Saudi Arabia seeks $80 billion investments. Aim? More tourists - Hindustan Times

Saudi Arabia seeks $80 billion investments. Aim? More tourists

Bloomberg |
Mar 05, 2024 11:13 AM IST

“I want the private sector to represent the majority of investment,” Tourism Minister Ahmed Al Khateeb said.

Saudi Arabia is seeking to attract as much as $80 billion in private investment into the tourism industry as the kingdom looks to share the financial burden of plans to become one of the world’s most visited destinations.

Saudi Crown Prince Mohammed bin Salman.(AFP)
Saudi Crown Prince Mohammed bin Salman.(AFP)

“I want the private sector to represent the majority of investment,” Tourism Minister Ahmed Al Khateeb said in an interview in Riyadh on Sunday, adding that the goal is to raise $60 billion to $80 billion by 2030. “This is a very ambitious target.”

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The government plans to spend some $800 billion on tourism over the next decade as it prepares Saudi Arabia for a post-oil future that includes becoming a major hub for everything from metals mining to sporting events. The goal is to have 150 million tourists a year by 2030, with about 70 million coming from abroad.

While the state and its sovereign wealth fund have been the cash lifeline for tourism development thus far, getting foreign direct investment — particularly from the private sector — will be critical to the Vision 2030 time line as mega projects ramp up and spending needs balloon, said James Reeve, chief economist at Jadwa Investment Co.

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Saudi Arabia, which is forecasting deficits every year through 2026, has already said some 2030 projects will be delayed as it considers financing requirements and the risk of overheating the economy.

In 2023, Saudi recorded 100 million tourists, most of them locals. International visitors accounted for about 27 million, with a chunk of arrivals related to religious or business travel. Leisure trips are thought to have made up only a small percentage as Riyadh, in particular, is still a hot bed for construction.

Saudi is counting on the middle-class population in India and China to boost international tourism numbers and sees the UK as an appealing market, according to Khateeb, the minister. France and Germany are also interesting prospects, though destinations requiring longer-haul flights of more than eight hours remain challenging, he said.

Some $11 billion may come from private investment after the Ministry of Tourism this week launched a new program that aims to ease the investment process, including by reducing barriers to entry, according to a statement.

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