Earlier this year, the government of Saudi Arabia announced that it would be issuing tourist visas for the first time in the nation’s history. This development is a direct consequence of Saudi Vision 2030 which has identified tourism as one of the most promising aspects of the country’s ambitious diversification efforts.
Many commentators wondered how a flourishing tourism industry would be achieved in a nation that has previously been perceived to be closed to foreign visitors. Others have debated how it would affect the equivalent sectors in neighbouring countries. Some even dared to ask whether Saudi Arabia could eventually compete with the UAE and its renowned tourism offerings.
Such arguments fail to take into account the UAE’s decades’ long journey to achieve the impressive visitor figures that it boasts today. Moreover, they ignore the unique offerings of Saudi Arabia. The reality is that the two nations couldn’t be more different – both in terms of their objectives, visitor profiles and propositions. And these differences are indeed beneficial. Rather than being in competition with one another, Saudi Arabia and the UAE are complementary in their tourism offerings. Furthermore, the kingdom is fortunate that it can call upon the lessons learned by its neighbour – whose journey to date has been remarkable to say the least – to shape its approach going forward.
UAE: a succesful model
The rise of the UAE from a small trading port in the 1970s into the modern metropolis that it is today is synonymous with its emergence as a leading tourism destination. The UAE’s success is directly related to its long-term vision to transform into one of the world’s leading tourism hotspots. But the road to success is never easy: in fact, it has taken the UAE more than four decades to build the infrastructure that has supported its development into a regional hub for business, sports events, culture, entertainment and adventure tourism.
Saudi Arabia is home to some of the holiest sites on earth as well as a number of Unesco world heritage spots
The UAE’s success can be attributed to its ability to adapt in line with changing industry demands. The nation has developed a tourism vision that caters directly to the diverse needs of its visitors and ever evolving global trends – including the rise of experiential travel.
The UAE, and its ever increasing visitors’ figures, provides an important example of the advantages that come with an agile tourism strategy. Once deemed a destination of choice for the wealthy, it has repositioned itself with a focus on inclusivity by diversifying its offerings through the development of a strong mid-market hospitality industry.
The meetings, incentives, conferences and exhibitions sector (MICE) has also been an extremely important sector for the UAE. The Emirates is home to the regional headquarters of many leading global organisations. And through recent legislation, including longer residency for expats, changes to foreign ownership laws and even new arbitration laws, the UAE is becoming an even more attractive place in which to conduct business.
Figures by the Dubai World Trade Centre (DWTC) reveal that the institution contributed AED12.7bn to Dubai’s economy, equivalent to 3.3 percent of the emirate’s GDP in 2017, reaffirming the importance of MICE sector to Dubai and the UAE.
Changing times in Saudi
Like the UAE, Saudi Arabia too has recently announced a number of changes to its laws that will promote foreign investment into the country. MICE tourism is already popular in the kingdom as global organisations recognise the importance of engaging with the GCC’s largest economy. However, the visa process in addition to issues surrounding foreign ownership led to a number of challenges that prevented international companies from setting up a permanent presence in the kingdom.
The recent changes in law will indeed be a game changer for the country’s MICE sector, whilst further strengthening the combined offering of the GCC.
Cultural tourism is an area that is likely to grow in the UAE due to the recent, greatly anticipated, launch of the Louvre Abu Dhabi, and the planned openings of Zayed National Museum and the Guggenheim Abu Dhabi in Saadiyat Cultural District – which will represent the world’s largest single concentration of premier cultural assets. Cultural tourism has not featured as highly on the UAE’s tourism agenda. But this sector could provide an important area of collaboration for the UAE and Saudi Arabia. The kingdom is home to some of the holiest sites on earth as well as a number of Unesco world heritage spots including Al Hijr Archaeological Site and At-Turaif District In Ad-Dir’iyah. Each year millions of visitors descend on the holy city of Makkah for Haj. This highlights that the kingdom already has the infrastructure required to host millions of people, which will prove extremely advantageous in the country’s pursuit of its tourism goals. The UAE and Saudi Arabia’s combined offerings certainly bolster the value proposition of the region as an important cultural hub.
Developments such as the mega tourism hub Souq Okaz City, which is currently under construction in Taif will further bolster the country’s cultural tourism ambitions. The project will include interactive museums, an exhibition and convention centre, an Arab poetry academy that will host festivals and theatre productions, and a handicrafts centre.
It will be important for both nations to collaborate to provide tourists to the region with the opportunity to experience the unique history and culture of the region through the cities of Abu Dhabi, Riyadh and Jeddah.
It is not just cultural tourism that is a driver. Some of the other changes and projects announced will ensure that in-country tourism continues to grow – offering additional leisure backed opportunities for the already significant population. Developments like Al Qiddiya (the entertainment district) as well as the opening of cinemas and other leisure opportunities adds another dynamic to the progress of more localised tourism within the kingdom itself.
As part of the kingdom’s fledgling tourism strategy, Saudi Arabia’s sovereign fund has unveiled a major new international tourism project encompassing a 30,000 sq km stretch of islands, beaches and other attractions on the Red Sea. The project includes the development of more than 50 natural islands in partnership with a number of major hotel operators for a Maldives-inspired experience.
This project will provide another dimension to the region’s offerings, in particular for tourists in the GCC and beyond that hope to experience history, culture and relaxation.
Complementing visions
The UAE has been highly successful in inspiring travellers to visit its shores by working closely with all of its stakeholders to build a diverse hospitality sector that complements its infrastructure to offer a unique travel destination. The UAE government has also made great strides in implementing easier visa processes and bringing world class attractions to the country to further boost footfall and spend per person.
The UAE has a lot to teach its neighbours about how to build a tourism sector that appeals to the masses. Saudi Arabia will not and does not want to compete with the UAE in this respect.
This is where the prospects for growth in the UAE’s and Saudi Arabia’s tourism industries rests – in the ability to recognise each nation’s individual strengths and work together to further attract tourists to the region.
Nick Maclean, Managing Director, CBRE Middle East
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