Boston, MA -- (ReleaseWire) -- 04/30/2014 -- Our tourism report for Saudi Arabia examines the significant long-term potential offered by the industry but highlights the potential downward pressure that regional uncertainty could have on arrival numbers as the political landscape changes.
Final full-year 2013 data for Saudi Arabia's tourism industry performance were unavailable as this report was being compiled. Consequently, we leave our key tourist arrivals forecasts unchanged this quarter, although we have now extended our forecast period out to 2018 for all key tourism industry indicators.
All indications are that 2013 will have proved another positive year for Saudi Arabian tourism, in line with BMI's views on the subject. Looking forward, BMI holds a positive stance towards Saudi Arabia's tourism sector. For 2014 we believe that that there will be 8.6% growth in arrivals from all regions, with tourism receipts set to rise by around 9% in US dollar terms. Over the longer terms, we forecast 37.4% growth in arrivals to 25.8mn in 2018, and 40.6% growth in tourism receipts to US$14.2bn.
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In one positive recent development for the sector, in December 2013 it was reported by Arabian Business that the Saudi Arabian government will spend SAR34bn (US$9bn) on developing a beach on the country's east coast near to the borders with Bahrain and Qatar into a new tourism destination, according to the Saudi Commission for Tourism and Antiquities. Al Uqair Development Company has reportedly received investments worth SAR17bn (US$4.5bn) for the development of the beach, which is expected to open in 2017. The project is expected to generate 37,700 direct jobs and 56,000 indirect and seasonal jobs. BMI will monitor the progress of this new tourism project over the coming years.
According to BMI's Infrastructure team, significant investment in tourism-related construction looks set to continue over the coming years as the country looks to capitalise on a notable rise in demand from Islamic pilgrims. Indeed, according to a December 2013 report in Arab News, Saudi Arabia's hospitality sector is growing at more than 8.5% annually, and around 155 new hotels are expected to be opened over 2014-2015.
Overall, BMI remains optimistic about the outlook for the Saudi Arabian tourism industry for 2014 and beyond. The country is planning significant increases in the national room supply, while airport capacity is also set to increase rapidly. BMI believes that an extra 170 hotels and accommodation establishments will be built between 2014 and 2018. This will equate to some 13,680 extra rooms for the overall national supply.
- 2014 will be a bumper year for hotel openings within Saudi Arabia. Among properties scheduled to open are three hotels from Starwood Hotels & Resorts: the 236-room Four Points by Sheraton Medina (May 2014), the 356-room Sheraton Medina (May 2014) and the 238-room Aloft Riyadh (November 2014).
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