credit and Savings during the past year had exceeded SR895m.
The Human Resources Development Fund has supported more than 100 properties in the travel and tourism industry, which provided over 3,000 jobs, in addition to the financing of more than 75 training portfolios in tourism professions and training over 1,000 trainees in the various sectors. There is also an ambitious plan to provide more than 10,000 jobs in the hotel accommodation sector.
The kingdom’s tourism sector achieved a 6.5% growth rate in providing jobs over the past five years compared to a growth of 1.3% at the global level for the same period. The rate of projected employment opportunities also grew to 6% for the next ten years compared to 2.7% globally.
However, the sector is facing a number of constraints that need to be resolved, including social changes, increased governmental burdens, consumer pressure to improve quality, the restructuring of the Saudi labour market and the pressures of foreign labour and low wages in the tourism sector.
Despite the fact that the tourism sector has won only 2% of government funding, compared to the industrial sector, which received 88%, and agriculture, 10%, it led other sectors in generating employment opportunities.
The future of investment in the tourism sector is promising, with increased community awareness and the spread of tourism enterprises. Every million dollars invested in tourism presents 167 job opportunities- according to one expert – while every million invested in the petrochemical sector provides only four, which shows the role that tourism can play in the fight against unemployment.
The General Authority for Tourism and Antiquities has established 15 service centres to serve tourism investment across the kingdom, and to provide support to local investors, and develop incentives for investment, resulting in the funding of 24 SME tourism projects with approximately SR75m.The authority has issued a number of necessary approvals and operational licenses for 316 tourist accommodation facilities, including 56 hotels, 260 furnished residential units, 663 licenses for travel agencies across the kingdom, 75 tour operator licenses, and 124 licenses for tour guides.
Tuesday, April 6- 2010 @ 12:34 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.