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Saudi domestic tourism booming: What more should the Kingdom do?

March 23, 2017 5:00 pm

By 2027, travel and tourism sector is expected to contribute more than 11.1 per cent of Saudi Arabia’s total GDP.

Strangely, Saudi Arabia, unlike its regional peers and many other countries, has more domestic tourists than international travellers.

Tourism continues to play a major role in the economy of the second-largest country in the Arab world.

By 2027, travel and tourism sector is expected to contribute more than 11.1 per cent of total gross domestic product (GDP).

The total contribution of the sector was SAR244.6bn ($65.2bn), 10.2 per cent of GDP in 2016, and is forecast to rise by 6.4 per cent in 2017, and to rise by 4.7 per cent per annum to SAR412.0bn ($109.9bn) over the next ten years, according to the latest figures from World Travel and Tourism Council (WTTC).

 

Local tourists swell

More importantly, the kingdom is expected to see a surge in the number of domestic tourists over the next few years.

Various measures taken by the Saudi government, particularly after the launch of Vision 2030, have been driving a surge in domestic tourism across the country.

According to a research from by the Euromonitor International the country will see a 40 per cent rise in the number of internal trips made between 2015 and 2020.

Colliers International’s Saudi Arabia Hospitality Market report revealed domestic tourism in Saudi Arabia will grow by 7.5 per cent per annum until 2020, compared to 6.1 per cent for overseas visitors.

The number of local tourist trips inside Saudi Arabia, as per figures from WTTC, exceeded 47.5 million last year (2016) – a 2.3 per cent rise compared to 2015.

 

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Domestic tourism in focus

Under the ambitious vision, plans are afoot to increase household spending on cultural and entertainment activities inside the country, from 2.9 per cent to 6 per cent.

“The Saudi Commission for Tourism and National Heritage (SCTH) is investing generously in boosting domestic tourism, launching a number of new initiatives,” says Nikola Kosutic, Research Manager at Euromonitor International.

“Live Saudi Arabia, in collaboration with Saudi Airlines and Aramco, for example, encourages residents to visit historic locations, whilst Leave No Trace aims to raise awareness of the importance of preserving the natural beauty of the country.”

 Other schemes aimed at boosting domestic tourism include The Colours of Saudi Arabia Forum, which organises various events and competitions related to photography. A Tourism Call Centre is also now in place, providing intensive information about attractions and events across the Kingdom.

“This is not to mention the famous Janadriyaha and Jeddah Ghair festivals, which are held annually and are attracting a growing number of visitors every year,” adds Kosutic.

Earlier this month, Prince Sultan bin Salman, president of the Saudi Commission for Tourism and National Heritage, said Saudi Arabia will become ‘one of the biggest players’ in the industry. This followed news of additional government investment in tourism totalling $800 million.

 

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Room for growth

To cope with the projected demand, there are an additional 61,224 hotel rooms in the pipeline across Saudi Arabia, despite major cities experiencing an overall drop in occupancy levels and average daily rates in 2016, as a result of low oil prices, precautionary corporate and overall government cuts in spending.

Leading global data benchmarking company STR said hotel occupancy levels in Saudi Arabia in 2016 was 59.5 per cent, an overall drop of 4.8 per cent on the previous year. Average daily rates (ADR) were also down 3.9 per cent to SAR 764.08, while Revenue per available room (RevPAR) stood at SAR454.85, a fall of 8.5 per cent.

The kingdom is expected to make it presence felt at the Arabian Travel Market (ATM), which is being held in the Dubai World Trade Centre from April 23-27 2017.

It is also gearing up for The Hotel Show Saudi Arabia 2017 to be held in Jeddah on 4-5 April.

“We expect 2017 to be more positive, with a particularly strong focus on leisure, religious and domestic tourism as the country looks to increase the contribution from the non-oil sectors,” says Simon Press, Senior Exhibition Director, ATM 2017.

 

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AMEinfo Staff
By AMEinfo Staff
AMEinfo staff members report business news and views from across the Middle East and North Africa region, and analyse global events impacting the region today.